ll of the properties constituting a
trade or business of a domestic partnership;
(2) after the acquisition at least 80 percent of
the stock (by vote or value) of the entity is held--
(A) in the case of an acquisition with
respect to a domestic corporation, by former
shareholders of the domestic corporation by
reason of holding stock in the domestic
corporation; or
(B) in the case of an acquisition with
respect to a domestic partnership, by former
partners of the domestic partnership by reason
of holding a capital or profits interest in the
domestic partnership; and
(3) the expanded affiliated group which after the
acquisition includes the entity does not have
substantial business activities in the foreign country
in which or under the law of which the entity is
created or organized when compared to the total
business activities of such expanded affiliated group.
(c) Definitions and Special Rules.--
(1) Rules for application of subsection (b).--In
applying subsection (b) for purposes of subsection (a),
the following rules shall apply:
(A) Certain stock disregarded.--There shall
not be taken into account in determining
ownership for purposes of subsection (b)(2)--
(i) stock held by members of the
expanded affiliated group which
includes the foreign incorporated
entity; or
(ii) stock of such entity which is
sold in a public offering related to
the acquisition described in subsection
(b)(1).
(B) Plan deemed in certain cases.--If a
foreign incorporated entity acquires directly
or indirectly substantially all of the
properties of a domestic corporation or
partnership during the 4-year period beginning
on the date which is 2 years before the
ownership requirements of subsection (b)(2) are
met, such actions shall be treated as pursuant
to a plan.