Page:United States Statutes at Large Volume 113 Part 3.djvu/429

 PUBLIC LAW 106-170—DEC. 17, 1999 113 STAT. 1947 (iii) securities received by such trust (or a successor) in exchange for, or with respect to, securities described in clause (i) or (ii) in a transaction in which gain or loss is not recognized; and (iv) securities acquired directly or indirectly by such trust as part of a reorganization (as defined in section 368(a)(1) of the Internal Revenue Code of 1986) with respect to such trust if such securities are described in clause (i), (ii), or (iii) with respect to any other real estate investment trust. (B) NEW TRADE OR BUSINESS OR SUBSTANTIAL NEW ASSETS.— Subparagraph (A) shall cease to apply to securities of a corporation as of the first day after July 12, 1999, on which such corporation engages in a substantial new line of business, or acquires Einy substantial asset, other than— (i) pursuant to a binding contract in effect on such date and at all times thereafter before the acquisition of such asset; (ii) in a transaction in which gain or loss is not recognized by reason of section 1031 or 1033 of the Internal Revenue Code of 1986; or (iii) in a reorganization (as so defined) with another corporation the securities of wjtiich are described in paragraph (1)(A) of this subsection. (C) LIMITATION ON TRANSITION RULES.— Subparagraph (A) shall cease to apply to securities of a corporation held, acquired, or received, directly or indirectly, by a real estate investment trust as of the first day after July 12, 1999, on which such trust acquires any additional securities of such corporation other than— (i) pursuant to a binding contract in effect on July 12, 1999, and at all times thereafter; or (ii) in a reorganization (as so defined) with another corporation the securities of which are described in paragraph (1)(A) of this subsection. (2) TAX-FREE CONVERSION. — If— (A) at the time of an election for a corporation to become a taxable REIT subsidiary, the amendment made by section 541 does not apply to suchi corporation by reason of paragraph (1); and (B) such election first takes effect before January 1, 2004, such election shall be treated as a reorganization qualifying under section 368(a)(1)(A) of such Code. SEC. 547. STUDY RELATING TO TAXABLE REIT SUBSIDLARIES. 26 USC 856 note. The Secretary of the Treasury shall conduct a study to determine how many taxable REIT subsidiaries are in existence and the aggregate amount of tsixes paid by such subsidiaries. The Secretary shall submit a report to the Congress describing the results of such study.

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