International Tax Simplification for American Competitiveness Act of 1998

TABLE OF CONTENTS:

Title I: Treatment of Controlled Foreign Corporations

Title II: Provisions Relating to Foreign Tax Credit

Title III: Other Provisions

International Tax Simplification for American Competitiveness Act of 1998 - Title I: Treatment of Controlled Foreign Corporations - Amends the Internal Revenue Code (IRC) to direct the Secretary of the Treasury to prescribe regulations which will eliminate multiple inclusion of any item in income if there is a redemption through the use of related corporations and either the acquiring or issuing corporation is a foreign corporation.

(Sec. 102) Excludes from the definition of "foreign personal holding company income" income which is derived in the active conduct by a controlled foreign corporation of a banking, financing, or similar business, subject to stated conditions.

(Sec. 103) Requires a study and a report on the feasibility of treating all countries in the European Union as one country under subpart F (Controlled Foreign Corporations) of part III (Income From Sources Without the United States) of subchapter N (Tax Based on Income From Sources Within or Without the United States) of chapter 1 (Normal Taxes and Surtaxes) of the IRC.

Provides, with respect to subpart F, for: (1) expansion of the de minimis rule; (2) the determination of earnings and profits under generally accepted accounting rules; (3) the treatment of pipeline transportation income and income from the transmission of high voltage electricity; and (4) look-through treatment for certain sales of partnership interests.

Title II: Provisions Relating to Foreign Tax Credit - Extends the period to which excess foreign taxes may be carried.

(Sec. 202) Defines overall domestic loss and sets forth provisions for determining taxable income for any taxpayer sustaining such a loss.

(Sec. 203) Sets forth special rules relating to financial services income.

(Sec. 204) Sets forth provisions, concerning the foreign tax credit and: (1) the treatment of dividends from certain corporations; (2) the look-through rules; (3) ordering rules for foreign tax credit carryovers; and (4) the repeal of the limitation of such credit under the alternative minimum tax.

Title III: Other Provisions - Applies constructive ownership rules for purposes of determining certain post-1986 undistributed U.S. earnings.

(Sec. 302) Applies capitalization rules to nonresident aliens and foreign corporations.

(Sec. 303) Repeals the special rule for military property with respect to exempt foreign trade income.

(Sec. 304) Revises the definition of U.S. property to exclude certain assets acquired by dealers in the ordinary course of business.

(Sec. 305) Exempts from the taxes on nonresident aliens and foreign corporations certain regulated investment company dividends.

(Sec. 306) Directs the Secretary of the Treasury, with respect to the Puerto Rico and possession tax credit, to exclude from the definition of the term "intangible property" any preliminary agreement which is not legally enforceable.

(Sec. 307) Sets forth provisions concerning airline mileage awards to certain foreign persons.

(Sec. 308) Repeals subpart G (Export Trade Corporations) of part III of subchapter N of chapter 1 of the Internal Revenue Code.