Page:United States Statutes at Large Volume 90 Part 2.djvu/288

 90 STAT, 1756

PUBLIC LAW 94-455—OCT. 4, 1976 A net operating loss shall not be carried back to a taxable year for which part II of subchapter M applied to the taxpayer."

26 USC 856. (c)

26 USC 172.

DETERMINATION or THE AMOUNT OF THE NET OPERATING LOSS

AND THE CARRYOVER.—Section 172(d) (relating to modifications in computing net operating loss) is amended by adding a new paragraph (7) at the end thereof, to read as follows: " (7) In the case of any taxable year for which part II of subchapter M (relating to real estate investment trusts) applies to the taxpayer— "(A) the net operating loss for such taxable year shall be computed by taking into account the adjustments described in section 857(b)(2) (other than the deduction for dividends paid described in section 857(b)(2)(B)); and "(B) where such taxable year is a 'prior taxable year' referred to in paragraph (2) of subsection (b), the term 'taxable income' in such paragraph shall mean 'real estate investment trust taxable income' (as defined in section 857 (b)(2))." (d) CONFORMING AMENDMENT.—Subparagraph (B) of section 857

26 USC 857.

26 USC 857.

(b)(2) (relating to real estate investment trust taxable income), as redesignated by section 1607(b) of this Act, is amended by striking out "subparagraph (F) " and inserting in lieu thereof "subparagraph (D)". SEC. 1607. ALTERNATIVE TAX IN CASE OF CAPITAL GAINS. (a) ALTERNATIVE TAX.—Section 857(b)(3)(A) (relating to imposition of tax on capital gain) is amended to read as follows: "(A)

ALTERNATIVE TAX IN CASE OF CAPITAL GAINS.—If for

any taxable year a real estate investment trust has a net capital gain, then, in lieu of the tax imposed by subsection (b)(1), there is hereby imposed a tax (if such tax is less than the tax imposed by such subsection) which shall consist of the sum of— " (i) a tax, computed as provided in subsection (b)(1), on the real estate investment trust taxable income (determined by excluding such net capital gain and by computing the deduction for dividends paid without regard to capital gain dividends), and " (ii) a tax of 30 percent of the excess of the net capital gain over the deduction for dividends paid (as defined in section 561) determined with reference to capital gains dividends only." (b)

26 USC 46.

CONFORMING AMENDMENTS.—

(1)(A) Section 857(b)(2) (relating to method of taxation of real estate investment trust taxable income) is amended by deleting subparagraph (A) and redesignating subparagraphs (B), (C), and (D) as subparagraphs (A), (B), and (C), respectively. (B) Subsection (e)(2) of section 46 (relating to investment credit) is amended— (i) by striking out "857(b)(2)(C) " in subparagraph (B) and inserting in lieu thereof "857(b)(2)(B)", and (ii) by inserting "determined without regard to any deduction for capital gains dividends (as defined in section 857(b)(3)(C)) and by excluding any net capital gain" immediately before the period at the end of the last sentence thereof.

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