Page:United States Statutes at Large Volume 100 Part 3.djvu/1019

 PUBLIC LAW 99-514—OCT. 22, 1986

100 STAT. 2827

(2) EXEMPTION FOR INTERESTS IN CERTAIN CORPORATIONS.—

Paragraph (3) of section 1445(b) (relating to nonpublicly traded domestic corporation furnishing affidavit that it is not a United States real property holding corporation) is amended to read as follows: "(3) NONPUBLICLY TRADED DOMESTICORPORATION FURNISHES AFFIDAVIT THAT INTERESTS IN CORPORATION NOT UNITED STATES REAL PROPERTY INTERESTS.—Except as provided in paragraph (7), this paragraph applies in the case of a disposition of any interest in any domestic corporation if the domestic corporation furnishes to the transferee an affidavit by the domestic corporation stating, under penalty of perjury, that— "(A) the domestic corporation is not and has not been a United States real property holding corporation (as defined in section 897(c)(2)) during the applicable period specified in section 897(c)(l)(A)(ii), or "(B) as of the date of the disposition, interests in such corporation are not United States real property interests by reason of section 897(c)(l)(B)." ^3) NOTICE OF FALSE AFFIDAVIT.—

(A) Clause (i) of section 1445(d)(l)(B) (relating to notice of false affidavit; foreign corporations) is amended to read as follows: "(i) any transferor's agent— "(I) such agent has actual knowledge that such affidavit is false, or "(II) in the case of an affidavit described in subsection (b)(2) furnished by a corporation, such corporation is a foreign corporation, or". (B) Paragraph (1) of section 1445(d) is amended by striking out "described in paragraph (2)(A)" and inserting in lieu thereof "described in paragraph (2)". (4) TREATMENT OF CERTAIN DOMESTIC PARTNERSHIPS, TRUSTS, AND ESTATES.—

(A) IN GENERAL.—Paragraph (1) of section 1445(e) (relating to certain domestic partnerships, trusts, and estates) is amended to read as follows: "(1) CERTAIN DOMESTIC PARTNERSHIPS, TRUSTS, AND ESTATES.—

In the case of any disposition of a United States real property interest as defined in section 897(c) (other than a disposition described in paragraph (4) or (5)) by a domestic partnership, domestic trust, or domestic estate, such partnership, the trustee of such trust, or the executor of such estate (as the case may be) shall be required to deduct and withhold under subsection (a) a tax equal to 28 percent of the gain realized to the extent such gain— "(A) is allocable to a foreign person who is a partner or beneficiary of such partnership, trust, or estate, or "(B) is allocable to a portion of the trust treated as owned by a foreign person under subpart E of part I of subchapter J.

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(B) EFFECTIVE DATE.—The amendment made by subparagraph (A) shall apply to dispositions after the day 30 days after the date of the enactment of this Act. (5)

DISTRIBUTIONS BY DOMESTICORPORATIONS TO FOREIGN

SHAREHOLDER.—Paragraph (3) of section 1445(e) (relating to distributions by certain domestic corporations to foreign share-

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