Page:United States Statutes at Large Volume 118.djvu/1474

 118 STAT. 1444 PUBLIC LAW 108–357—OCT. 22, 2004 ‘‘(v)(I) the corporation, trust, or association dis poses of the assets set forth on the schedule specified in clause (ii) within 6 months after the last day of the quarter in which the corporation, trust or associa tion’s identification of the failure to satisfy the require ments of such paragraph occurred or such other time period prescribed by the Secretary and in the manner prescribed by the Secretary, or ‘‘(II) the requirements of such paragraph are other wise met within the time period specified in subclause (I). ‘‘(C) TAX.—For purposes of subparagraph (B)(iv)— ‘‘(i) TAX IMPOSED.—If a corporation, trust, or association elects the application of this subparagraph, there is hereby imposed a tax on the failure described in subparagraph (B) of such corporation, trust, or association. Such tax shall be paid by the corporation, trust, or association. ‘‘(ii) TAX COMPUTED.—The amount of the tax imposed by clause (i) shall be the greater of— ‘‘(I) $50,000, or ‘‘(II) the amount determined (pursuant to regu lations promulgated by the Secretary) by multi plying the net income generated by the assets described in the schedule specified in subpara graph (B)(ii) for the period specified in clause (iii) by the highest rate of tax specified in section 11. ‘‘(iii) PERIOD.—For purposes of clause (ii)(II), the period described in this clause is the period beginning on the first date that the failure to satisfy the require ments of such paragraph (4) occurs as a result of the ownership of such assets and ending on the earlier of the date on which the trust disposes of such assets or the end of the first quarter when there is no longer a failure to satisfy such paragraph (4). ‘‘(iv) ADMINISTRATIVE PROVISIONS.—For purposes of subtitle F, the taxes imposed by this subparagraph shall be treated as excise taxes with respect to which the deficiency procedures of such subtitle apply.’’. (2) MODIFICATION OF RULES OF APPLICATION FOR FAILURE TO SATISFY SECTIONS 856(c)(2) OR 856(c)(3).—Paragraph (6) of section 856(c) (relating to definition of real estate investment trust) is amended by striking subparagraphs (A) and (B), by redesignating subparagraph (C) as subparagraph (B), and by inserting before subparagraph (B) (as so redesignated) the fol lowing new subparagraph: ‘‘(A) following the corporation, trust, or association’s identification of the failure to meet the requirements of paragraph (2) or (3), or of both such paragraphs, for any taxable year, a description of each item of its gross income described in such paragraphs is set forth in a schedule for such taxable year filed in accordance with regulations prescribed by the Secretary, and’’. (3) REASONABLE CAUSE EXCEPTION TO LOSS OF REIT STATUS IF FAILURE TO SATISFY REQUIREMENTS.—Subsection (g) of section 856 (relating to termination of election) is amended—

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