1. Restoration of limitation on downward attribution of stock ownership in applying constructive ownership rules (a) In general Section 958(b) of the Internal Revenue Code of 1986 is amended— (1) by inserting after paragraph (3) the following: (4) Subparagraphs (A), (B), and (C) of section 318(a)(3) shall not be applied so as to consider a United States person as owning stock which is owned by a person who is not a United States person. , and (2) by striking Paragraph (1) in the last sentence and inserting Paragraphs (1) and (4) . (b) Foreign controlled United States shareholders Subpart F of part III of subchapter N of chapter 1 of such Code is amended by inserting after section 951A the following new section: 951B. Amounts included in gross income of foreign controlled United States shareholders (a) In general In the case of any foreign controlled United States shareholder of a foreign controlled foreign corporation— (1) this subpart (other than sections 951A, 951(b), and 957) shall be applied with respect to such shareholder (separately from, and in addition to, the application of this subpart without regard to this section)— (A) by substituting foreign controlled United States shareholder for United States shareholder each place it appears therein, and (B) by substituting foreign controlled foreign corporation for controlled foreign corporation each place it appears therein, and (2) section 951A shall be applied with respect to such shareholder— (A) by treating each reference to United States shareholder in such section as including a reference to such shareholder, and (B) by treating each reference to controlled foreign corporation in such section as including a reference to such foreign controlled foreign corporation. (b) Foreign controlled United States shareholder For purposes of this section, the term foreign controlled United States shareholder means, with respect to any foreign corporation, any United States person which would be a United States shareholder with respect to such foreign corporation if—