Bringing Back American Jobs Through Intellectual Property Repatriation Act

Subpart F of part III of subchapter N of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

If a controlled foreign corporation holds intangible property on the date of the enactment of this section and thereafter distributes such property to a domestic corporation which is a United States shareholder with respect to such controlled foreign corporation—

(1) for purposes of part I of subchapter C and any other provision of this title specified by the Secretary, the fair market value of such property on the date of such distribution shall be treated as not exceeding the adjusted basis of such property immediately before such distribution, and

(2) if any portion of such distribution is not a dividend—

(A) no gain shall be recognized by such United States shareholder with respect to such distribution, and

(B) the adjusted basis of such property in the hands of such United States shareholder immediately after such distribution shall be the adjusted basis of such property in the hands of such controlled foreign corporation immediately before such distribution reduced by the amount (if any) of gain not recognized by reason of subparagraph (A) (determined after the application of paragraph (1)).

For purposes of this section, the term intangible property means any—

(1) patent, copyright, license, invention, formula, process, design, pattern, know-how, or format,

(2) method, program, system, procedure, campaign, survey, study, forecast, estimate, or technical data,

(3) computer software (as defined in section 197(e)(3)(B)), or

(4) any similar item, which has substantial value independent of the services of any individual.

In the case of intangible property which is held by a controlled foreign corporation on the date of the enactment of this section and is thereafter distributed to another controlled foreign corporation, the rules of subsection (a) shall apply with respect to such distribution (and any subsequent distribution of such property by a controlled foreign corporation to another controlled foreign corporation or United States shareholder) if, not later than 180 days after the date of such first distribution, such property is distributed to a domestic corporation which is a United States shareholder with respect to each such controlled foreign corporation.

(1) Section 197(f)(2)(B)(i) of such Code is amended by inserting 966(a), after 731,.

(2) The table of sections for subpart F of part III of subchapter N of chapter 1 of such Code is amended by adding at the end the following new item:

The amendments made by this section shall apply to distributions made in taxable years of foreign corporations beginning after December 31, 2023, and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end.