§ 6038B. Notice of certain transfers to foreign persons

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1. 1984

   Tax Reform Act of 1984

   Pub. L. 98–369 div. A title I § 131(d)(1) · 98 Stat. 494

   Enacted · 26 U.S.C. § 6038B

   Added Pub. L. 98–369, div. A, title I, § 131(d)(1), July 18, 1984, 98 Stat. 664

   Source evidence

   Code source credit
   Added Pub. L. 98–369, div. A, title I, § 131(d)(1), July 18, 1984, 98 Stat. 664

   Enacted provision · exact public law section
   (1) Notification requirement.— Subpart A of part III of subchapter A of chapter 61 is amended by adding after section 6038A the following new section: “SEC. 6038B. NOTICE OF CERTAIN TRANSFERS TO FOREIGN PERSONS. “(a) In general.— Each United States person who— “(1) transfers property to a foreign corporation in an exchange described in section 332, 351, 354, 355, 356, or 361, or “(2) makes a distribution described in section 336 to a person who is not a United States person, shall furnish to the Secretary, at such time and in such manner as the Secretary shall by regulations prescribe, such information with respect to such exchange or distribution as the Secretary may require in such regulations. “(b) Penalty for Failure to Furnish Information.— “(1) In general.— If any United States person fails to furnish the information described in subsection (a) at the time and in the manner required by regulations, such person shall pay a penalty equal to 25 percent of the amount of the gain realized on the exchange. “(2) Reasonable cause exception.— Paragraph (1) shall not apply to any failure if the United States person shows such failure is due to reasonable cause and not to willful neglect.”

2. 1997

   Pub. L. 105–34 § 1144(a) · 111 Stat. 788

   Amended · 26 U.S.C. § 6038B(a)(1)

   Pub. L. 105–34, § 1144(a), amended par. (1) generally. Prior to amendment, par. (1) read as follows: “transfers property to a foreign corporation in an exchange described in section 332, 351, 354, 355, 356, or 361, or”

   Source evidence

   Code amendment note
   Subsec. (a)(1). Pub. L. 105–34, § 1144(a), amended par. (1) generally. Prior to amendment, par. (1) read as follows: “transfers property to a foreign corporation in an exchange described in section 332, 351, 354, 355, 356, or 361, or”.

   Enacted provision · exact public law section
   (a) In General.— Paragraph (1) of section 6038B(a) (relating to notice of certain transfers to foreign corporations) is amended to read as follows: “(1) transfers property to— “(A) a foreign corporation in an exchange described in section 332, 351, 354, 355, 356, or 361, or “(B) a foreign partnership in a contribution described in section 721 or in any other contribution described in regulations prescribed by the Secretary,”.

   Effective date note
   Amendment by Pub. L. 109–135 effective as if included in the provisions of the Taxpayer Relief Act of 1997, Pub. L. 105–34, to which such amendment relates, see section 409(d) of Pub. L. 109–135, set out as a note under section 961 of this title.

3. 1997

   Pub. L. 105–34 § 1144(b) · 111 Stat. 788

   Redesignated · 26 U.S.C. § 6038B(b)

   Pub. L. 105–34, § 1144(b), added subsec. (b). Former subsec. (b) redesignated (c)

   Source evidence

   Code amendment note
   Subsec. (b). Pub. L. 105–34, § 1144(b), added subsec. (b). Former subsec. (b) redesignated (c).

   Enacted provision · exact public law section
   (b) Exceptions.— Section 6038B is amended by redesignating subsection (b) as subsection (c) and by inserting after subsection (a) the following new subsection: “(b) Exceptions for Certain Transfers to Foreign Partnerships; Special Rule.— “(1) Exceptions.— Subsection (a)(1)(B) shall apply to a transfer by a United States person to a foreign partnership only if— “(A) the United States person holds (immediately after the transfer) directly or indirectly at least a 10-percent interest (as defined in section 6046A(d)) in the partnership, or “(B) the value of the property transferred (when added to the value of the property transferred by such person or any related person to such partnership or a related partnership during the 12-month period ending on the date of the transfer) exceeds $100,000. For purposes of the preceding sentence, the value of any transferred property is its fair market value at the time of its transfer. “(2) Special rule.— If by reason of an adjustment under section 482 or otherwise, a contribution described in subsection (a)(1) is deemed to have been made, such contribution shall be treated for purposes of this section as having been made not earlier than the date specified by the Secretary.”.

   Effective date note
   Amendment by Pub. L. 109–135 effective as if included in the provisions of the Taxpayer Relief Act of 1997, Pub. L. 105–34, to which such amendment relates, see section 409(d) of Pub. L. 109–135, set out as a note under section 961 of this title.

