Page:United States Statutes at Large Volume 101 Part 2.djvu/1199

 PUBLIC LAW 100-203—DEC. 22, 1987

101 STAT. 1330-405

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"(3) no later than a reasonable time after the discovery of such failure, steps are taken so that such partnership once more ' meets such gross income requirements, and "(4) such partnership agrees to make such adjustments (including adjustments with respect to the partners) as may be required by the Secretary with respect to such period, then, notwithstanding such failure, such entity shall be treated as continuing to meet such gross income requirements for such period. "(f) EFFECT OF BECOMING CORPORATION.—As of the 1st day that a partnership is treated as a corporation under this section, for purposes of this title, such partnership shall be treated as— "(1) transferring all of its assets (subject to its liabilities) to a newly formed corporation in exchange for the stock of the corporation, and "(2) distributing such stock to its partners in liquidation of their interests in the partnership." i (b) CLERICAL AMENDMENT.—The table of sections for chapter 79 is amended by adding at the end thereof the following new item: "Sec. 7704. Certain publicly traded partnerships treated as corporations." (c) EFFECTIVE DATE.—

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(1) IN GENERAL.—The amendments made by this section shall apply— (A) except as provided in subparagraph (B), to taxable ,- ^, years beginning after December 31, 1987, or (B) in the case of an existing partnership, to taxable years beginning after December 31, 1997. - - . • (2) EXISTING PARTNERSHIP.—For purposes of this subsection— (A) IN GENERAL.—The term "existing partnership" means any partnership if— " • '• • (i) such partnership was a publicly traded partner^ ship on December 17, 1987, (ii) a registration statement indicating that such partnership was to be a publicly traded partnership was filed with the Securities and Exchange Commission with respect to such partnership on or before such date, or (iii) with respect to such partnership, an application • was filed with a State regulatory commission on or before such date seeking permission to restructure a portion of a corporation as a publicly traded partner(B) SPECIAL RULE WHERE SUBSTANTIAL NEW U N E OF BUSINESS ADDED AFTER DECEMBER 17, 1987.—A partnership

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which, but for this subparagraph, would be treated as an existing partnership shall cease to be treated as an existing partnership as of the 1st day after December 17, 1987, on which there has been an addition of a substantial new line of business with respect to such partnership.

SEC. 10212. TREATMENT OF PUBLICLY TRADED PARTNERSHIPS UNDER SECTION 469.

' (a) GENERAL RULE.—Section 469 (relating to passive activity losses and credits limited) is amended by redesignating subsections (k) and (1) as subsections (1) and (m), respectively, and by inserting after subsection (j) the following new subsection:

26 USC 7704 note,

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