Page:United States Statutes at Large Volume 102 Part 4.djvu/474

 102 STAT. 3444

PUBLIC LAW 100-647—NOV. 10, 1988 "(i) the percentage determined by dividing the aggregate contraction in revolving installment obligations by the aggregate face amount of such obligations outstanding as of the close of the taxpayer's last taxable year beginning before January 1, 1987, over (ii) the sum of the applicable percentages under paragraph (3)(D) (as modified by this paragraph) for prior taxable years in the adjustment period. "(C) AGGREGATE coNTRAcmoN IN REVOLVING INSTALLMENT OBLIGATiONS.—For purposes of subparagraph (B), the aggregate contraction in revolving installment obligations is the amount by which— "(i) the aggregate face amount of the revolving installment obligations outstanding as of the close of the taxpayer's last taxable year beginning before January 1, 1987, exceeds "(ii) the aggregate face amount of the revolving installment obligations outstanding as of the close of the taxable year involved. "(D) REVOLVING INSTALLMENT OBLIGATIONS.—For purposes of this paragraph, the term 'revolving installment obligations' means installment obligations arising under a revolving credit plan. "(E) "TREATMENT OF CERTAIN OBLIGATIONS DISPOSED OF ON O BEFORE OCTOBER 26, 1987.—For purposes of subparaR

graphs (B)(i) and (C)(i), in determining the aggregate face amount of revolving installment obligations outstanding as of the close of the taxpayer's last teaable year beginning before January 1, 1987, there shall not be taken into account any obligation— "(i) which was disposed of to an unrelated person on or before October 26, 1987, or "(ii) was disposed of to an unrelated person on or after such date pursuant to a binding written contract in effect on October 26, 1987, and at all times thereafter before such disposition. For purposes of the preceding sentence, the term 'unrelated person' means any person who is not a related person (as defined in section 453(g) of the Internal Revenue Code of 1986). "(5) LIMITATION ON LOSSES FROM SALES OF OBLIGATIONS UNDER REVOLVING CREDIT PLANS.—If 1 or more obligations arising

under a revolving credit plan and taken into account under paragraph (3) are disposed of during the adjustment period, then, notwithstanding any other provision of law— "(A) no losses from such dispositions shall be recognized, and "(B) the aggregate amount of the adjustment for taxable years in the adjustment period (in reverse order of time) A shall be reduced by the amount of such losses. "(6) ADJUSTMENT PERIOD.—For purposes of paragraphs (4) and (5), the adjustment period is the 4-year period under paragraph (3)." (h) AMENDBIENT RELATED TO SECTION 821 OF THE REFORM ACT.—

26 USC 451 note. Section 821(b)(3) of the Reform Act is amended by adding at the end thereof the following new sentence: "The preceding sentence shall also apply to any taxable year beginning after August 16, 1986, and

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