Bill Summary
This legislation, titled "A BILL", proposes an amendment to the Internal Revenue Code of 1986. The amendment aims to provide an exemption from the Foreign Investment in Real Property Tax Act (FIRPTA) for interests held by certain foreign insurance companies. It is being enacted by the Senate and House of Representatives of the United States in Congress assembled. The amendment will change the existing section 897(l)(1) of the Internal Revenue Code of 1986, stating that a qualified foreign pension fund will not be subject to FIRPTA. This amendment will replace "qualified foreign pension fund" with "qualified foreign entity", and clarify that this exemption will also apply to interests held by one or more qualified foreign entities. The term "qualified foreign entity" is defined as a qualifying insurance corporation or a qualified foreign pension fund. The heading of section 897(l) will also be changed to "Certain Foreign Entities". The effective date of this amendment will be after the date of the enactment of this Act.
Possible Impacts
1. This legislation would affect foreign insurance companies by providing them with a tax exemption, potentially making it more attractive for them to invest in the United States. This could lead to increased foreign investment and potentially create job opportunities for American citizens.
2. The amendment could also benefit certain pension funds and insurance corporations by allowing them to hold interests in the United States without being subject to the Foreign Investment in Real Property Tax Act (FIRPTA). This could potentially result in increased profits for these entities and an increase in their overall financial stability.
3. On the other hand, this legislation could also have a negative impact on local real estate markets, as exempt foreign entities may have an advantage over domestic buyers. This could potentially lead to higher housing prices and make it more difficult for Americans to purchase homes.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4598 Introduced in House (IH)]
<DOC>
116th CONGRESS
1st Session
H. R. 4598
To amend the Internal Revenue Code of 1986 to provide an exemption from
FIRPTA for interests held by certain foreign insurance companies.
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IN THE HOUSE OF REPRESENTATIVES
October 1, 2019
Mr. Suozzi (for himself and Mr. Holding) introduced the following bill;
which was referred to the Committee on Ways and Means
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A BILL
To amend the Internal Revenue Code of 1986 to provide an exemption from
FIRPTA for interests held by certain foreign insurance companies.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. FIRPTA EXEMPTION FOR INTERESTS HELD BY CERTAIN FOREIGN
INSURANCE COMPANIES.
(a) In General.--Section 897(l)(1) of the Internal Revenue Code of
1986 is amended--
(1) by striking ``a qualified foreign pension fund shall
not'' and inserting ``a qualified foreign entity shall not'';
and
(2) by striking ``held by a qualified foreign pension fund
shall be treated as such a fund'' and inserting ``held
(directly or indirectly) by one or more qualified foreign
entities shall be treated as such an entity''.
(b) Qualified Foreign Entity.--Section 897(l) of such Code is
amended by redesignating paragraphs (2) and (3) as paragraphs (3) and
(4), respectively, and by inserting after paragraph (1) the following
new paragraph:
``(2) Qualified foreign entity.--For purposes of this
subsection, the term `qualified foreign entity' means--
``(A) any qualifying insurance corporation (as
defined in section 1297(f)(1)), and
``(B) any qualified foreign pension fund.''.
(c) Clerical Amendment.--The heading of section 897(l) is amended
by striking ``Qualified Foreign Pension Funds'' and inserting ``Certain
Foreign Entities''.
(d) Effective Date.--The amendments made by this section shall
apply to dispositions and distributions after the date of the enactment
of this Act.
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