Tax Reform Act

Tax Reform Act - Provides that if a foreign corporation is a controlled foreign corporation for an uninterrupted period of 30 days or more during any taxable year, every United States shareholder of such corporation who owns stock totaling 1 percent or more of the combined voting stock in such corporation on the last day in such year on which such corporation is a controlled foreign corporation shall include in its gross income, for its taxable year in which or with which such taxable year of the corporation ends, its pro rata share of the corporation's earnings and profits for such year.

Prescribes rules for determining stock ownership under this Act.

Provides for an exclusion from gross income of previously taxed earnings and profits.

States that the basis of a United States shareholder's stock in a controlled foreign corporation, and the basis of property of a United States shareholder by reason of which it is considered under this Act as owning stock of a controlled foreign corporation, shall be increased by the amount required to be included in its gross income under this Act with respect to such stock or with respect to such property, as the case may be, but only to the extent to which such amount was included in the gross income of such United States shareholder.

Provides that the adjusted basis of stock or other property with respect to which a United States shareholder or a United States person receives an amount which is excluded from gross income under this Act shall be reduced by the amount so excluded.

Repeals the tax credit for investment in depreciable property effective January 1, 1976.

Terminates the special treatment for qualified and restricted stock options effective January 1, 1976.

Repeals the exemption for earned income from foreign sources.

Provides that no foreign tax credit shall be allowed for taxes attributable to foreign oil and gas income.

Repeals the tax exemption for Domestic International Sales Corporations.