Page:United States Statutes at Large Volume 83.djvu/651

 83 STAT. ]

PUBLIC LAW 91-172-DEC. 30, 1969

623

"(vii) loans secured by an interest in educational, health, or welfare institutions or facilities, including structures designed or used primarily for residential purposes for students, residents, and persons under care, employees, or members of the staff of such institutions or facilities, "(viii) property acquired through the li(juidation of defaulted loans described in clause (v), (vi), or (vii), " (ix) loans made for the payment of expenses of college or university education or vocational training, in accordance with such regulations as may be prescribed by the Secretary or his delegate, and " (x) property used by the association in the conduct of the business described in subparagraph (B). At the election of the taxpayer, the percentage specified in this subparagraph shall be applied on the basis of the average assets outstanding during the taxable year, in lieu of the close of the taxable year, computed under regulations prescribed by the Secretary or his delegate. For purposes of clause (v), if a multifamily structure securing a loan is used in part for nonresidential purposes, the entire loan is deemed a residential real property loan if the planned residential use exceeds 80 percent of the property's planned use (determined as of the time the loan is made). For purposes of clause (v), loans made to finance the acquisition or development of land shall be deemed to be loans secured by an interest in residential real property if, under regulations prescribed by the Secretary or his delegate, there is reasonable assurance that the property will become residential real property within a period of 3 years from the date of acquisition of such land; but this sentence shall not apply for any taxable year unless, within such 3-year period, such land becomes residential real property."

.,

(d) CONFORMING AMENDMENTS.—Section 7701(a) (32)

(defining

26 USC 7701"

cooperative bank) is amended— (1) by striking out subparagraph (B) and inserting in lieu thereof the following: " (B) meets the requirements of subparagraphs (B) and (C) of paragraph (19) of this subsection (relating to definition of domestic building and loan association).", and (2) by striking out the third sentence thereof. (e) EFFECTIVE DATE.—The amendments made by this section shall be effective for taxable years beginning after July 11, 1969. SEC. 433. TREATMENT OF BONDS, ETC., HELD BY FINANCTAL INSTITUTIONS. (a) GAIN ON SECURITIES H E U) BY FINANCIAL INSTITUTIONS.—Sub-

section (c) of section 682 (relating to bad debt and loss deduction with respect to securities held by banks) is amended by striking out such subsection and inserting the following in lieu thereof: "(c)

26'urc'582°^' "..

BOND, ETC., LOSSES AND GAINS OF FINANCIAL INSTITUTIONS.— "(1) GENERAL RULE.—For purposes of this subtitle, in the case

of a financial institution to which section 585, 586, or 593 applies, ^2^"'^' ^P- ^^^' the sale or exchange of a bond, debenture, note, or certificate or other evidence of indebtedness shall not be considered a sale or exchange of a capital asset. "(2) TRANSTTIONAL RULE FOR BANKS.—In the case of a bank, if the net long-term capital gains of the taxable year from sales or ilM*

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