Page:United States Statutes at Large Volume 118.djvu/1519

 118 STAT. 1489 PUBLIC LAW 108–357—OCT. 22, 2004 of the preceding sentence, the term ‘affiliated group’ has the meaning given such term by section 1504 (determined without regard to paragraph (4) of section 1504(b)). ‘‘(3) TREATMENT OF TAX EXEMPT ASSETS; BASIS OF STOCK IN NONAFFILIATED 10 PERCENT OWNED CORPORATIONS.—The rules of paragraphs (3) and (4) of subsection (e) shall apply for purposes of this subsection, except that paragraph (4) shall be applied on a worldwide affiliated group basis. ‘‘(4) TREATMENT OF CERTAIN FINANCIAL INSTITUTIONS.— ‘‘(A) IN GENERAL.—For purposes of paragraph (1), any corporation described in subparagraph (B) shall be treated as an includible corporation for purposes of section 1504 only for purposes of applying this subsection separately to corporations so described. ‘‘(B) DESCRIPTION.—A corporation is described in this subparagraph if— ‘‘(i) such corporation is a financial institution described in section 581 or 591, ‘‘(ii) the business of such financial institution is predominantly with persons other than related persons (within the meaning of subsection (d)(4)) or their cus tomers, and ‘‘(iii) such financial institution is required by State or Federal law to be operated separately from any other entity which is not such an institution. ‘‘(C) TREATMENT OF BANK AND FINANCIAL HOLDING COMPANIES.—To the extent provided in regulations— ‘‘(i) a bank holding company (within the meaning of section 2(a) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(a)), ‘‘(ii) a financial holding company (within the meaning of section 2(p) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(p)), and ‘‘(iii) any subsidiary of a financial institution described in section 581 or 591, or of any such bank or financial holding company, if such subsidiary is predominantly engaged (directly or indirectly) in the active conduct of a banking, financing, or similar busi ness, shall be treated as a corporation described in subparagraph (B). ‘‘(5) ELECTION TO EXPAND FINANCIAL INSTITUTION GROUP OF WORLDWIDE GROUP.— ‘‘(A) IN GENERAL.—If a worldwide affiliated group elects the application of this subsection, all financial corporations which— ‘‘(i) are members of such worldwide affiliated group, but ‘‘(ii) are not corporations described in paragraph (4)(B), shall be treated as described in paragraph (4)(B) for pur poses of applying paragraph (4)(A). This subsection (other than this paragraph) shall apply to any such group in the same manner as this subsection (other than this para graph) applies to the pre election worldwide affiliated group of which such group is a part. Applicability. Applicability.

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