Page:United States Statutes at Large Volume 101 Part 2.djvu/1191

 PUBLIC LAW 100-203—DEC. 22, 1987 Hi ^ad 2 _

101 STAT. 1330-397

tions) shall be included in gross income for such taxable year. "(B) SPECIAL RULE FOR CERTAIN TRANSFERS.—For purposes

", .g,

of subparagraph (A), any transfer in a corporation after December 15, 1987, shall be treated as a transfer to a person whose ownership could not qualify such corporation as a family corporation unless it is a transfer— ,,,r., "(i) to a member of the family of the transferor, or Y,o~ "(ii) in the case of a corporation described in subsection (h), to a member of a family which on December 15, 1987, held stock in such corporation which qualified the corporation under subsection (h). ^' "(6) SUBCHAPTER C TRANSACTIONS.—The application of this subsection with respect to a taxpayer which is a party to any transaction with respect to which there is nonrecognition of gain or loss to any party by reason of subchapter C shall be determined under regulations prescribed by the Secretary." (c) TECHNICAL AMENDMENTS.—

(1) Subsection (e) of section 447 (as redesignated by subsection (a)) is amended by striking out "subsection (c)(2)" and inserting in lieu thereof "subsection (d)". (2) Paragraph (1) of section 447(h) is amended— ^i (A) by striking out "This section shall not apply to any ?£ I corporation" and inserting in lieu thereof "A corporation is described in this subsection", (B) by striking out "subsection (d)" each place it appears llBtia ( and inserting in lieu thereof "subsection (e)', and iO,««; (C) by striking out "subsection (d)(1)" each place it appears and inserting in lieu thereof "subsection (e)(1)". (d) EFFECTIVE DATE.—The amendments made by this section shall 26 USC 447 note. apply to taxable years beginning after December 31, 1987. SEC. 10206. ENTITIES MAY ELECT TAXABLE YEARS OTHER THAN REQUIRED TAXABLE YEAR. (a) ELECTION OF DIFFERENT Y E A R. —

(1) IN GENERAL.—Part I of subchapter E of chapter 1 (relating, to accounting periods) is amended by adding at the end thereof J,, the following new section: * °^ •SEC. 444. ELECTION OF TAXABLE YEAR OTHER THAN REQUIRED TAXABLE YEAR.

"(a) GENERAL RULE.—Except as provided in subsections (b) and (c), a partnership, S corporation, or personal service corporation may elect to have a taxable year other than the required taxable year. "(b) LIMITATIONS ON TAXABLE YEARS WHICH MAY B E ELECTED.—

"(1) IN GENERAL.—Except as provided in paragraphs (2) and ' (3), an election may be made under subsection (a) only if the deferral period of the taxable year elected is not longer than 3 '^i months. "(2) CHANGES IN TAXABLE YEAR.—Except as provided in para<• graph (3), in the case of an entity changing a taxable year, an election may be made under subsection (a) only if the deferral A period of the taxable year elected is not longer than the shorter iii- of—

"(A) 3 months, or "" Copy read "section.".

26 USC 444.

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