Page:United States Statutes at Large Volume 113 Part 1.djvu/207

 PUBLIC LAW 106-36-JUNE 25, 1999 113 STAT. 183 "(A) gain is recognized to the transferor as a result of an assumption of a nonrecourse liability by a transferee which is also secured by assets not transferred to such transferee; and "(B) no person is subject to tax under this title on such gain, then, for purposes of determining basis under subsections (a) and (b), the amount of gain recognized by the transferor as a result of the assumption of the liability shall be determined as if the liability assumed by the transferee equaled such transferee's ratable portion of such liability determined on the basis of the relative fair market values (determined without regard to section 7701(g)) of all of the assets subject to such liabihty. ". (c) APPLICATION TO PROVISIONS OTHER THAN SUBCHAPTER C.— (1) SECTION 584.— Section 584(h)(3) of the Internal Revenue Code of 1986 is amended— 26 USC 584. (A) by striking ", and the fact that any property transferred by the common trust fund is subject to a liability," in subparagraph (A); and (B) by striking clause (ii) of subparagraph (B) and inserting: "(ii) ASSUMED LIABILITIES.— For purposes of clause (i), the term 'assumed liabilities' means any liability of the common trust fund assumed by any regulated investment company in connection with the transfer referred to in paragraph (1)(A). " (C) ASSUMPTION. —For purposes of this paragraph, in determining the amount of any liability assumed, the rules of section 357(d) shall apply.". (2) SECTION IO31.—The last sentence of section 1031(d) of such Code is amended— 26 USC 1031. (A) by striking "assumed a liability of the taxpayer or acquired from the taxpayer property subject to a liability" and inserting "assumed (as determined under section 357(d)) a liability of the taxpayer"; and (B) by striking "or acquisition (in the amount of the liability)". (d) CONFORMING AMENDMENTS.— (1) Section 351(h)(1) of the Internal Revenue Code of 1986 26 USC 351. is amended by striking ", or acquires property subject to a liability,". (2) Section 357 of such Code is amended by striking "or 26 USC 357. acquisition" each place it appears in subsection (a) or (b). (3) Section 357(b)(1) of such Code is amended by striking "or acquired". (4) Section 357(c)(1) of such Code is amended by striking ", plus the amount of the liabilities to which the property is subject,".

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