Page:United States Statutes at Large Volume 100 Part 3.djvu/534

 100 STAT. 2342

PUBLIC LAW 99-514—OCT. 22, 1986 "(A) the income tax imposed by section 11 or 1201(a), or subchapter L of chapter 1, whichever applies, and "(B) the minimum tax imposed by section 55, over" (2) Subparagraph (A) of section 6425(c)(1) is amended to read as follows: "(A) The sum of— "(i) the tax imposed by section 11 or 1201(a), or subchapter L of chapter 1, whichever is applicable, plus "(ii) the tax imposed by section 55, over". (3) Paragraph (1) of section 6655(f) is amended to read as follows: "(1) the sum of— "(A) the tax imposed by section 11 or 1201(a), or subchapter L of chapter 1, whichever is applicable, plus "(B) the tax imposed by section 55, over". (e) TECHNICAL AMENDMENTS.—

(1) APPLICATION OF SECTION 381.—Subsection (c) of section 381

is amended by adding at the end thereof the following new paragraph: "(27) CREDIT UNDER SECTION 53.—The acquiring corporation shall take into account (to the extent proper to carry out the purposes of this section and section 53, and under such regulations as may be prescribed by the Secretary) the items required to be taken into account for purposes of section 53 in respect of the distributor or transferor corporation." (2)

LIMITATION

IN CASE OF CONTROLLED CORPORATIONS.—

Subsection (a) of section 1561 (relating to limitations on certain multiple tax benefits in the case of certain controlled corporations) is amended— (A) by striking out "and" at the end of paragraph (1), by striking out the period at the end of paragraph (2) and inserting in lieu thereof ", and" and by inserting after paragraph (2) the following new paragraph: "(3) one $40,000 exemption amount for purposes of computing the amount of the minimum tax.", (B) by striking out "amounts specified in paragraph (1)" and inserting in lieu thereof "amounts specified in paragraph (1) (and the amount specified in paragraph (3))", and (C) by adding at the end thereof the following new sentence: "In applying section 55(d)(3), the alternative minimum taxable income of all component members shall be taken into account and any decrease in the exemption amount shall be allocated to the component members in the same manner as under paragraph (3)." (3) TREATMENT OF SHORT TAXABLE YEARS.—Subsection (d) of

section 443 (relating to adjustment in computing minimum tax for tax preference) is amended to read as follows: "(d) ADJUSTMENT IN COMPUTING MINIMUM TAX AND TAX PREF-

ERENCES.—If a return is made for a short period by reason of subsection (a)— "(1) the alternative minimum taxable income for the short period shall be placed on an annual basis by multiplying such amount by 12 and dividing the result by the number of months in the short period, and "(2) the amount computed under paragraph (1) of section 55(a) shall bear the same relation to the tax computed on the annual basis as the number of months in the short period bears to 12."

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