Page:United States Statutes at Large Volume 100 Part 3.djvu/1027

 PUBLIC LAW 99-514—OCT. 22, 1986

100 STAT. 2835

poses of section 267(a)(2), partnerships described in subparagraph (B) of this paragraph shall be treated as persons specified in section 2670t))." (C) Subsection (e) of section 267 is amended by adding at the end thereof the following new paragraph: "(6) CROSS REFERENCE.— "For additional rules relating: to partnerships, see section 707(b)." (4) CLERICAL AMENDMENTS.—

(A) Paragraph (12) of section 2670t>) (defining related persons) is amended by striking out "same persons owns" and inserting in lieu thereof "same persons own". (B) Subparagraph (B) of section 178(b)(2) (defining related persons) is amended by inserting before the period "and subsection (f)(1)(A) of such section shall not apply". (C) Clause (ii) of section 936(h)(3)(D) (defining related person) is amended to read as follows: "(ii) SPECIAL RULE.—For purposes of clause (i), section 267(b) and section 707(b)(l) shall be applied by substituting '10 percent' for '50 percent'." (5) EXCEPTION FOR CERTAIN INDEBTEDNESS.—Clause (i) of section 174(c)(3)(A) of the Tax Reform Act of 1984 shall be applied by substituting "December 31, 1983" for "September 29, 1983" in the case of indebtedness which matures on January 1, 1999, the payments on which from January 1989 through November 1993 equal U/L plus $77,600, the payments on which from December 1993 to maturity equal U/L plus $50,100, and which accrued interest at 13.75 percent through December 31, 1989. (d) AMENDMENTS RELATED TO SECTION 177 OF THE ACT.— (1) CLARIFICATION OF TREATMENT OF DIVIDENDS PAID BY FEDERAL HOME LOAN BANKS.—

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(A) Subparagraph (B) of section 246(a)(2) (relating to certain dividends of Federal home loan banks) is amended— (i) by striking out "For purposes of subparagraph (A), in" and inserting in lieu thereof "In", and (ii) by striking out subclause (II) of clause (i) and inserting in lieu thereof the following: "(II) which were not previously treated as distributed under subparagraph (A) or this subparagraph, bears to". (B) Paragraph (2) of section 246(a) (relating to subsection not to apply to certain dividends of Federal Home Loan Banks) is amended by redesignating subparagraph (C) as subparagraph (D) and by inserting after subparagraph (B) the following new subparagraph: "(C) COORDINATION WITH SECTION 243.—To the extent that paragraph (1) does not apply to any dividend by reason of subparagraph (A) or (B) of this paragraph, the requirement contained in section 243(a) that the corporation paying the dividend be subject to taxation under this chapter shall not apply." (C) Subparagraph (D) of section 246(a)(2) (as redesignated by subparagraph (B)) is amended by adding at the end thereof the following new clause: "(iv) EARNINGS AND PROFITS.—The earnings and profits of any FHLB for any taxable year shall be treated as equal to the sum of—

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