4. 1997

   Pub. L. 105–34 § 1144(c) · 111 Stat. 788

   1. Amended · 26 U.S.C. § 6038B(c)

      Pub. L. 105–34, § 1144(c), as amended by Pub. L. 105–206, § 6011(g)

   2. Substituted · 26 U.S.C. § 6038B(c)

      Pub. L. 105–34, § 1144(c), as substituted “equal to 10 percent of the fair market value of the property at the time of the exchange (and, in the case of a contribution described in subsection (a)(1)(B), such person shall recognize gain as if the contributed property had been sold for such value at the time of such contribution)” for “equal to 25 percent of the amount of the gain realized on the exchange” in par. (1)

   3. Added · 26 U.S.C. § 6038B(c)

      Pub. L. 105–34, § 1144(c), as added par. (3)

   Source evidence

   Code amendment note
   Subsec. (c). Pub. L. 105–34, § 1144(c), as amended by Pub. L. 105–206, § 6011(g), substituted “equal to 10 percent of the fair market value of the property at the time of the exchange (and, in the case of a contribution described in subsection (a)(1)(B), such person shall recognize gain as if the contributed property had been sold for such value at the time of such contribution)” for “equal to 25 percent of the amount of the gain realized on the exchange” in par. (1) and added par. (3).

   Enacted provision · exact public law section
   (c) Modification of Penalty Applicable to Foreign Corporations and Partnerships.— (1) In general.— Paragraph (1) of section 6038B(b) is amended by striking “equal to” and all that follows and inserting “equal to 10 percent of the fair market value of the property at the time of the exchange (and, in the case of a contribution described in subsection (a)(1)(B), such person shall recognize gain as if the contributed property had been sold for such value at the time of such contribution).”. (2) Limit on penalty.— Section 6038B(b) is amended by adding at the end the following new paragraph: “(3) Limit on penalty.— The penalty under paragraph (1) with respect to any exchange shall not exceed $100,000 unless the failure with respect to such exchange was due to intentional disregard.”.

   Effective date note
   Amendment by Pub. L. 109–135 effective as if included in the provisions of the Taxpayer Relief Act of 1997, Pub. L. 105–34, to which such amendment relates, see section 409(d) of Pub. L. 109–135, set out as a note under section 961 of this title.

5. 1997

   Pub. L. 105–34 § 1144(b) · 111 Stat. 788

   Redesignated · 26 U.S.C. § 6038B(c)

   Pub. L. 105–34, § 1144(b), redesignated subsec. (b) as (c)

   Target inherited from the preceding amendment note.

   Source evidence

   Code amendment note
   Pub. L. 105–34, § 1144(b), redesignated subsec. (b) as (c).

   Enacted provision · exact public law section
   (b) Exceptions.— Section 6038B is amended by redesignating subsection (b) as subsection (c) and by inserting after subsection (a) the following new subsection: “(b) Exceptions for Certain Transfers to Foreign Partnerships; Special Rule.— “(1) Exceptions.— Subsection (a)(1)(B) shall apply to a transfer by a United States person to a foreign partnership only if— “(A) the United States person holds (immediately after the transfer) directly or indirectly at least a 10-percent interest (as defined in section 6046A(d)) in the partnership, or “(B) the value of the property transferred (when added to the value of the property transferred by such person or any related person to such partnership or a related partnership during the 12-month period ending on the date of the transfer) exceeds $100,000. For purposes of the preceding sentence, the value of any transferred property is its fair market value at the time of its transfer. “(2) Special rule.— If by reason of an adjustment under section 482 or otherwise, a contribution described in subsection (a)(1) is deemed to have been made, such contribution shall be treated for purposes of this section as having been made not earlier than the date specified by the Secretary.”.

   Effective date note
   Amendment by Pub. L. 109–135 effective as if included in the provisions of the Taxpayer Relief Act of 1997, Pub. L. 105–34, to which such amendment relates, see section 409(d) of Pub. L. 109–135, set out as a note under section 961 of this title.

6. 1998

   Internal Revenue Service Restructuring and Reform Act of 1998

   Pub. L. 105–206 § 6011(g) · 112 Stat. 685

   Changed · 26 U.S.C. § 6038B(c)

   Pub. L. 105–206, § 6011(g), made technical amendment to directory language of Pub. L. 105–206, § 1144(c). See 1997 Amendment note below

   Source evidence

   Code amendment note
   Subsec. (c). Pub. L. 105–206, § 6011(g), made technical amendment to directory language of Pub. L. 105–206, § 1144(c). See 1997 Amendment note below.

   Enacted provision · exact public law section
   (g) Amendment Related to Section 1144 of 1997 Act.— 26 USC 6038B. Paragraphs (1) and (2) of section 1144(c) of the 1997 Act are each amended by striking “6038B(b)” and inserting “6038B(c) (as redesignated by subsection (b))”.

7. 2005

   Tax Technical Corrections Act of 2005

   Pub. L. 109–135 title IV § 409(c) · 119 Stat. 2577

   Inserted · 26 U.S.C. § 6038B(a)(1)(B)

   Pub. L. 109–135 inserted “or” at end

   Source evidence

   Code amendment note
   Subsec. (a)(1)(B). Pub. L. 109–135 inserted “or” at end.

   Enacted provision · exact public law section
   (c) Amendment Related to Section 1144 of the Act.— Subparagraph (B) of section 6038B(a)(1) is 26 USC 6038B. amended by inserting “or” at the end.

   Effective date note
   Amendment by Pub. L. 109–135 effective as if included in the provisions of the Taxpayer Relief Act of 1997, Pub. L. 105–34, to which such amendment relates, see section 409(d) of Pub. L. 109–135, set out as a note under section 961 of this title.

9 of 9 references resolved to an enrolled provision