Page:United States Statutes at Large Volume 104 Part 2.djvu/934

 104 STAT. 1388-526 PUBLIC LAW 101-508 —NOV. 5, 1990 (I) by striking paragraph (2) and inserting the following: "(2) SPECIAL RULE FOR SECTION 423 OPTIONS. — In the case of the transfer of stock pursuant to the exercise of an option to which section 423 applies and which has been so modified, extended, or renewed, the fair market value of such stock at the time of the granting of the option shall be considered as whichever of the following is the highest— "(A) the fair market value of such stock on the date of the original granting of the option, "(B) the fair market value of such stock on the date of the making of such modification, extension, or renewal, or "(C) the fair market value of such stock at the time of the making of any intervening modification, extension, or renewal. ' (II) by striking "sections 422(b)(6), 423(b)(9), and 424(b)(2)" in paragraph (3)(B) and inserting "section 423(b)(9)", and (III) by striking the sentence following paragraph (3)(C). (G) Paragraph (3) of section 56(b) is amended— (i) by striking "section 422A" and inserting "section 422", and (ii) by striking "section 422A(c)(2)" and inserting "section 422(c)(2)'° (H) Clause (ii) of section 1042(c)(2)(B) is amended by striking "section 83, 422, 422A, 423, or 424 applies" and inserting "section 83, 422, or 423 applied (or to which section 422 or 424 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) applied)". (I)(i) Subparagraph (B) of section 402(a)(3) is amended by striking "section 425" and inserting "section 424". (ii) Clause (i) of section 402(a)(6)(B) is amended by striking "section 425(f)" and inserting "section 424(f)". (J) Section 6039 is amended— (i) by striking paragraphs (1) and (2) of subsection (a) and inserting the following: "(1) which in any calendar year transfers a share of stock pursuant to such person's exercise of an incentive stock option, or "(2) which in any calendar year records (or has by its agent recorded) a transfer of the legal title of a share of stock acquired by the transferor pursuant to his exercise of an option described in section 423(c) (relating to special rule where option price is between 85 percent and 100 percent of value of stock),", (ii) by striking a qualified stock option, incentive stock option, a restricted stock option, or an" in subsection (b)(1) and inserting "an incentive stock option or an", and (iii) by amending subsection (c) to read as follows: " (c) CROSS REFERENCES. — "For definition of— "(1) the term 'incentive stock option', see section 422(b), and "(2) the term 'employee stock purchase plan' see section 423(b)." (10) AMENDMENTS RELATING TO REPEAL OF SECTION 545(C). — (A) Paragraph (15) of section 381(c) is hereby repealed.

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