§ 6039C. Returns with respect to foreign persons holding direct investments in United States real property interests

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. 1980

   Foreign Investment in Real Property Tax Act of 1980

   Pub. L. 96–499 title XI § 1123(a) · 94 Stat. 2599

   Enacted · 26 U.S.C. § 6039C

   Added Pub. L. 96–499, title XI, § 1123(a), Dec. 5, 1980, 94 Stat. 2687

   Source evidence

   Code source credit
   Added Pub. L. 96–499, title XI, § 1123(a), Dec. 5, 1980, 94 Stat. 2687

   Enacted provision · exact public law section
   (a) General Rule.— Subpart A of part III of chapter 61 of the Internal Revenue Code of 1954 (relating to information returns concerning persons subject to special provisions) is amended by inserting after section 6039B the following new section: “SEC. 6039C. RETURNS WITH RESPECT TO UNITED STATES REAL PROPERTY INTERESTS. “(a) Return of Certain Domestic Corporations Having Foreign Shareholders.— “(1) General rule.— “(A) Return requirement.— If this subsection applies to a domestic corporation for the calendar year, such corporation shall make a return for the calendar year setting forth— “(i) the name and address (if known by the corporation) of each person who was a shareholder at any time during the calendar year and who is known by the corporation to be a foreign person, “(ii) such information with respect to transfers of stock in such corporation to or from foreign persons during the calendar year as the Secretary may by regulations prescribe, and “(iii) such other information as the Secretary may by regulations prescribe. “(B) Corporations to which subsection applies.— This subsection applies to any domestic corporation for the calendar year if— “(i) at any time during the calendar year 1 or more of the shareholders of such corporation is a foreign person, and “(ii) at any time during the calendar year or during any of the 4 immediately preceding calendar years, such corporation was a United States real property holding corporation (as defined in section 897(c)(2)). Ante, p. 2682. “(2) Subsection does not apply to publicly traded corporations.— This subsection shall not apply to a corporation the stock of which is regularly traded on an established securities market at all times during the calendar year. “Stock held by nominees.—If— “(A) a nominee holds stock in a domestic corporation for a foreign person, and “(B) such foreign person does not furnish the information required to be furnished pursuant to paragraph (1)(A) with respect to such stock, the nominee shall file a return under this subsection with respect to such stock. “(b) Return of Certain Persons Holding United States Real Property Interests.— “(1) Return requirement.— If any entity to which this subsection applies has at any time during the calendar year a substantial investor in United States real property, such entity shall make a return for the calendar year setting forth— “(A) the name and address of each such substantial investor, “(B) such information with respect to the assets of the entity during the calendar year as the Secretary may by regulations prescribe, and “(C) such other information as the Secretary may by regulations prescribe. “(2) Exception where security furnished.— This subsection shall not apply to any entity for the calendar year if such entity furnishes to the Secretary such security as the Secretary determines to be necessary to ensure that any tax imposed by chapter 1 with respect to United States real property interests held by such entity will be paid. “(3) Statements to be furnished to substantial investor in united states real property.— Every entity making a return under paragraph (1) shall furnish to each substantial investor in United States real property a statement showing— “(A) the name and address of the entity making such return, “(B) such substantial investor’s pro rata share of the United States real property interests held by such entity, and “(C) such other information as the Secretary shall by regulations prescribe. “(4) Definitions.— For purpose of this subsection— “(A) Entities to which this subsection applies.— This subsection shall apply to any foreign corporation and to any partnership, trust, or estate (whether foreign or domestic). “(B) Substantial investor in united states real property.— “(i) In general.— The term ‘substantial investor in United States real property’ means any foreign person who at any time during the calendar year held an interest in the entity but only if the fair market value of such person’s pro rata share of the United States real property interests held by such entity exceeded $50,000. “(ii) Special rule for corporations.— In the case of any foreign corporation, clause (i) shall be applied by substituting ‘person (whether foreign or domestic)’ for ‘foreign person’. “(C) Indirect holdings.— The assets of any entity to which this subsection applies shall include its pro rata snare of the United States real property interests held by any corporation in which the entity is a substantial investor in United States real property. “(c) Return of Certain Foreign Persons Holding Direct Investments in United States Real Property Interests.— “(1) Return requirement.— If this subsection applies to any foreign person for the calendar year, such person shall make a return for the calendar year setting forth— “(A) the name and address of such person, “(B) a description of all United States real property interests held by such person at any time during the calendar year, and “(C) such other information as the Secretary may by regulations prescribe. “(2) Persons to whom this subsection applies.— This subsection applies to any foreign person for the calendar year if— “(A) such person did not engage in a trade or business in the United States at any time during the calendar year, “(B) the fair market value of the United States real property interests held by such person at any time during such year equals or exceeds $50,000, and “(C) such person is not required to file a return under subsection (b) of such year. “(d) Definitions.— For purposes of this section— “(1) United states real property interest.— The term ‘United States real property interest’ has the meaning given to such term by section 897(c). Ante, p. 2682. “(2) Foreign person.— The term ‘foreign person’ means any person who is not a United States person.” “(e) Special Rules.— “(1) Attribution of ownership.— For purposes of subsections (b)(4)and (c)(2)(B)— “(A) Interests held by partnerships, etc.— United States real property interests held by a partnership, trust, or estate shall be treated as owned proportionately by its partners or beneficiaries. “(B) Interests held by family members.— United States real property interests held by the spouse or any minor child of an individual shall be treated as owned by such individual. “(2) Returns, etc.— All returns, statements, and information required to be made or furnished under this section shall be made or furnished at such time and in such manner as the Secretary shall by regulations prescribe.”

