Page:United States Statutes at Large Volume 107 Part 1.djvu/449

 PUBLIC LAW 103-66 —AUG. 10, 1993 107 STAT. 423 "(B) except as provided in subsections (f) and (h), such stock is acQuired by the taxpayer at its original issue (directly or through an underwriter)— "(i) in exchange for money or other property (not including stock), or "(ii) as compensation for services provided to such corporation (other than services performed as an underwriter of such stock). "(2) ACTIVE BUSINESS REQUIREMENT; ETC. — "(A) IN GENERAL.— Stock in a corporation shall not be treated as qualified small business stock unless, during substantially £ul of the taxpayer's holding period for such stock, such corporation meets the active business requirements of subsection (e) and such corporation is a C corporation. "(B) SPECIAL RULE FOR CERTAIN SMALL BUSINESS INVESTMENT COMPANIES. — "(i) WAIVER OF ACTIVE BUSINESS REQUIREMENT. — Notwithstanding any provision of subsection (e), a corporation shall be treated as meeting the active business requirements of such subsection for any period during wMch such corporation qualifies as a specialized small business investment company. "(ii) SPECIALIZED SMALL BUSINESS INVESTMENT COMPANY. —For purposes of clause (i), the term 'specialized small business investment compan/ means any eli^ble corporation (as defined in subsection (e)(4)) which is licensed to operate under section 301(d) of the Small Business Investment Act of 1958 (as in effect on May 13, 1993). "(3) CERTAIN PURCHASES BY CORPORATION OF ITS OWN STOCK.— SON. —Stock acquired b^ the taxpa>rer shall not be treated as qualified small busmess stock if, at any time during the 4-year period beginning on the date 2 ^ears before the issuance of such stock, the corporation issuing such stock purchased (directly or indirectly) any of its stock from the taxpayer or fiiom a person related (within the meaning of section 267(b) or 707(b)) to the taxpayer. "(B) SIGNIFICANT REDEMPTIONS. —Stock issued by a corporation shall not be treated as qualified business stock if, during the 2-year period beginning on the date 1 year before the issuance or such stoK:k, such corporation made 1 or more purchases of its stock with an aggregate value (as of the time of the respective purchases) exceeding 5 percent of the aggregate value of all of its stock as of the beginning of such 2-year period. "(C) TREATMENT OF CERTAIN TRANSACTIONS. —If any transaction is treated under section 304(a) as a distribution in redemption of the stock of any corporation, for purposes of subparagraphs (A) and (B), such corporation shall be treated as purchasing an amount of its stock equal to the amount treated as such a distribution under section 304(a). "(d) QUALIFIED SMALL BUSINESS.— For purposes of this section— 69-194O-94-15:QL.3Part1
 * (A) REDEMPTIONS FROM TAXPAYER OR RELATED PER-

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