A bill to amend the Internal Revenue Code of 1954 to prevent certain abuses involving tax straddles and to prevent the avoidance of the accumulated earnings tax through the use of foreign corporations.

Amends the Internal Revenue Code to treat as a foreign investment company a foreign corporation which engages primarily in trading in securities, commodities, or interests in commodities, and which is directly or indirectly at least 50 percent owned by United States persons.

Provides that, if more than ten percent of a foreign-based corporation's earnings and profits are derived from U.S. sources or effectively are connected to a U.S. trade or business, any dividends distributed directly from such a corporation to a U.S. owned foreign corporation shall be treated as derived from sources within the United States.

Includes offsetting position stock as property subject to tax straddle rules. Defines "offsetting position stock" as stock of a corporation formed or availed of to take positions in personal property which offset positions taken by the shareholders.