Page:United States Statutes at Large Volume 114 Part 5.djvu/678

 114 STAT. 2763A-638 PUBLIC LAW 106-554—APPENDIX G (2) tables prescribed under section 1(f) of such Code to reflect such correct amount shall apply in lieu of any tables that were prescribed based on the erroneous amount. SEC. 309. PREVENTION OF DUPLICATION OF LOSS THROUGH ASSUMP- TION OF LIABILITIES GIVING RISE TO A DEDUCTION. (a) IN GENERAL.—Section 358 (relating to basis to distributees) is amended by adding at the end the following new subsection: "(h) SPECIAL RULES FOR ASSUMPTION OF LIABILITIES TO WHICH SUBSECTION (d) DOES NOT APPLY. — "(1) IN GENERAL. —I f, after application of the other provisions of this section to an exchange or series of exchanges, the basis of property to which subsection (a)(1) applies exceeds the fair market value of such property, then such basis shall be reduced (but not below such fair market value) by the amount (determined as of the date of the exchange) of any liability— "(A) which is assumed in exchange for such property, and "(B) with respect to which subsection (d)(1) does not apply to the assumption. "(2) EXCEPTIONS. — Except as provided by the Secretary, paragraph (1) shall not apply to any liability if— "(A) the trade or business with which the liability is associated is transferred to the person assuming the liability as part of the exchange, or "(B) substantially all of the assets with which the liability is associated are trsinsferred to the person assuming the liability as part of the exchange. "(3) LIABILITY. —For purposes of this subsection, the term 'liability' shall include any fixed or contingent obligation to make payment, without regard to whether the obligation is otherwise taken into account for purposes of this title.". (b) DETERMINATION OF AMOUNT OF LIABILITY ASSUMED.—Section 357(d)(1) is amended by inserting "section 358(h)," after "section 358(d),". (c) APPLICATION OF COMPARABLE RULES TO PARTNERSHIPS AND S CORPORATIONS. —The Secretary of the Treasury or his delegate— (1) shall prescribe rules which provide appropriate adjustments under subchapter K of chapter 1 of the Internal Revenue Code of 1986 to prevent the acceleration or duplication of losses through the assumption of (or transfer of assets subject to) liabilities described in section 358(h)(3) of such Code (as added by subsection (a)) in transactions involving partnerships, and (2) may prescribe rules which provide appropriate adjustments under subchapter S of chapter 1 of such Code in transactions described in paragraph (1) involving S corporations rather than partnerships. (d) EFFECTIVE DATES. — (1) IN GENERAL.— The amendments made by this section shall apply to assumptions of liability after October 18, 1999. (2) RULES. —The rules prescribed under subsection (c) shall apply to assumptions of liability after October 18, 1999, or such later date as may be prescribed in such rules. SEC. 310. DISCLOSURE OF CERTAIN INFORMATION TO CONGRES- SIONAL BUDGET OFFICE. (a) DISCLOSURE OF CERTAIN TAX INFORMATION. —

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