and inserting to which this paragraph applies , and (2) by striking subparagraph (B) and inserting the following: (B) Distributions to which this paragraph applies This paragraph shall apply to— (i) any distribution of property by an estate which is described in section 495(a)(1)(B)(ii) or by an applicable trust (as defined in section 495(c)), and (ii) any distribution during the taxable year of any other estate or trust which makes an election under this paragraph. Any election made under clause (ii) shall be made on the return of such estate or trust for such taxable year, and, once made, may be revoked only with the consent of the Secretary. . (b) Treatment of loans Section 643(i) is amended— (1) by inserting or an applicable trust (as defined in section 495(c)) after foreign trust in paragraph (1), (2) by striking who is a United States person in paragraph (1)(A) and inserting who is not exempt from tax under this chapter , (3) by striking United States person in paragraph (1)(B) and inserting person (other than a person who is exempt from tax under this chapter) , (4) by striking paragraph (2)(C), and (5) by striking foreign in the heading thereof and inserting certain . (c) Treatment of multiple trusts Section 643(f)(2) is amended by inserting or the rules of part IV of subchapter E after this chapter . (d) Foreign trusts (1) In general Subpart F of part I of subchapter J is amended by adding at the end the following new section: 686. Special rules for applicable foreign trusts (a) In general For purposes of this part, in the case of any beneficiary of an applicable foreign trust who is required to include in income any amount attributable to gain on an applicable transfer of any covered asset, the amount of tax imposed under this chapter shall be increased by the amount which bears the same ratio to the amount of the deferral recapture amount which would be determined on such applicable transfer under section 492(a) (determined as if such trust were an applicable taxpayer and section 492 applied to any