Page:United States Statutes at Large Volume 83.djvu/636

 608

PUBLIC LAW 91-172-DEC. 30, 1969

[83 STAT

paid or incurred by any corporation (other than the issuing; corporation determined without regard to this subsection) shall be included in the determinations required under subparagraphs (A) and (B) of subsection (b)(4) as of any day only if such corporation is a member of the affiliated group on such day, and, in determining projected earnings of such corporation under subsection (c)(3), there shall be taken mto account only the earnings and profits of such corporation for the period during which it was a member of the affiliated group For purposes of the preceding sentence, the term 'affiliated group' has 68A Stat. 369. the meaning assigned to such term by section 1504(a), except that all 26 USC 1504. corporations other than the acquired corporation shall be treated as includible corporations (without any exclusion under section 1504(b)) and the acquired corporation shall not be treated as an includible corporation. " (h) CHANGES I N OBLIGATION.—For purposes of this section— "(1) Any extension, renewal, or refinancing of an obligation evidencing a preexisting indebtedness shall not be deemed to be the issuance of a new obligation. "(2) Any obligation which is corporate acquisition indebtedness of the issuing corporation is also corporate acquisition indebtedness of any corporation which becomes liable for such obligation as guarantor, endorser, or indemnitor or which assumes liability for such obligation in any transaction. " (i) CERTAIN OBLIGATIONS ISSUED AFTER OCTOBER 9, 1969.—For purposes of this section, an obligation shall not be corporate acquisition indebtedness if issued after October 9, 1969, to provide consideration for the acquisition of— "(1) stock or assets pursuant to a binding written contract. which was in effect on October 9, 1969, and at all times thereafter before such acquisition, or " (2) stock in any corporation where the issuing corporation, on October 9, 1969, and at all times thereafter before such acquisition, owned at least 50 percent of the total combined voting power of all classes of stock entitled to vote of the acquired corporation. Paragraph (2) shall cease to apply when (at any time on or after October 9, 1969) the issuing corporation has acquired control (as 26 USC 368. defined in section 368(c)) of the acquired corporation. " (j) EFFECT ON OTHER PROVISIONS.—No inference shall be drawn from any provision in this section that any instrument designated as a bond, debenture, note, or certificate or other evidence of indebtedness by its issuer represents an obligation or indebtedness of such issuer in applying any other provision 01 this title." (b) CLERICAL AMENDMENT.—The table of sections for part IX of subchapter B of chapter 1 is amended by adding at the end thereof the following new item: "Sec. 279. Interest on indebtedness incurred by corporation to acquire stock or assets of another corporation." (c) EFFECTIVE DATE.—The amendments made by this section shall apply to the determination of the allowability of the deduction of interest paid or incurred with respect to indebtedness incurred aft«r October 9,196». •' SEC. 412. INSTALLMENT METHOD. 26 USC 453.

(a)

CERTAIN EVIDENCES OF INDEBTEDNESS DEEMED To

B E PAY-

MENT.—Section 453(b) (relating to sales of realty and casual sales of personalty) is amended by adding at the end thereof the following new paragraph: " (3) PURCHASER EVIDENCES OF INDEBTEDNESS PAYABLE ON DEMAND OR READILY TRADABLE.—In applying this subsection, a bond or other

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