Page:United States Statutes at Large Volume 102 Part 4.djvu/598

 102 STAT. 3568

PUBLIC LAW 100-647—NOV. 10, 1988 to (or for the benefit of) such grandchild not less frequently than annually. "(C) COORDINATION WITH SECTION 2653(a) OF THE I 9 8 6

CODE.—In the case of any transfer which would be a generation-skipping transfer but for subparagraph (A), the rules of section 2653(a) of the Internal Revenue Code of 1986 shall apply as if such transfer were a generation-skipping transfer. "(D) COORDINATION WITH TAXABLE TERMINATIONS AND TAX-

ABLE DISTRIBUTIONS.—For purposes of chapter 13 of the

26 USC 2601 "°*®26 USC 2601 note.

26 USC 2601 ^°^-

Internal Revenue Code of 1986, the terms 'taxable termination' and 'taxable distribution' shall not include any transfer which would be a direct skip but for subparagraph (A). "(4) DEFINITIONS.—Terms used in this section shall have the same respective meanings as when used in chapter 13 of the Internal Revenue Code of 1986; except that section 2612(c)(2) of such (Dode shall not apply in determining whether an individual is a grandchild of the transferor." (B) Clause (iii) of section 1443(b)(3)(B) of the Reform Act (as amended by subparagraph (A)) shall apply only to transfers after June 10, 1987. (4) Subsection (d) of section 1433 of the Reform Act is amended— (A) by striking out "shall be treated as a direct skip" and inserting in lieu thereof "shall be treated as a direct skip to such grandchild", (B) by striking out "would be a direct skip" in subparagraph (B) and inserting in lieu thereof "would be a direct skip to a grandchild", and (C) by adding at the end thereof the following new sentence: "Unless the grandchild otherwise directs by will, the estate of such grandchild shall be entitled to recover from the person receiving the property on the death of the grandchild any increase in Federal estate tax on the estate of the grandchild by reason of the preceding sentence." (5) Subparagraph (C) of section 1433(b)(2) of the Reform Act shall not exempt any direct skip from the amendments made by subtitle D of title XIV of the Reform Act if— (A) such direct skip results from the application of section 2044 of the 1986 Code, and (B) such direct skip is attributable to property transferred to the trust after October 21, 1988. SEC. 1015. AMENDMENTS RELATED TO TITLE XV OF THE REFORM ACT. (a) AMENDMENT RELATED TO SECTION 1501 OF THE REFORM ACT.—

Subparagraph (B) of section 6724(d)(2) of the 1986 Code is amended by striking out "6031(b)" and inserting in lieu thereof "6031(b) or (0". (b) AMENDMENTS RELATED TO SECTION 1503 OF THE REFORM ACT.—

(1) Subparagraph (A) of section 6013(b)(5) of the 1986 Code is amended to read as follows: "(A) COORDINATION WITH SECTION 6653.—For purposes of

section 6653, where the sum of the amounts shown as tax on the separate returns of each spouse is less than the amount shown as tax on the joint return made under this subsection—

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