SECTION 1. OVERVIEW

Section 956(c) defines United States property generally to include an obligation of a United States person. On September 16, 1988, the Internal Revenue Service and the Treasury Department published Notice 88–108, 1988–2 C.B. 445, which announced that final regulations issued under section 956 will exclude from the definition of the term “obligation” an obligation that would constitute an investment in United States property if held at the end of the controlled foreign corporation’s taxable year, so long as the obligation is collected within 30 days from the time it is incurred. This exclusion shall not apply, however, if the controlled foreign corporation holds for 60 or more calendar days during such taxable year obligations which, without regard to the 30 day rule described in the preceding sentence, would constitute an investment in United States property if held at the end of the controlled foreign corporation’s taxable year. See S. Rep. No. 103–37, at 178 (1993) (“The bill is not intended to change the measurement of U.S. property that may apply, for example, in the case of short-term obligations, as provided in IRS Notice 88–108”).