Page:United States Statutes at Large Volume 102 Part 4.djvu/613

 PUBLIC LAW 100-647—NOV. 10, 1988

102 STAT. 3583

(3) a a u s e (iv) of section 7701(b)(5)(A) of the 1986 Code is amended by striking out "section 274(k)(2)" and inserting in lieu thereof "section 274(1)(1)(B)". Qi) AMENDMENT RELATED TO SECTION 1821 OF THE REFORM ACT.—

(1) Subsection (e) of section 812 of the 1986 Code (relating to dividends from certain subsidiaries not included in gross investment income) is amended to read as follows: "(e) DIVIDENDS FROM (CERTAIN SUBSIDIARIES NOT INCLUDED IN GROSS INVESTMENT INCOIKIE.—

"(1) IN GENERAL.—For purposes of this section, the term 'gross investment income' shall not include any dividend received by the life insurance company which is a 100 percent dividend. "(2) 100 PERCENT DIVIDEND DEFINED.—

"(A) IN GENERAL.—Elxcept as provided in subparagraphs (B) and (CO, the term '10 percent dividend' means any dividend if the percentage used for purposes of determining the deduction sdlowable under section 243, 244, or 245(b) is 100 percent. "(B)

(DERTAIN DIVIDENDS OUT OF TAX-EXEMPT INTEREST,

ETC.—The term '100 percent dividend' does not include any distribution by a corporation to the extent such distribution is out of tax-exempt interest or out of dividends which are not 100 percent dividends (determined with the application of this subparagraph). "(C) CERTAIN DIVIDENDS RECEIVED BY FOREIGN CORPORA-

TIONS.—The term '100 percent dividends' does not include any dividend described in section 805(a)(4)(E) (relating to certain dividends in the case of foreign corporations)." (2) The amendment made by paragraph (1) shall take effect as Effective date. if included in the amendments made by section 211 of the Tax 26 USC 812 note. Reform Act of 1984. (i) AMENDMENT RELATED TO SECTION 1822 OF THE REFORM ACT.—

Clause (i) of section 216(b)(4)(C) of the Tax Reform Act of 1984 (relating to section 818(c) elections made by certain acquired companies) is amended by striking out "clause (i)" and inserting in lieu thereof "subclause (I)". (j) AMENDMENT RELATED TO SECTION 1825 OF THE REFORM ACT.—

Paragraph (4) of section 1825(a) of the Reform Act (relating to amendments related to section 221 of the Tax Reform Act of 1984) is amended by strikii^ out "Section 7702(e)(2)" and inserting in lieu thereof "Effective with respect to contracts entered into after October 22, 1986, section 7702(e)(2)". (k) AMENDMENTS RELATED TO SECTION 1826 OF THE REFORM ACT.—

(1) Paragraph (5) of section 72(s) of the 1986 Code is amended by striking out "or" at the end of subparagraph (B), by striking out the period at the end of subparagraph (C) and inserting in lieu thereof ", or", and by adding at the end thereof the following new subparagraph: "CD) which is a qualified funding asset (as defined in section 13(Kd), but without r^ard to whether there is a qualified assignment)." (2) The paragraph heading of paragraph (5) of section 72(s) of the 1986 Code is amended by striking out "ANNUITY CONTRACTS WHICH ARE PART OF QUALIFIED PLANS" and inserting in lieu thereof "CERTAIN ANNUITY CONTRACTS". G) AMENDMENTS RELATED TO SECTION 1842 OF THE REFORM ACT.

26 USC 801 note. Contracts. 26 USC 7702 note.

