Page:United States Statutes at Large Volume 92 Part 1.djvu/536

 92 STAT. 482 26 USC 1236. 26 USC 1058.

PUBLIC LAW 95-345—AUG. 15, 1978 defined in section 1236(c)) transferred by the owner to another person in a transaction to which section 1058 applies (whether or not title to the security remains in the name of the lender) including— " (i) amounts in respect of dividends, interest, or other distributions, " ( i i) fees computed by reference to the period beginning with the transfer of securities by the owner and ending with the transfer of identical securities back to the transferor by the transferee and the fair market value of the security during such period, " ( i i i) income from collateral security for such loan, and " (iv) income from the investment of collateral security. " (B) Subparagraph (A) shall apply only with respect to securities transferred pursuant to an agreement between the transferor and the transferee which provides for— " (i) reasonable procedures to implement the obligation of the transferee to furnish to the transferor, for each business d a y during such period, collateral with a fair market value not less than the fair market value of the security at the close of business on the preceding business day, " ( i i) termination of the loan by the transferor upon notice of not more than 5 business days, and " ( i i i) return to the transferor of securities identical to the transferred securities upon termination of the loan.". (c) TREATMENT FOR PURPOSES OF SECTION 514.—Subsection (c) of

26 USC 514.

section 514 of such Code (relating to unrelated debt-financed income) is amended by adding at the end thereof the following new paragraph: "(8)

Ante, V. 481.

SECURITIES SUBJECT TO LOANS.—For

26 USC 1236.

of

this

section— " (A) payments with respect to securities loans (as defined in section 5 1 2 (a)(5)) shall be deemed to be derived i r ^ m the securities loaned and not from collateral security o r the investment of collateral security from such loans, " (B) any deductions which are directly connected with collateral security for such loan, or with the investment of collateral security, shall be deemed to be deductions which are directly connected with the securities loaned, and " (C) an obligation to return collateral security shall not be treated as acquisition indebtedness (as defined in paragraph (1)).". (d) TREATMENT SECURITIES.—

26 USC 1051 et 26 USC 1059. 26 USC 1058.

purposes

OF G A I N

OR LOSS

ON CERTAIN

LOANS OF

(1) NoNRECOGNiTioN OF GAIN OR LOSS.—Part IV of Subchapter Q of chapter 1 of such Code (relating to special rules) is amended by redesignating section 1058 as 1059 and by inserting after section 1057 the following new section: «SEC. 1058. TRANSFERS OP SECURITIES UNDER CERTAIN AGREEMENTS. " (a) GENERAL RULE. — I n the case of a taxpayer who transfers securities (as defined in section 1236(c)) pursuant to an agreement which meets the requirements of subsection (b), no gain or loss shall be recognized on the exchange of such securities by the taxpayer for an obligation under such agreement, or on the exchange of rights

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