Page:United States Statutes at Large Volume 100 Part 3.djvu/146

 100 STAT. 1954

PUBLIC LAW 99-509—OCT. 21, 1986 -

26 USC 5701.

(4) TREATMENT OF SMOKELESS TOBACCO IN INVENTORY ON J U N E

30, 1986.—The tax imposed by section 5701(e) of the Internal Revenue Code of 1954 shall not apply to any smokeless tobacco which— (A) on June 30, 1986, was in the inventory of the manu:. facturer or importer, and (B) on such date was in a form ready for sale.

PART III—TAX TREATMENT OF CONRAIL PUBLIC SALE 45 USC 1347.

SEC. 8021. TAX TREATMENT OF CONRAIL PUBLIC SALE. (a) TREATMENT AS NEW CORPORATION.—

pose, p. 2095.

26 USC 338.

Securities. .

(1) IN GENERAL.—For periods after the public sale, for purposes of the Internal Revenue Code of 1954, Conrail shall be treated as a new corporation which purchased all of its assets as of the beginning of the day after the date of the public sale for an amount equal to the deemed purchase price. (2) ALLOCATION AMONG ASSETS.—The deemed purchase price shall be allocated among the assets of Conrail in accordance with the temporary regulations prescribed under section 338 of the Internal Revenue Code of 1954 (as such regulations were in effect on the date of the enactment of this Act). The Secretary shall establish specific guidelines for carrying out the preceding sentence so that the basis of each asset will be clearly ascertainable. For purposes of applying the regulations referred to in the first sentence, accounts receivable and materials and supplies shall be treated as cash equivalents. (3) DEEMED PURCHASE PRICE.—For purposes of this subsection, the deemed purchase price is an amount equal to the gross amount received pursuant to the public sale, multiplied by a fraction— ..ynU i^: (A) the numerator of which is 100 percent, and (B) the denominator of which is the percentage (by value) of the stock of Conrail sold in the public sale. The amount determined under the preceding sentence shall be adjusted under regulations prescribed by the Secretary for liabilities of Conrail and other relevant items. (b)

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No

INCOME FROM CANCELLATION OF DEBT OR PREFERRED

STOCK.—No amount shall be included in the gross income of any person by reason of any cancellation of any obligation (or preferred stock) of Conrail in connection with the public sale. (c) DISALLOWANCE OF CERTAIN DEDUCTIONS.—No deduction shall be allowed to Conrail for any amount which is paid after the date of the public sale to employees of Conrail for services performed on or before the date of the public sale. (d) WAIVER OF CERTAIN EMPLOYEE STOCK OWNERSHIP PLAN PROVI-

26 USC 401, 501.

SIONS.—For purposes of determining whether the employee stock ownership plans of Conrail meet the qualifications of sections 401 and 501 of the Internal Revenue Code of 1954— (1) the limits of section 415 of such Code (relating to limitations on benefits and contributions under qualified plans) shall not apply with respect to interests in stock transferred pursuant to this Act or a law heretofore enacted, and

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