Page:United States Statutes at Large Volume 94 Part 1.djvu/265

 PUBLIC LAW 96-222—APR. 1, 1980

94 STAT. 215

taxable year exceeds a tax determined under section 1 or 511 on an 26 USC i, 5ii. amount equal to the sum of— "(1) the amount subject to tax under subsection (b)(1), plus "(2) an amount determined by multiplying the sum referred to in subsection (b)(2)(A) by a fraction— "(A) the numerator of which is the excess of the net capital gain over the deduction under section 1202, and 26 USC 1202. "(B) the denominator of which is the net capital gain." (C) SPECIAL RULE FOR PASS-THROUGH ENTITIES.-

(i) IN GENERAL—In applying sections 1201(c)(2)(A)(ii) 26 USC 1201 and 1202(c)(1)(B) of the Internal Revenue Code of 1954 "o\«with respect to any pass-through entitjf, the determina- ^202 tion of the period for which gain or loss is properly taken into account shall be made at the entity level. (ii) PASS-THROUGH ENTITY DEFINED.—For purposes of clause (i), the term "pass-through entity" means— (I) a regulated investment company, (II) a real estate investment trust, (III) an electing small business corporation, (IV) a partnership, (V) an estate or trust, and (\^) a common trust fund. (3) AMENDMENTS RELATED TO SECTION 403 OF THE ACT.— 92 Stat. 2868. (A) CLARIFICATION OF TRANSITIONAL RULE.—Subsection (c)

of section 1201 (relating to transitional rule for taxable years 26 USC 1201. which include January 1, 1979) is amended— (i) by striking out so much of such section as precedes "a corporation" and inserting in lieu thereof the following: "(c) TRANSITIONAL RULE.—If for any taxable year ending after December 31, 1978, and beginning before January 1, 1980,", and (ii) by amending clause (ii) of paragraph (2)(A) to read as follows: "(ii) the net capital gain taking into account only gain or loss properly taken into account for the portion of the taxable year after December 31, 1978, plus. (B) UNDISTRIBUTED CAPITAL GAIN OF REGULATED INVESTMENT COMPANY.—Clause (iii) of section 852(b)(3)(D) (relating 26 USC 852.

to treatment by shareholders of undistributed capital gain) is amended by striking out "70 percent" and inserting in lieu thereof "72 percent". (C) ADDITION TO RESERVES FOR BAD DEBTS.—Clause (iv) of

section 5930bX2XE) is amended by striking out "%" each 26 USC 593. place it appears and inserting in lieu thereof " * %«". (D) CLERICAL AMENDMENTS.—

(i) Paragraph (3) of section 904(b) is amended by 26 USC 904. redesignating the subparagraph (E) added by section 403(c)(4) of the Revenue Act of 1978 as subparagraph (F). (ii) Subparagraph (B) of section 403(c)(4) of the Revenue Act of 1978 is amended by striking out "striking the period at the end of subparagraph (D) of paragraph (3), inserting in lieu thereof a comma, and inserting immediately thereafter" and inserting in lieu thereof adding at the end of paragraph (3)". (4) AMENDMENTS RELATED TO SECTION 421 OF THE ACT.— 92 Stat. 287i. (A) CERTAIN DEDUCTIONS WHICH MAY BE CARRIED OVER NOT TAKEN INTO ACCOUNT.—Paragraph (1) of section 55(b) (defin- 26 USC 55.

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