Page:United States Statutes at Large Volume 103 Part 3.djvu/302

 103 STAT. 2370 PUBLIC LAW 101-239—DEC. 19, 1989 SEC. 7508. TAXATION OF BULK CIGAR IMPORTS. (a) IN GENERAL.—Subsection (c) of section 5704 (relating to tobacco products and cigarette papers and tubes released in bond from customs custody) is amended by inserting "or to a manufacturer of tobacco products or cigarette papers and tubes if such articles are not put up in packages," after "export warehouse,". 26 USC 5704 flj) EFFECTIVE DATE.—The amendment made by subsection (a) •lo**. shall apply to articles imported or brought into the United States after the date of the enactment of this Act. Subtitle F—Miscellaneous Provisions Real property PART I—LIMITATION ON NONRECOGNITION FOR CERTAIN EXCHANGES SEC. 7601. LIKE KIND EXCHANGES BETWEEN RELATED PERSONS. (a) SPECIAL RULES FOR EXCHANGES BETWEEN RELATED PERSONS, ETC.— Section 1031 (relating to exchange of property held for productive use or investment) is amended by adding at the end thereof the following new subsections: "(f) SPECIAL RULES FOR EXCHANGES BETWEEN RELATED PERSONS. — "(1) IN GENERAL.—If— "(A) a taxpayer exchanges property with a related person, "(B) there is nonrecognition of gain or loss to the tax- payer under this section with respect to the exchange of such property (determined without regard to this subsec- y- tion), and "(C) before the date 2 years after the date of the last transfer which was part of such exchange— "(i) the related person disposes of such property, or "(ii) the taxpayer disposes of the property received in the exchange from the related person which was of like kind to the property transferred by the taxpayer, there shall be no nonrecognition of gain or loss under this section to the taxpayer with respect to such exchange; except that any gain or loss recognized by the taxpayer by reason of this subsection shall be taken into account as of the date on which the disposition referred to in subparagraph (C) occurs. "(2) CERTAIN DISPOSITIONS NOT TAKEN INTO ACCOUNT. —For purposes of paragraph (I)(C), there shall not be taken into account any disposition— "(A) after the earlier of the death of the taxpayer or the death of the related person, "(B) in a compulsory or involuntary conversion (within the meaning of section 1033) if the exchange occurred before the threat or imminence of such conversion, or ,^ "(C) with respect to which it is established to the satisfac- tion of the Secretary that neither the exchange nor such disposition had as one of its principal purposes the avoid- ance of Federal income tax. "(3) RELATED PERSON.—For purposes of this subsection, the term 'related person' means any person bearing a relationship to the taxpayer described in section 267(b).

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