2. 1981

   Economic Recovery Tax Act of 1981

   Pub. L. 97–34 § 831(e) · 95 Stat. 175

   Substituted · 26 U.S.C. § 6039C(b)(4)(C)

   Pub. L. 97–34, § 831(e), substituted “For purposes of determining whether an entity to which this subsection applies has a substantial investor in United States real property, the assets of any person shall include the person’s pro rata share of the United States real property interest held by any corporation (whether domestic or foreign) if the person’s pro rata share of the United States real property interests exceeded $50,000” for “The assets of any entity to which this subsection applies shall include its pro rata share of the United States real property interests held by any corporation in which the entity is a substantial investor in United States real property”

   Source evidence

   Code amendment note
   Subsec. (b)(4)(C). Pub. L. 97–34, § 831(e), substituted “For purposes of determining whether an entity to which this subsection applies has a substantial investor in United States real property, the assets of any person shall include the person’s pro rata share of the United States real property interest held by any corporation (whether domestic or foreign) if the person’s pro rata share of the United States real property interests exceeded $50,000” for “The assets of any entity to which this subsection applies shall include its pro rata share of the United States real property interests held by any corporation in which the entity is a substantial investor in United States real property”.

   Enacted provision · exact public law section
   (e) Reporting Required for Certain Indirect Holdings.— Paragraph 26 USC 6039C. (4)(C) of section 6039C(b) is amended to read as follows: “(C) Indirect holdings.— For purposes of determining whether an entity to which this subsection applies has a substantial investor in United States real property, the assets of any person shall include the person’s pro rata share of the United States real property interest held by any corporation (whether domestic or foreign) if the person’s pro rata share of the United States real property interests exceeded $50,000.”

3. 1981

   Economic Recovery Tax Act of 1981

   Pub. L. 97–34 § 831(a)(3) · 95 Stat. 175

   Added · 26 U.S.C. § 6039C(f)

   Pub. L. 97–34, § 831(a)(3), added subsec. (f)

   Source evidence

   Code amendment note
   Subsec. (f). Pub. L. 97–34, § 831(a)(3), added subsec. (f).

   Enacted provision · exact public law section
   (3) Section 6039C (relating to returns with respect to United States real property interests) is amended by adding at the end thereof the following new subsection: “(f) Special Rule for United States Interest and Virgin Islands Interest.— A nonresident alien individual or foreign corporation subject to tax under section 897(a) shall pay any tax and file any return required by this title— “(1) to the United States, in the case of any interest in real property located in the United States and an interest (other than an interest solely as a creditor) in a domestic corporation (with respect to the United States) described in section 897(c)(1)(A)(ii), and “(2) to the Virgin Islands, in the case of an interest in real property located in the Virgin Islands and an interest (other than an interest solely as a creditor) in a domestic corporation (with respect to the Virgin Islands) described in section 897(c)(1)(A)(ii).”

