Page:United States Statutes at Large Volume 102 Part 4.djvu/437

 PUBLIC LAW 100-647—NOV. 10, 1988

102 STAT. 3407

registered with a domestic board of trade which is designated as a contract market by the Commodities Futures Trading Commission. "(Ill) SECTION 1256 CONTRACT.—The term 'section 1256 contract' has the meaning given to such term by section 1256(b)." (7) The subsection (d) of section 1363 of the 1986 Code which relates to distributions of appreciated property, and subsection (e) of section 1363 of the 1986 C!ode, are hereby repealed. (g) AMENDMENTS RELATED TO SECTION 633 OF THE REFORM ACT.—

(1) Subsection (b) of section 633 of the Reform Act is amended to read as follows: "(b) BUILT-IN GAINS OF S CORPORATIONS.—

"(1) IN GENERAL.—The amendments made by section 632 (other than subsection (b) thereof) shall apply to taxable years beginning after December 31, 1986, but only in cases where the return for the taxable year is filed pursuant to an S election made after December 31, 1986. "(2) APPLICATION OF PRIOR LAW.—In the case of any taxable year of an S corporation which begins after December 31, 1986, and to which the amendments made by section 632 (other than subsection (b) thereof) do not apply, paragraph (1) of section 1374(b) of the Internal Revenue Code of 1954 (as in effect on the date before the date of the enactment of this Act) shall be applied as if it read as follows: " '(1) an amount equal to 34 percent of the amount by which the net capital gain of the corporation for the taxable year exceeds $25,000, or' ". (2) Subparagraph (B) of section 633(c)(l) of the Reform Act is amended by striking out "50 percent or more" and inserting in lieu thereof "more than 50 percent". (3) Paragraph (1) of section 633(d) of the Reform Act is amended— (A) by striking out "this section" and inserting in lieu thereof "this subtitle", (B) by striking out "would be recognized and inserting in lieu thereof "would be recognized by the liquidating corporation", and (C) by adding at the end thereof the following new sentence: "Section 333 of the Internal Revenue Code of 1954 (as in effect on the day before the date of the enactment of this Act) shall continue to apply to any complete liquidation described in the preceding sentence.'. (4) Subparagraph (C) of section 633(d)(2) of the Reform Act is amended to read as follows: "(C) any gain on an asset acquired by the qualified corporation if— "(i) the basis of such asset in the hands of the qualified corporation is determined (in whole or in part) by reference to the basis of such asset in the hands of the person from whom acquired, and "(ii) a principal purpose for the transfer of such asset to the qualified corporation was to secure the benefits of this subsection." (5)(A) Subparagraph (A) of section 633(d)(5) of the Reform Act is amended by striking out "10 or fewer qualified persons" and inserting in lieu thereof "a qualified group".

26 USC 336 note,

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