Page:United States Statutes at Large Volume 112 Part 1.djvu/829

 PUBLIC LAW 105-206-^ULY 22, 1998 112 STAT. 803 Rules similar to the rules of section 751 shall apply for Applicability. purposes of the preceding sentence. "(7) UNRECAPTURED SECTION 1250 GAIN. —For purposes of this subsection— "(A) IN GENERAL.— The term 'unrecaptured section 1250 gain' means the excess (if any) of— "(i) the amount of long-term capital gain (not otherwise treated as ordinary income) which would be treated as ordinary income if— "(I) section 1250(b)(1) included all depreciation and the applicable percentage under section 1250(a) were 100 percent, and "(II) only gain from property held for more than 18 months were taken into account, over "(ii) the excess (if any) of— "(I) the amount described in paragraph (5)(A)(ii), over "(II) the amount described in paragraph (5)(A)(i). " (B) LIMITATION WITH RESPECT TO SECTION 1231 PROP- ERTY.— The amount described in subparagraph (A)(i) from sales, exchanges, and conversions described in section 1231(a)(3)(A) for any taxable year shall not exceed the net section 1231 gain (as defined in section 1231(c)(3)) for such year. "(8) SECTION 1202 GAIN.— For purposes of this subsection, the term 'section 1202 gain' means an amount equal to the gain excluded from gross income under section 1202(a). "(9) QUALIFIED 5-YEAR GAIN.— For purposes of this subsection, the term 'qualified 5-year gain' means the aggregate long-term capital gain from property held for more than 5 years. The determination under the preceding sentence shall be made without regard to collectibles gain, gain described in paragraph (7)(A)(i), and section 1202 gain. " (10) COORDINATION WITH RECAPTURE OF NET ORDINARY LOSSES UNDER SECTION 1231.— I f any amount is treated as ordinary income under section 1231(c), such amount shall be allocated among the separate categories of net section 1231 gain (as defined in section 1231(c)(3)) in such manner as the Secretary may by forms or regulations prescribe. "(11) REGULATIONS. — The Secretary may prescribe such regulations as are appropriate (including regulations requiring reporting) to apply this subsection in the case of sales and exchanges by pass-thru entities and of interests in such entities. "(12) PASS-THRU ENTITY DEFINED.— For purposes of this subsection, the term 'pass-thru entity* means— "(A) a regulated investment company; "(B) a real estate investment trust; "(C) an S corporation; "(D) a partnership; "(E) an estate or trust; "(F) a common trust fund; "(G) a foreign investment company which is described in section 1246(b)(1) and for which an election is in effect under section 1247; and "(H) a qualified electing fund (as defined in section 1295).

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