Page:United States Statutes at Large Volume 96 Part 2.djvu/1021

 PUBLIC LAW 97-448—JAN. 12, 1983

96 STAT. 2383

(2) Clauses (i) and (ii) of the first sentence of section 6166(g)(l)(B) (relating to disposition of interest; withdrawal of 26 USC 6166. funds from business) are amended to read as follows: "(i) the redemption of such stock, and the withdrawal of money and other property distributed in such redemption, shall not be treated as a distribution or withdrawal for purposes of subparagraph (A), and "(ii) for purposes of subparagraph (A), the value of the interest in the closely held business shall be considered to be such value reduced by the value of the stock redeemed." (d) AMENDMENTS RELATED TO SECTION 424.— 95 Stat. 317. (1) COORDINATION WITH SECTION 6166 (a)(i).—

(A) IN GENERAL.—Subsection (d) of section 2035 (relating 26 USC 2035. to adjustments for gifts made within 3 years of decedent's death) is amended by adding at the end thereof the following new paragraph: "(4)

COORDINATION

OF

3-YEAR

RULE

WITH

SECTION

6166(a)(1).—An estate shall be treated as meeting the 35percent of adjusted gross estate requirement of section 6166(a)(1) only if the estate meets such requirement both with and without the application of paragraph (1)." (B) CROSS REFERENCE.—Subsection (j) of section 6166 26 USC 6166.

(relating to extension of time for payment of estate tax where estate consists largely of interest in closely held business) is amended by adding at the end thereof the following new paragraph: "(5) TRANSFERS WITHIN 3 YEARS OF DEATH.— "For special rule for qualifying an estate under this section where property has been transferred within 3 years of decedent's death, see section 2035(d)(4)."

(C) CONFORMING AMENDMENT.—Paragraph (3) of section

2035(d) is amended by striking out subparagraph (C), by adding "and" at the end of subparagraph (B), and by redesignating subparagraph (D) as subparagraph (C). (2) EXCEPTIONS FOR CERTAIN TRANSFERS.—Paragraph (2) of

section 2035(d) (relating to exceptions for certain transfers) is amended— (A) by inserting "of this subsection and paragraph (2) of subsection (b)" after "Paragraph (1)", and (B) by striking out "2041,". (3) ELECTION TO HAVE AMENDMENTS NOT APPLY.—

26 USC 2501

(A) In the case of any decedent— note, (i) who dies before August 13, 1984, and (ii) who made a gift (before August 13, 1981, and during the 3-year period ending on the date of the decedent's death) on which tax imposed by chapter 12 of the Internal Revenue Code of 1954 has been paid 26 USC 2501 et before April 16, 1982, ^^ such decedent's executor may make an election to have subtitle B of such Code (relating to estate and gift taxes) 26 USC 2001. applied with respect to such decedent without regard to any of the amendments made by title IV of the Economic Recovery Tax Act of 1981.

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