Page:United States Statutes at Large Volume 90 Part 2.djvu/284

 90 STAT. 1752

PUBLIC LAW 94-455—OCT. 4, 1976

solely because the debtor of the real estate investment trust receives or accrues any amount the determination of which depends in whole or in part on the income or profits of any person, only a proportionate part (determined pursuant to regulations prescribed by the Secretary) of the amount received or accrued by the real estate investment trust from such debtor will be excluded from the term 'interest'. The provisions of this subsection shall apply only with respect to amounts received or accrued pursuant to loans made after May 27, 1976. For purposes of the preceding sentence, a loan is considered to be made before May 28, 1976, if such loan is made pursuant to a binding commitment entered into before May 28, 1976." (h) CERTAIN DIVIDENDS.—The first sentence of section 858(a) (relating to dividends paid by real estate investment trust after close of taxable year) is amended— (1) by inserting "(and specifies in dollar amounts)" after "to the extent the trust elects in such return", and (2) by striking out "paid during such taxable year" and inserting in lieu thereof "paid only during such taxable year".

26 USC 858.

(i) ADOPTION or ANNUAL ACCOUNTING PERIOD.—

(1) Part II of subchapter M of chapter 1 (relating to real estate investment trusts) is amended by adding at the end thereof the following new section: 26 USC 860.

"SEC. 860. ADOPTION OF ANNUAL ACCOUNTING PERIOD.

"For purposes of this subtitle, a real estate investment trust shall not change to or adopt any annual accounting period other than the calendar year." (2) The table of sections for such part II is amended by adding at the end thereof the following: " ' 26 USC 857.

"Sec. 860, Adoption of annual accounting period." (j) CHANGE I N DISTRIBUTION REQUIREMENTS.—Section 857(a)(1)

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'^"'^" •' Ante, p. 1745.

(relating to requirements applicable to real estate investment trusts) is amended to read as follows: "(1) the deduction for dividends paid during the taxable year (as defined in section 561, but determined without regard to capital gains dividends) equals or exceeds— "(A) the sum of— "(i) 95 percent (90 percent for taxable years beginning before January 1, 1980) of the real estate investment trust taxable income for the taxable year (determined without regard to the deduction for dividends paid (as defined in section 561) and by excluding any net capital gain); and "(ii) 95 percent (90 percent for taxable years begining before January 1, 1980) of the excess of the net income from foreclosure property over the tax imposed on such income by subsection (b)(4)(A); minus " (B) the sum of— "(i) the amount of any penalty imposed on the real estate investment trust by section 6697 which is paid by such trust during the taxable year; and " (ii) the net loss derived from prohibited transactions, and", (k) MANNER AND EFFECT OF TERMINATION OR REVOCATION OF ELECTION.—

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