Page:United States Statutes at Large Volume 102 Part 4.djvu/555

 PUBLIC LAW 100-647—NOV. 10, 1988

102 STAT. 3525

(11) Subsection (c) of section 2104 of the 1986 Code is amended by striking out "section 861(a)(l)(B), section 861(a)(l)(G), or section 861(a)(l)(H)" and inserting in lieu thereof "subparagraph (A), (C), or (D) of section 861(a)(l)". (12) Subparagraph (A) of section 904(g)(9) of the 1986 Code is amended by striking out "861(a)(l)(B)' and inserting in lieu thereof "861(a)(l)(A)". (13XA) Paragraph (1) of section 4373 of the 1986 Code is amended to read as follows: "(1) EFFECTIVELY CONNECTED ITEMS.—Any amount which is effectively connected with the conduct of a trade or business within the United States unless such amount is exempt from the application of section 882(a) pursuant to a treaty obligation of the United States." (B) The amendment made by subparagraph (A) shall apply 26 USC 4373 with respect to premiums paid after the date 30 days after the note. date of the enactment of this Act. (14) Paragraph (1) of section 884(f) of the 1986 Code is amended by inserting "(or having gross income treated as effectively connected with the conduct of a trade or business in the United States)" after "United States" in the material preceding subparagraph (A) thereof. (15) Section 861(a)(2)(C) of the 1986 Code is amended by striking out "section 243(d)" and inserting in lieu thereof "section 243(e)". (r) AMENDMENTS RELATED TO SECTION 1242 OF THE REFORM ACT.—

(1) Paragraph (7) of section 864(c) of the 1986 Code is amended to read as follows: "(7)

TREATMENT OF CERTAIN PROPERTY TRANSACTIONS.—For

purposes of this title, if^ "(A) any property ceases to be used or held for use in connection with the conduct of a trade or business within the United States, and "(B) such property is disposed of within 10 years after such cessation, the determination of whether any income or gain attributable to such disposition is taxable under section 871(b) or 882 (as the case may be) shall be made as if such sale or exchange occurred immediately before such cessation and without regard to the requirement that the taxpayer be engaged in a trade or business within the United States during the taxable year for which such income or gain is taken into account." (2) Paragraph (6) of section 864(c) of the 1986 (Dode is amended to read as follows: "(6) TREATMENT OF CERTAIN DEFERRED PAYMENTS, ETC.—For

purposes of this title, in the case of any income or gain of a nonresident alien individual or a foreign corporation which— "(A) is taken into account for any taxable year, but "(B) is attributable to a sale or exchange of property or the performance of services (or any other transaction) in any other taxable year, the determination of whether such income or gain is taxable under section 871(b) or 882 (as the case may be) shall be made as if such income or gain were taken into account in such other taxable year and without regard to the requirement that the taxpayer be engaged in a trade or business within the United States during the taxable year referred to in subparagraph (A),"

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