Bills · HR 2186
IN COMMITTEE· 119TH CONGRESS
House BillHR 2186Taxation
To amend the Internal Revenue Code of 1986 to restore the limitation on downward attribution of stock ownership in applying constructive ownership rules.
INTRO MAR 18· LAST ACTION MAR 18
READING
4MIN
COSPONSORS
1
READER REACTIONS0 TOTAL
NO VOTES YET · BE THE FIRST
- Introduced only
LEGISLATIVE PROGRESS
STEP 2 / 8Introduced
In Committee
Reported
Passed House
Passed Senate
Conference
To President
Became Law
WHAT THE BILL DOES
AI-writtenThis bill matters because it impacts how the U.S. taxes the global profits of multinational companies, particularly those with U.S. operations that are part of a larger foreign corporate structure. The 2017 tax law's changes led to increased tax complexity and, in some cases, higher tax burdens for U.S. subsidiaries of foreign-owned groups, as they were deemed to own stock in foreign affiliates that they didn't directly control. This could put U.S. companies at a disadvantage compared to their international competitors.
If this bill becomes law, it could reduce the tax burden and simplify compliance for some U.S. companies that are part of foreign-owned corporate families by restoring a prior limitation on how stock ownership is determined. However, the introduction of new categories and rules for 'foreign controlled' entities means that the tax treatment won't fully revert to pre-2017 norms, aiming to balance tax relief with continued taxation of certain foreign profits, particularly those covered by the GILTI regime. If it doesn't become law, the current rules, which many businesses find overly broad, will continue to apply.
KEY PROVISIONS
4AI-extractedPROVISION 01
Restores a limitation on 'downward attribution' of stock ownership, preventing stock owned by a foreign person from being considered as owned by a U.S. person for certain tax calculations.
This makes it less likely for a U.S. company to be treated as owning foreign affiliates of its foreign parent, potentially reducing its tax burden on foreign income.
PROVISION 02
Creates new definitions for a 'foreign controlled United States shareholder' and a 'foreign controlled foreign corporation'.
These new categories identify specific types of U.S. persons and foreign companies that will be subject to targeted tax rules under this bill.
PROVISION 03
Applies certain Subpart F tax rules, including the Global Intangible Low-Taxed Income (GILTI) tax, to these newly defined 'foreign controlled' entities.
This ensures that even with the restored downward attribution limitation, specific foreign profits of these foreign-controlled entities will still be subject to U.S. taxation.
PROVISION 04
The changes apply to the last taxable year of foreign corporations beginning before January 1, 2025, and subsequent taxable years, as well as corresponding U.S. person taxable years.
This means the bill's changes would take effect relatively quickly and affect ongoing tax periods, not just future ones.
SPONSORSHIP
1 + 1
R· Kansas
YRS IN OFFICE
9
BILLS LED
20
COSPONSOR BREAKDOWNBIPARTISAN · 0%
DEM 1 REP 0 IND 0
ACTION TIMELINE
2 EVENTSMAR 18
Introduced in House
MAR 18
Referred to the House Committee on Ways and Means.
BILL INFO
TypeHouse Bill
NumberHR 2186
Congress119th
StatusIn Committee
IntroducedMar 18, 2025
Last actionMar 18, 2025
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IN COMMITTEE· 119TH CONGRESS · WAYS AND MEANS COMMITTEE · INTRODUCED MAR 18, 2025
House BillHR 2186Taxation
To amend the Internal Revenue Code of 1986 to restore the limitation on downward attribution of stock ownership in applying constructive ownership rules.
INTRODUCED MAR 18, 2025· LAST ACTION MAR 18, 2025
PASSAGE CHANCES
—%
READING
4 min
COSPONSORS
1
COMPLEXITY
Moderate
