§ 269B. Stapled entities
(a)
General rule
Except as otherwise provided by regulations, for purposes of this title—
(1)
if a domestic corporation and a foreign corporation are stapled entities, the foreign corporation shall be treated as a domestic corporation.
(2)
in applying section
1563, stock in a second corporation which constitutes a stapled interest with respect to stock of a first corporation shall be treated as owned by such first corporation, and
(b)
Secretary to prescribe regulations
The Secretary shall prescribe such regulations as may be necessary to prevent avoidance or evasion of Federal income tax through the use of stapled entities. Such regulations may include (but shall not be limited to) regulations providing the extent to which 1 of such entities shall be treated as owning the other entity (to the extent of the stapled interest) and regulations providing that any tax imposed on the foreign corporation referred to in subsection (a)(1) may, if not paid by such corporation, be collected from the domestic corporation referred to in such subsection or the shareholders of such foreign corporation.
(c)
Definitions
For purposes of this section—
(1)
Entity
The term “entity” means any corporation, partnership, trust, association, estate, or other form of carrying on a business or activity.
(e)
Subsection (a)(1) not to apply in certain cases
(1)
In general
Subsection (a)(1) shall not apply if it is established to the satisfaction of the Secretary that the domestic corporation and the foreign corporation referred to in such subsection are foreign owned.