4. 1984

   Tax Reform Act of 1984

   Pub. L. 98–369 div. A title I § 129(b)(1) · 98 Stat. 494

   1. Amended · 26 U.S.C. § 6039C

      Pub. L. 98–369 amended section generally

   2. Inserted · 26 U.S.C. § 6039C

      Pub. L. 98–369 inserting in section catchline “foreign persons holding direct investments in”

   3. Substituted · 26 U.S.C. § 6039C

      Pub. L. 98–369 substituting in text provisions concerning returns with respect to foreign persons holding direct investments in United States real property for provisions concerning returns with respect to United States real property interests

   Source evidence

   Code amendment note
   Pub. L. 98–369 amended section generally, inserting in section catchline “foreign persons holding direct investments in” and substituting in text provisions concerning returns with respect to foreign persons holding direct investments in United States real property for provisions concerning returns with respect to United States real property interests.

   Enacted provision · exact public law section
   (1) In general.— Section 6039C (relating to returns with respect 26 USC 6039C. to United States real property interests) is amended to read as follows: “SEC. 6039C. RETURNS WITH RESPECT TO FOREIGN PERSONS HOLDING DIRECT INVESTMENTS IN UNITED STATES REAL PROPERTY INTERESTS. “(a) General Rule.— To the extent provided in regulations, any foreign person holding direct investments in United States real property interests for the calendar year shall make a return setting forth— “(1) the name and address of such person, “(2) a description of all United States real property interests held by such person at any time during the calendar year, and “(3) such other information as the Secretary may by regulations prescribe. “(b) Definition of Foreign Persons Holding Direct Investments in United States Real Property Interests.— For purposes of this section, a foreign person shall be treated as holding direct investments in United States real property interests during any calendar year if— “(1) such person did not engage in a trade or business in the United States at any time during such calendar year, and “(2) the fair market value of the United States real property interests held directly by such person at any time during such year equals or exceeds $50,000. “(c) Definitions and Special Rules.— For purposes of this section— “(1) United states real property interest.— The term ‘United States real property interest’ has the meaning given to such term by section 897(c). “(2) Foreign person.— The term ‘foreign person’ means any person who is not a United States person. “(3) Attribution of ownership.— For purposes of subsection (b)(2)— “(A) Interests held by partnerships, etc.— United States real property interests held by a partnership, trust, or estate shall be treated as owned proportionately by its partners or beneficiaries. “(B) Interests held by family members.— United States real property interests held by the spouse or any minor child of an individual shall be treated as owned by such individual. “(4) Time and manner of filing return.— All returns required to be made under this section shall be made at such time and in such manner as the Secretary shall by regulations prescribe. “(d) Special Rule for United States Interest and Virgin Islands Interest.— A nonresident alien individual or foreign corporation subject to tax under section 897(a) shall pay any tax and file any return required by this title— “(1) to the United States, in the case of any interest in real property located in the United States and an interest (other than an interest solely as a creditor) in a domestic corporation (with respect to the United States) described in section 897(c)(1)(A)(ii), and “(2) to the Virgin Islands, in the case of any interest in real property located in the Virgin Islands and an interest (other than an interest solely as a creditor) in a domestic corporation (with respect to the Virgin Islands) described in section 897(c)(1)(A)(ii).”

   Effective date note
   Amendment by Pub. L. 99–514 effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984, Pub. L. 98–369, div. A, to which such amendment relates, see section 1881 of Pub. L. 99–514, set out as a note under section 48 of this title.

5. 1986

   Tax Reform Act of 1986

   Pub. L. 99–514 title XVIII § 1810(f)(7) · 100 Stat. 2085

   Inserted · 26 U.S.C. § 6039C(d)

   Pub. L. 99–514 inserted “(and any person required to withhold tax under section 1445)” after “section 897(a)”

   Source evidence

   Code amendment note
   Subsec. (d). Pub. L. 99–514 inserted “(and any person required to withhold tax under section 1445)” after “section 897(a)”.

   Enacted provision · exact public law section
   (7) Payment of tax.— Subsection (d) of section 6039C (relating to special rule for United States interests and Virgin Islands interests) is amended by striking out “subject to tax under section 897(a)” and inserting in lieu thereof “subject to tax under section 897(a) (and any person required to withhold tax under section 1445)”.

   Effective date note
   Amendment by Pub. L. 99–514 effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984, Pub. L. 98–369, div. A, to which such amendment relates, see section 1881 of Pub. L. 99–514, set out as a note under section 48 of this title.

7 of 7 references resolved to an enrolled provision