Page:United States Statutes at Large Volume 111 Part 1.djvu/1064

 Ill STAT. 1040 PUBLIC LAW 105-34—AUG. 5, 1997 of the Internal Revenue Code of 1986 if the trust instrument requires that all trustees of the trust be individual citizens of the United States or domestic corporations. (b) EFFECTIVE DATE.—The provisions of subsection (a) shall take effect as if included in the provisions of section 11702(g) of the Revenue Reconciliation Act of 1990. SEC. 1304. TREATMENT FOR ESTATE TAX PURPOSES OF SHORT-TERM OBLIGATIONS HELD BY NONRESIDENT ALIENS. (a) IN GENERAL.— Subsection (b) of section 2105 is amended by striking "and" at the end of paragraph (2), by striking the period at the end of paragraph (3) and inserting ", and", and by inserting after paragraph (3) the following new paragraph: "(4) obligations which would be original issue discount obligations as defined in section 871(g)(1) but for subparagraph (B)(i) thereof, if any interest thereon (were such interest received by the decedent at the time of his death) would not be effectively connected with the conduct of a trade or business within the United States.". 26 USC 2105 (b) EFFECTIVE DATE. —The amendment made by this section note. shall apply to estates of decedents dying after the date of the enactment of this Act. SEC. 1305. CERTAIN REVOCABLE TRUSTS TREATED AS PART OF ESTATE. (a) IN GENERAL. — Subpart A of part I of subchapter J (relating to estates, trusts, beneficiaries, and decedents) is amended by adding at the end the following new section: "SEC. 646. CERTAIN REVOCABLE TRUSTS TREATED AS PART OF ESTATE. "(a) GENERAL RULE. —For purposes of this subtitle, if both the executor (if any) of an estate and the trustee of a qualified revocable trust elect the treatment provided in this section, such trust shall be treated and taxed as part of such estate (and not as a separate trust) for all taxable years of the estate ending after the date of the decedent's death and before the applicable date. "(b) DEFINITIONS.— For purposes of subsection (a)— "(1) QUALIFIED REVOCABLE TRUST.— The term 'qualified revocable trust' means any trust (or portion thereof) which was treated under section 676 as owned by the decedent of the estate referred to in subsection (a) by reason of a power in the grantor (determined without regard to section 672(e)). "(2) APPLICABLE DATE.— The term 'applicable date' means— "(A) if no return of tax imposed by chapter 11 is required to be filed, the date which is 2 years after the date of the decedent's death, and "(B) if such a return is required to be filed, the date which is 6 months after the date of the final determination of the liability for tax imposed by chapter 11. "(c) ELECTION. —The election under subsection (a) shall be made not later than the time prescribed for filing the return of tax imposed by this chapter for the first taxable year of the estate (determined with regard to extensions) and, once made, shall be irrevocable.". (b) COMPARABLE TREATMENT UNDER GENERATION-SKIPPING TAX. — Paragraph (1) of section 2652(b) is amended by adding at

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