Page:United States Statutes at Large Volume 122.djvu/1526

 12 2 STA T . 1 503PUBLIC LA W 110 – 23 4—M A Y 22, 200 8‘ ‘ (B)inthecas e of the ta x a bl e y ea r incl ud in g the date w hich is 1 year after such date of enact m ent , the p ortion of the year on or before such later date .’ ’. (b) MIN I MU M TAX . —S ubsection (b) of section 5 5 is amended by adding at the end the following paragraph

‘‘( 4 ) MAXIMUM R A TEOF TAX ON Q UA L IFIE D TIM B ER G AIN OF C OR P ORATION S .— I n the case of any taxable year to which section 1 20 1(b) applies, the amount determined under clause (i) of subparagraph (B) shall not exceed the sum of— ‘‘( A ) 20 percent of so much of the taxable excess (if any) as exceeds the q ualified timber gain (or, if less, the net capital gain), plus ‘‘(B) 15 percent of the taxable excess in excess of the amount on which a tax is determined under subparagraph (A). Any term used in this paragraph which is also used in section 1201 shall ha v e the meaning given such term by such section, except to the extent such term is sub j ect to adjustment under this part.’’. (c) C ONFORMING AMENDMENT.—Section 8 5 7 (b)( 3 )(A)(ii) is amended by stri k ing ‘‘rate’’ and inserting ‘‘rates’’. (d) E FFECTI V E D ATE.—The amendments made by this section shall apply to taxable years ending after the date of enactment. SEC.153 1 2 . TIMB E R REIT M OD ER N I ZA TION. (a) IN G ENERAL.—Section 85 6 (c)(5) is amended by adding after subparagraph (G) the following new subparagraph: ‘‘( H ) TREATMENT OF TIMBER GAINS.— ‘‘(i) IN GENERAL.—Gain from the sale of real prop - erty described in paragraph (2)(D) and (3)(C) shall include gain which is— ‘‘(I) recogni z ed by an election under section 631(a) from timber owned by the real estate invest- ment trust, the cutting of which is provided by a taxable R EIT subsidiary of the real estate invest- ment trust ‘‘(II) recognized under section 631(b); or ‘‘(III) income which would constitute gain under subclause (I) or (II) but for the failure to meet the 1-year holding period requirement. ‘‘(ii) SPECIAL RULES.— ‘‘(I) F or purposes of this subtitle, cut timber, the gain from which is recognized by a real estate investment trust pursuant to an election under section 631(a) described in clause (i)(I) or so much of clause (i)(III) as relates to clause (i)(I), shall be deemed to be sold to the taxable REIT sub- sidiary of the real estate investment trust on the first day of the taxable year. ‘‘(II) For purposes of this subtitle, income described in this subparagraph shall not be treated as gain from the sale of property described in section 1221(a)(1). ‘‘(iii) TERMINATION.—This subparagraph shall not apply to dispositions after the termination date.’’. (b) TERMINATION DATE.—Subsection (c) of section 856 is amended by adding at the end the following new paragraph: 26USC5 5 note. 26 USC 55.

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