Page:United States Statutes at Large Volume 100 Part 3.djvu/491

 PUBLIC LAW 99-514—OCT. 22, 1986

100 STAT. 2299

(2) Subparagraph (A) of paragraph 852(b)(5). (3) Subsection (c) of section 853. (4) Paragraph (2) of subsection 854(b). (5) Subsection (c) of section 855. (b) EFFECTIVE DATE.—The amendments made by subsection (a) shall apply to taxable years beginning after the date of the enactment of this Act. SEC. 656. PROTECTION OF MUTUAL FUNDS RECEIVING THIRDPARTY SUMMONSES.

(a) GENERAL RULE.—Paragraph (3) of subsection 7609(a) is amended— (1) by striking out "and" at the end of subparagraph (F); (2) by striking out the period at the end of subparagraph (G) and inserting in lieu thereof "; and"; and (3) by adding the following new subparagraph: "(H) any regulated investment company (as defined in section 851) and any agent of such regulated investment company when acting as an agent thereof." (b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply to summonses served after the date of the enactment of this Act. SEC. 657. CERTAIN DISTRIBUTIONS NOT TREATED AS PREFERENTIAL DIVIDENDS.

(a) GENERAL RULE.—Subsection (c) of section 562 (relating to preferential dividends) is amended by adding at the end thereof the following new sentence: "In the case of a distribution by a regulated investment company to a shareholder who made an initial investment of at least $10,000,000 in such company, such distribution shall not be treated as not being pro rata or as being preferential solely by reason of an increase in the distribution by reason of reductions in administrative expenses of the company." (b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply to distributions after the date of the enactment of this Act.

Subtitle G—Real Estate Investment Trusts SEC. 661. GENERAL QUALIFICATION REQUIREMENTS. (a) MODIFICATION OF CLOSELY-HELD REQUIREMENTS.—

(1) Paragraph (6) of section 856(a) is amended to read as follows: "(6) which is not closely held (as determined under subsection (h)); and". (2) Section 856 is amended by adding at the end thereof the following new subsection: "(h) CLOSELY HELD DETERMINATIONS.—

"(1) SECTION 542(a)(2) APPLIED.—

"(A) IN GENERAL.—For purposes of subsection (a)(6), a corporation, trust, or association is closely held if the stock ownership requirement of section 542(a)(2) is met. "(B) WAIVER OF PARTNERSHIP ATTRIBUTION, ETC.—For purposes of subparagraph (A)—

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