Page:United States Statutes at Large Volume 94 Part 1.djvu/355

 PUBLIC LAW 96-223—APR. 2, 1980

94 STAT. 305

amended by adding at the end thereof the following new subsection: "(f) SPECIAL RULE FOR L I F O INVENTORIES.—

"(1) IN GENERAL.—In the case of a corporation inventorying goods under the LIFO method, this section shall apply to gain from the sale or exchange of inventory assets (which under subsection (b)(2) constitute property) only to the extent that such gain exceeds the LIFO recapture amount with respect to such assets. "(2) DEFINITIONS.—The terms used in this subsection shall have the same meaning as when used in section 336(b). Ante, p. 304. "(3) CROSS REFERENCE.— "For treatment of gain from the sale or exchange of an installment obligation as gain resulting from the sale or exchange of the property in respect of which the obligation was received, see the last sentence of section 453(d)(1)."

(B) Subparagraph (B) of section 453(d)(4) (relating to liquidations to which section 337 applies) is amended by adding at the end thereof the following new sentence: "In the case of any installment obligation which would have met the requirements of clauses (i) and (ii) of the first sentence of this subparagraph but for section 337(f), gain shall be recognized to such corporation by reason of such distribution only to the extent gain would have been recognized under section 337(f) if such corporation had sold or exchanged such installment obligation on the day of such distribution." (3) EFFECTIVE DATE.—The amendments made by paragraphs (1) and (2) shall apply to distributions and dispositions pursuant to plans of liquidation adopted after December 31, 1981. SEC. 404. EXEMPTION OF CERTAIN INTEREST INCOME FROM TAX. (a) IN GENERAL.—Section 116 (relating to partial exclusion of dividends received by individuals) is amended to read as follows: "SEC. 116. PARTIAL EXCLUSION OF DIVIDENDS AND INTEREST RECEIVED BY INDIVIDUALS. "(a) EXCLUSION FROM GROSS INCOME.—Gross income does not include the sum of the amounts received during the taxable year by an individual as— "(1) a dividend from a domestic corporation, or "(2) interest. "(b) LIMITATIONS.— "(1) MAXIMUM

DOLLAR AMOUNT.—The aggregate

26 USC 453. 26 USC 337.

Ante, p. 304.

26 USC 336 note.

26 USC 116.

amount excluded under subsection (a) for any taxable year shall not exceed $200 ($400 in the case of a joint return under section 6013). 26 USC 6013. "(2) CERTAIN DIVIDENDS EXCLUDED.—Subsection (a)(1) shall not apply to any dividend from a corporation which, for the taxable year of the corporation in which the distribution is made, or for the next preceding taxable year of the corporation, is a corporation exempt from tax under section 501 (relating to certain 26 USC 501. charitable, etc., organizations) or section 521 (relating to farmers' 26 USC 521. cooperative associations). "(c) DEFINITIONS; SPECIAL RULES.—For purposes of this section— "(1) INTEREST DEFINED.—The term 'interest' means— "(A) interest on deposits with a bank (as defined in section 581), "(B) amounts (whether or not designated as interest) paid, in respect of deposits, investment certificates, or withdrawable or repurchasable shares, by—

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