Page:United States Statutes at Large Volume 90 Part 2.djvu/456

 90 STAT. 1924

PUBLIC LAW 94-455—OCT. 4, 1976

26 USC 721.

(b) PARTNERSHIPS.—Section 721 (relating to nonrecognition of gain or loss on transfers to partnerships) is amended to read as follows: "SEC. 721. NONRECOGNITION OF GAIN OR LOSS ON CONTRIBUTION. " (a) GENERAL RULE. — N o gain or loss shall be recognized to a partnership or to any of its part n e r s in the case of a contribution of property to the partnership m exchange for an interest in the partnership. " (b) SPECIAL RULE.—Subsection (a) shall not apply to gain realized on a transfer of property to a partnership which would be treated as a n investment company (within the meaning of section 351) if the partnership were incorporated."

^^ u s e 722,

(c) CONFORMING AMENDMENT.—Sections 722 and 723 ( r e l a t i n g to

tax basis) are each amended by striking out "contribution." and inserting in lieu thereof "contribution increased by the amount (if any) of gain recognized to the contributing part n e r at such time." 26 USC 584.

((J) COMMON TRUST FUNDS.—Subsection (e) of section 584 ( r e l a t i n g

to admission to and withdrawal from a common t r u s t fund) is amended by inserting after the first sentence the following new sentence: " The admission of a participant shall be treated with respect to the participant as the purchase of, or an exchange for, the participating interest." 26 USC 683

^^^ TRUSTS.

•

(1) IN GENERAL.—Section 683 (relating to applicability of provisions) is amended to read as follows;

"SEC. 683. USE OF TRUST AS AN EXCHANGE FUND.

X

" (a) GENERAL RULE. — E x c e p t as provided in subsection (b), if property is transferred to a trust in exchange for an interest in other trust property and if the trust would be an investment company (within the meaning of section 351) if it were a corporation, then gain shall be recognized to the transferor. "(b)

EXCEPTION FOR POOLED INCOME FUNDS.—Subsection (a) shall

not apply to any transfer to a pooled income fund (within the meaning of section 642(c)(5)). " (2) CONFORMING AMENDMENT.—The table of sections for subpart F of part I of subchapter J of chapter 1 is amended by striking out the item relating to section 683 and inserting in lieu thereof the following: "Sec. 683. Use of trust as an exchange fund." (f) EFFECTIVE D A T E S. —

26 USC 368 note.

26 USC 721 note.

(1) Except as provided in paragraph (2), the amendment made by subsection (a) shall apply to transfers made after February 17, 1976, in taxable years ending after such date. (2) The amendment made by subsection (a) shall not apply to transfers made in accordance with a r u l i n g issued by the I n t e r n a l Revenue Service before February 18, 1976, holding that a proposed transaction would be a reorganization described in paragraph (1) of section 368(a) of the I n t e r n a l Revenue Code of 1954. (3) Except as provided in paragraph (4), the amendments made by subsections (b) and (c) shall apply to transfers made after February 17, 1976, in taxable years ending after such date. (4) The amendments made by subsections (b) and (c) shall not apply to transfers to a partnership made on or before the 90th day after the date of the enactment of this Act if— (A) either—

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