Page:United States Statutes at Large Volume 94 Part 3.djvu/820

 94 STAT. 3464

PUBLIC LAW 96-595—DEC. 24, 1980

Public Law 96-595 96th Congress An Act Dec. 24, 1980 [H.R. 4968]

Internal Revenue Code of 1954, amendment.

To amend the Internal Revenue Code of 1954 with respect to net operating loss carryovers of taxpayers who cease to be real estate investment trusts, to increase interest rates on certain United States retirement bonds, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. NET OPERATING LOSS CARRYOVER FOR CERTAIN REITS.

(a) IN GENERAL.—Subparagraph (E) of section 172(b)(1) of the 26 USC 172. Internal Revenue Code of 1954 (relating to net operating loss deduction) is amended to read as follows: "(E)(i) A net operating loss for a REIT year— "(I) shall not be a net operating loss carryback to any taxable year preceding the taxable year of such loss, and "(II) shall be a net operating loss carryover to each of the 8 taxable years following the taxable year of such loss. "(ii) In the case of any net operating loss for a taxable year which is not a REIT year— "(I) such loss shall not be carried back to any taxable year which is a REIT year, and "(II) the number of taxable years to which such loss may be a net operating loss carryover under subparagraph (B) shall be increased (to a number not greater than 8) by the number of taxable years to which such loss may not be a net operating loss carryback by reason of subclause (I), "REIT year." "(iii) For purposes of this subparagraph, the term 'REIT year' means any taxable year for which the provisions of part II of subchapter M (relating to real estate investment trusts) apply to the taxpayer.". 26 USC 172 note. (b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply to the determination of the net operating loss deduction for taxable years ending after October 4, 1976. For purposes of applying the preceding sentence to any net operating loss for a taxable year which is not a REIT year and which ends on or before October 4, 1976, subclause (II) of section 172(b)(l)(E)(ii) of the Internal Revenue Code of 26 USC 172. 1954 shall be applied by substituting "the number of REIT years to which such loss was a net operating loss carryback" for "the number of taxable years to which such loss may not be a net operating loss carryback by reason of subclause (I)". In the case of a net operating loss for a taxable year described in the preceding sentence, subclause (II) of section 172(b)(l)(E)(ii) of such Code shall not apply to any taxpayer which acted so as to cause it to cease to qualify as a "real estate investment trust" within the meaning of section 856 of such 26 USC 856. Code if the principal purpose for such action was to secure the benefit of the allowance of a net operating loss carryover under section 172(b)(1)(B) of such Code.

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