Amends the Internal Revenue Code of 1986 to encourage divestiture of certain securities related to the People’s Republic of China (PRC).
Defines “disqualified PRC security” to include interests related to the PRC government, the Chinese Communist Party, and entities with significant PRC ownership.
Establishes that gains from the sale of disqualified PRC securities will be treated as ordinary income.
Introduces a provision for individuals and corporations to be taxed on net PRC securities gain at the highest income tax rate.
Allows taxpayers to elect to pay tax liabilities from dispositions of disqualified PRC securities in three equal installments.
Denies foreign tax credits for income derived from the disposition of disqualified PRC securities.
Effective six months after the enactment of the Act for all provisions related to the disposition of disqualified PRC securities.