Page:United States Statutes at Large Volume 103 Part 3.djvu/354

 103 STAT. 2422 PUBLIC LAW 101-239—DEC. 19, 1989 1986 shall be made with respect to such change in method of accounting, (n) AMENDMENTS RELATED TO SECTION 6077 OF THE 1988 ACT. — (1) Paragraph (1) of section 847 is amended— (A) by striking "separate estimated tax" and inserting "special estimated tax, and (B) by striking "after December 31, 1986" and inserting "in taxable years beginning after December 31, 1986". (2) The first sentence of section 847(2) is amended to read as follows: "The deduction under paragraph (1) shall be allowed only to the extent that such deduction would result in a tax benefit for the taxable year for which such deduction is allowed <.r or any carryback year and only to the extent that special ' estimated tax payments are made in an amount equal to the tax benefit attributable to such deduction on or before the due date (determined without regard to extensions) for filing the return for the taxable year for which the deduction is allowed." (3) Paragraph (5) of section 847 is amended by adding at the end the following new sentence: "To the extent that any amount added to the special loss discount account is not subtracted from such account before the 15th year after the year for which the amount was so added, such amount shall be subtracted from such account for such 15th year and included in gross income for such 15th year." (4) Paragraph (9) of section 847 is amended by striking "and" at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting ", and", and by adding at the end the following new subparagraph: "(C) providing for the application of this section in cases where the deduction allowed under paragraph (1) for any taxable year is less than the excess referred to in paragraph (1) for such year." (5) Section 847 (as amended by paragraph (4)) is amended by redesignating paragraph (9) as paragraph (10) and by inserting after paragraph (8) the following new paragraph: "(9) EFFECT ON EARNINGS AND PROFITS.—In determining the earnings and profits— "(A) any special estimated tax payment made for any taxable year shall be treated as a pa3anent of income tax imposed by this title for such taxable year, and "(B) any deduction or inclusion under this section shall not be taken into account. Nothing in the preceding sentence shall be construed to affect the application of section 56(g) (relating to adjustments based on ad- justed current earnings)." (6) Paragraph (8) of section 847 is amended by adding at the end the following new sentence: "The limitations on consolida- tion contained in section 1503(c) shall not apply to the deduction allowed under paragraph (1)." (o) AMENDMENTS RELATED TO SECTION 6105 OF THE 1988 ACT. — (1) The subsection (c) of section 5276 added by section 6105 of the 1988 Act is amended— (A) by striking "(c) EXEMPTION" and inserting "(d) EXCEP- TION", (B) by striking "section 527 l(a)(2)" in paragraph (1) and inserting "section 5271", and

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