To amend the Internal Revenue Code of 1986 to clarify the treatment for foreign tax credit limitation purposes of certain transfers of intangible property.

H.R. 1159 is a bipartisan proposal designed to simplify how American companies are taxed when they license intellectual property, such as patents or software, to foreign entities. The bill changes the tax classification of income earned from these transfers, treating it as "royalties" rather than "sales" for the purpose of calculating foreign tax credits. For the average citizen, this technical adjustment is intended to prevent double taxation on U.S. businesses operating abroad, potentially making American companies more competitive in the global market and encouraging them to keep the ownership of their inventions within the United States.