Page:United States Statutes at Large Volume 102 Part 4.djvu/559

 PUBLIC LAW 100-647—NOV. 10, 1988

102 STAT. 3529

(C) The table of sections for subpart J of part III of subchapter N of chapter 1 is amended by striking out the item relating to section 986 and inserting in lieu thereof the following: "Sec. 986. Determination of foreign taxes and foreign corporation's earnings and profits."

(2)(A) Subsection (c) of section 988 of the 1986 Code is amended by adding at the end thereof the following new paragraph: "(5) SPECIAL RULES WHERE TAXPAYER TAKES OR MAKES DEUV-

ERY.—If the taxpayer takes or makes delivery in connection with any section 988 transaction described in paragraph (IXBXiii), any gain or loss (determined as if the taxpayer sold the contract, option, or instrument on the date on which he took or made delivery for its fair market value on such date) shall be recognized in the same manner as if such contract, option, or instrument were so sold." (B) The amendment made by subparagraph (A) shall not 26 USC 988 note. apply in any case in which the taxpayer takes or makes delivery before June 11, 1987. (3)(A) Subsection (b) of section 988 of the 1986 Code is amended by adding at the end thereof the following new paragraph: "(3) SPECIAL RULE FOR CERTAIN CONTRACTS, ETC.—In the case of any section 988 transaction described in subsection (c)(l)(B)(iii), any gain or loss from such transaction shall be treated as foreign currency gain or loss (as the case may be)." (B) Subclause (II) of section 988(c)(l)(C)(i) of the 1986 Code is amended to read as follows: "(II) any gain or loss from such transaction shall be treated as foreign currency gain or loss (as the case may be)." (C) Paragraph (2) of section 988(c) of the 1986 Code is amended by inserting "or" at the end of subparagraph (A), by striking out ", or" at the end of subparagraph (B) and inserting in lieu thereof a period, and by striking out subpargigraph (C). (D) Paragraph (3) of section 988(c) of the 1986 (Dode is amended to read as follows: "(3) PAYMENT DATE.—The term 'payment date' means the date on which the payment is made or received." (4) The first sentence of paragraph (1) of section 988(d) is amended by striking out "this section" and inserting in lieu thereof "this subtitle". (5) Subsection (b) of section 989 of the 1986 Code is amended— (A) by striking out "951(a)" in paragraph (3) and inserting in lieu thereof "951(a)(l)(A)", and (B) by adding at the end thereof the following new sentence: "For purposes of the preceding sentence, any amount included in income under section 951(a)(1)(B) shall be treated as an actual distribution made on the last day of the taxable year for which such amount was so included." (6) Clause (iii) of section 988(c)(l)(B) of the 1986 Code is amended to read as follows: "(iii) Entering into or acquiring any forward con- Contracts. tract, futures contract, option, or similar financial instrument unless such instrument would be marked to

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