Page:United States Statutes at Large Volume 100 Part 3.djvu/1037

 PUBLIC LAW 99-514—OCT. 22, 1986

100 STAT. 2845

(e) CLARIFICATION OF EFFECT OF FRESH START ON EARNINGS AND

PROFITS.—Paragraph (1) of section 21603) of the Tax Reform Act of 1984 is amended by adding at the end thereof the following new sentences: "The preceding sentence shall apply for purposes of computing the earnings and profits of any insurance company for its 1st taxable year beginning in 1984. The preceding sentence shall be applied by substituting '1985' for '1984' in the case of an insurance company which is a member of a controlled group (as defined in section 806(d)(3)), the common parent of which is "(A) a company having its principal place of business in Alabama and incorporated in Delaware on November 29, 1979, or "(B) a company having its principal place of business in Houston, Texas, and incorporated in Delaware on June 9, 1947." (f) TREATMENT OF SECTION 818(C) ELECTIONS MADE BY CERTAIN ACQUIRED COMPANIES.—Parcigraph (4) of section 2160t>) of the Tax

Reform Act of 1984 is amended by adding at the end thereof the following new subparagraph: "(C) SECTION 818(C) ELECTIONS MADE BY CERTAIN ACQUIRED COMPANIES.—

"(i) IN GENERAL.—If the case of any corporation— "(I) which made an election under such section 818(c) before September 28, 1983, and "(II) which was acquired in a qualified stock purchase (as defined in section 338(c) of the Internal Revenue Code of 1954) before December 31, 1983, the fact that such corporation is treated as a new corporation under section 338 of such Code shall not result in the election described in clause (i) not applying to such new corporation. "(ii) TIME FOR MAKING SECTION 818(C) OR 338 ELEC-

TION.—In the case of any corporation described in clause (i), the time for making an election under section 818(c) of such Code (with respect to the first taxable year of the corporation beginning in 1983 and ending after September 28, 1983), or making an election under section 338 of such Code with respect to the qualified stock purchase described in clause (i)(ID, shall not expire before the close of the 60th day after the date of the enactment of the Tax Reform Act of 1986. "(iii) STATUTE OF LIMITATIONS.—In the case of any such election under section 818(c) or 338 of such Code which would not have been timely made but for clause (ii), the period for assessing any deficiency attributable to such election (or for filing claim for credit or refund of any overpayment attributable to such election) shall not expire before the date 2 years after the date of the enactment of this Act. SEC. 1823. AMENDMENT RELATED TO SECTION 217 OF THE ACT.

Subsection (n) of section 217 of the Tajf Reform Act of 1984 (relating to special rule for companies using net level reserve method for noncancellable accident and health insurance contracts) is amended to read as follows: "(n) SPECIAL RULE FOR COMPANIES USING NET LEVEL RESERVE METHOD FOR NONCANCELLABLE ACCIDENT AND HEALTH INSURANCE

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