Page:United States Statutes at Large Volume 100 Part 3.djvu/996

 100 STAT. 2804

PUBLIC LAW 99-514—OCT. 22, 1986 -«

(B) EFFECTIVE DATE.—The amendment made by subparagraph (A) shall apply in the case of plans of complete liquidation pursuant to which any distribution is made in a taxable year beginning after December 31, 1984 (December 31, 1983, in the case of an affiliated group to which an election under section 6003X7) of the Tax Reform Act of 1984 applies). {.S) AMENDMENT OF SECTION 338.— (A) IN GENERAL.—Paragraph (3) of section 338(d) (defining qualified stock purchase) is amended to read as follows: "(3) QuAUFiED STOCK PURCHASE.—The term 'qualified stock purchase' means any transaction or series of transactions in which stock (meeting the requirements of section 1504(a)(2)) of 1 corporation is acquired by another corporation by purchase during the 12-month acquisition period." (B) EFFECTIVE DATE.—The amendment made by subparagraph (A) shall apply in cases where the 12-month acquisition period (as defined in section 338(h)(l) of the Internal Revenue Code of 1954) begins after December 31, 1985.

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(9) TREATMENT OF CERTAIN CORPORATION ORGANIZED ON FEBRUARY 22, 1983.—In the case of a Rhode Island corporation

which was organized on February 22, 1983, and which on February 25, 1983— (A) purchased the stock of another corporation, (B) filed an election under section 338(g) of the Internal Revenue C!ode of 1986 with respect to such purchase, and (C) merged into the acquired corporation, such purchase of stock shall be considered as made by the acquiring corporation, such election shall be valid, and the acquiring corporation shall be considered a purchasing corporation for purposes of section 338 of such Code without regard to the duration of the existence of the acquiring corporation. (10) TREATMENT OF FORMER DISC'S.—Paragraph (7) of section 1504(b) (defining includible corporation) is amended to read as follows: "(7) A DISC (as defined in section 992(a)(l)), or any other corporation which has accumulated DISC income which is derived after December 31, 1984." (f) AMENDMENTS RELATED TO SECTION 61 OF THE ACT.— (1) TREATMENT OF DISTRIBUTIONS OF APPRECIATED PROPERTY.—

(A) Subsection Ob) of section 312 (relating to effect on earnings and profits) is amended to read as follows: "(b) DISTRIBUTIONS OF APPRECIATED PROPERTY.—On the distribu-

tion by a corporation, with respect to its stock, of any property the fair market value of which exceeds the adjusted basis thereof— "(1) the earnings and profits of the corporation shall be increased by the amount of such excess, and "(2) subsection (a)(3) shall be applied by substituting 'fair market value' for 'adjusted basis'. For purposes of this subsection and subsection (a), the adjusted basis of any property is its adjusted basis as determined for purposes of computing earnings and profits." (B) Subsection (c) of section 312 is amended by inserting "and" at the end of paragraph (1), by striking out ", and" at the end of paragraph (2) and inserting in lieu thereof a period, and by striking out paragraph (3).

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