Page:United States Statutes at Large Volume 102 Part 4.djvu/612

 102 STAT. 3582

PUBLIC LAW 100-647—NOV. 10, 1988

a single trust for purposes of the tax imposed by chapter 1 of the Internal Revenue Code of 1954, (2) such trusts would have been required to be so treated but for the amendment made by section 1806(b) of the Reform Act, and (3) such trusts did not accumulate any income during such taxable year and did not make any accumulation distributions during such taxable year, then, notwithstanding the amendment ma^e by section 18060)) of the Reform Act, such trusts shall be treated as one trust for purposes of such taxable year. (f) AMENDMENTS RELATED TO SECTION 1807 OF THE REFORM ACT.—

26 USC 468B note.

(1) Paragraphs (I)(A) and (2)(E) of section 468B(d) of the 1986 Code are each amended by striking out "the taxpayer" and inserting in lieu thereof "the taxpayer (or any related person)". (2) Subparagraph (A) of section 468B(d)(2) of the 1986 Code is amended to read as follows: "(A) which is established pursuant to a court order and which extinguishes completely the taxpayer's tort liability with respect to claims described in subparagraph (D),". (3) Clause (i) of section 1807(a)(7)(C) of the Reform Act is amended to read as follows: "(i) any portion of such fund which is established pursuant to a court order and with qualified pa3mients, which meets the requirements of subparagraphs (C) and (D) of section 468B(d)(2) of the Internal Revenue Code of 1954 (as added by this paragraph), and with respect to which an election is made under subparagraph (F) thereof, shall be treated as a designated settlement fund for purposes of section 468B of such Code,". (4) Paragraph (2) of section 468B(b) of the 1986 Code is amended— (A) by striking out "the corporation," and inserting in lieu thereof "a corporation.", and (B) by striking out "no other" and inserting in lieu thereof "No other". (5)(A) Section 468B of the 1986 Code is amended by adding at the end thereof the following new subsection: "(g) CLARIFICATION OF TAXATION OF CERTAIN FUNDS.—Nothing in

Regulations.

any provision of law shall be construed as providing that an escrow account, settlement fund, or similar fund is not subject to current income tax. The Secretary shall prescribe regulations providing for the taxation of any such account or fund whether as a grantor trust or otherwise." (B) Subparagraph (D) of section 1807(a)(7) of the Reform Act is hereby repealed. (g) AMENDMENTS RELATED TO SECTION 1810 OF THE REFORM ACT.—

26 USC 904 note.

26 USC 959 note.

(1) Paragraph (5) of section 181(Ka) of the Reform Act is amended by striking out "section 125(b)(5)" each place it appears and inserting in lieu thereof "section 121(b)(5)". (2) Section 133(d)(3)(B)(iii) of the Tax Reform Act of 1984, as amended by section 1810(i)(2) of the Reform Act, is amended by striking out "Tax Reform Act of 1985" and inserting in lieu thereof "Tax Reform Act of 1986".

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