International Tax Institute, Inc. August 13, 1976
A. Scope of the DISC Provisions -Primarily Bill Sec. 1161
1. Incremental Rule
2. Exclusion of Certain Military Goods
3. Reorganization Rules
4. Increase in Deferral Period
5. Revision of Deficiency Distribution Rules
6. Denial of Benefits for Bribe and Boycott Income
7. Agricultural Products
B. The Incremental Rules
1. What the rule does: DISC benefits are available only to the extent exports are increased over a base period amount.
2. How the rule works: DISC income attributable to the nonincremental portion of gross receipts . is a new type of deemed distribution.
3. Illustrating the rule:
Taxable income $100
Base period income - 30.
Incremental income . $ 70
Base period distribution $ 30'.
Regular distribution 35
Total distribution . $ 65
4. New terms
a. Export gross receipts §995(e)(4)
b. b. Base period f'995(e) (5)
c. Adjusted base period export gross receipts !'995(e)(3)
d. Taxable income attributable to base period export gross receipts 995(e) (I)
e. Adjusted taxable income. \.."995 (e,) (2)
5. The formula: 995(e)(1)
TIATBPEGR = ATI x ABPEGR .
This is the deemed distribution in new ~995(b)(I)(D)