Page:United States Statutes at Large Volume 92 Part 3.djvu/286

 92 STAT. 2918

PUBLIC LAW 95-600—NOV. 6, 1978 not be treated as income described in subparagraph (A) or (B) of subsection (a)(1). "(B) EXCEPTION FOR POSSESSIONS CORPORATIONS, ETC.—For

26 USC 931, 957.

26 USC 936 note, 26 USC 936. 26 USC 995

note-

26 USC 995.

26 USC 995 note. 26 USE 1248.

26 USC 751.

purposes of subparagraph (A), the holding of any asset by another person shall not be taken into account if throughout the period for which such asset was held by such person section 931, this section, or section 957(c) applied to such person.", (ii) The heading of such subsection (d) is amended to read as follows: "(d) DEFINITIONS AND SPECIAL RULES.—". (C) EFFECTIVE DATE.—The amendments made by this para-

graph shall apply as if included in section 936 of the Internal Revenue Code of 1954 at the time of its addition by section 1051(b) of the Tax Reform Act of 1976. (12) GAIN ON DISPOSITION OF STOCK IN A DISC.— (A) DELAY IN EFFECTIVE DATE.—Paragraph (4) of section

1101(g) of the Tax Reform Act of 1976 (relating to effective date for amendment relating to gain or disposition of DISC stock) is amended by striking out "December 31, 1975" and inserting in lieu thereof "December 31, 1976". (B) TECHNICAL AMENDMENT.—Paragraph (1) of section 995(c) (relating to gain on disposition of stock in a DISC) is amended by adding at the end thereof the following new sentence: "Subparagraph (C) shall not apply if the person receiving the stock in the disposition has a holding period for the stock which includes the period for which the stock was held by the shareholder disposing of such stock." (C) EFFECTIVE DATE.—The amendment made by subparagraph (B) shall apply to dispositions made after December 31, 1976, in taxable years ending after such date. (13) LIMITATION ON PARTNER'S TAX WHERE PARTNER RECEIVES AMOUNT TREATED AS SALE OF SECTION 1248 STOCK.—

(A) IN GENERAL.—Section 751 (relating to unrealized receivables and inventory items) is amended by adding at the end thereof the following new subsection: "(e) LIMITATION ON TAX ATTRIBUTABLE TO DEEMED SALES OF SEC-

26 USC 1248. 26 USC 731, 736, 741. 26 USC 1248.

26 USC 736.

TiON 1248 STOCK.—For purposes of applying this section and sections 731, 736, and 741 to any amount resulting from the reference to section 1248(a) in the second sentence of subsection (c), in the case of g^ji individual, the tax attributable to such amount shall be limited in the manner provided by subsection (b) of section 1248 (relating to gain from certain sales or exchanges of stock in certain foreign corporation)." (B) CROSS REFERENCE.—Section 736 (relating to payments

to a retiring partner or a deceased partner's successor in interest) is amended by adding at the end thereof the following new subsection:

26 USC 751 note-

"(c) CROSS REFERENCE.— "For limitation on the tax attributable to certain gain connected with section 1248 stock, see section 751(e)." (C) EFFECTIVE DATE.—The amendments made by this para-

graph shall apply to transfers beginning after October 9, 1975, and to sales, exchanges, and distributions taking place after such date.

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