Page:United States Statutes at Large Volume 98 Part 1.djvu/1002

 98 STAT. 954

PUBLIC LAW 98-369—JULY 18, 1984 sentence: "For purposes of this subparagraph, any assumption of (or acquisition of stock subject to) a hability under subparagraph (B) shall not be treated as a distribution of property." (5) CONSTRUCTIVE OWNERSHIP.—

26 USC 304.

(A) Paragraph (3) of section 804(c) (relating to constructive ownership) is amended to read as follows: "(3) CONSTRUCTIVE OWNERSHIP.—

"(A) IN GENERAL.—Section 318(a) (relating to constructive ownership of stock) shall apply for purposes of determining control under this section. "(B) MODIFICATION OF 50-PERCENT LIMITATIONS IN SECTION

26 USC 318.

.:'-«DEl'«':

26 USC 306. Supra.

318.—For purposes of subparagraph (A)— "(i) paragraph (2)(C) of section 318(a) shall be applied by substituting *5 percent' for '50 percent', and "(ii) paragraph (3)(C) of section 318(a) shall be applied— "(I) by substituting '5 percent' for '50 percent', and "(II) in any case where such paragraph would not apply but for subclause (I), by considering a corporation as owning the stock (other than stock in such corporation) owned by or for any shareholder of such corporation in that proportion which the value of the stock which such shareholder owned in such corporation bears to the value of all stock in such corporation." (B) Paragraph (4) of section 306(c) is amended by striking out the last sentence and inserting in lieu thereof the following: "For purposes of applying the preceding sentence to paragraph (3), the rules of section 304(c)(3)(B) shall apply." (6) CERTAIN STOCK ACQUIRED IN SECTION 351 EXCHANGE.—Para-

Ante, p. 953.

26 USC 304 note.

graph (3) of section 306(c) (relating to certain stock acquired in section 351 exchange) is amended by striking out the last sentence and inserting in lieu thereof the following: "Rules similar to the rules of section 304(b)(2) shall apply— "(A) for purposes of the preceding sentence, and "(B) for purposes of determining the application of this section to any subsequent disposition of stock which is section 306 stock by reason of an exchange described in the preceding sentence," (7) EFFECTIVE DATES FOR AMENDMENTS MADE BY PARAGRAPHS (1) AND (3). —

(A) IN GENERAL.—Except as otherwise provided in this paragraph, the amendments made by paragraphs (1) and (3) shall apply to stock acquiied after June 18, 1984, in taxable years ending after such date. (B) ELECTION BY TAXPAYER TO HAVE AMENDMENTS APPLY

96 Stat. 490.

EARLIER.—Any taxpayer may elect, at such time and in such manner as the Secretary of the Treasury or his delegate may pjescribe, to have the amendments made by paragraphs (1) and (3) apply as if included in section 226 of the Tax Equity and Fiscal Responsibility Act of 1982. (C) SPECTAI, RULE FOR CERTAIN TRANSFERS TO FORM BANK HOLDING COMPANY.—Except as provided in subparagraph 'D), the amendments made by paragraphs (1) and (3) shall not apply to transfers pursuant to an application to form a

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