Page:United States Statutes at Large Volume 98 Part 1.djvu/1076

 98 STAT. 1028

PUBLIC LAW 98-369—JULY 18, 1984 a trust created before such date, clause (ii) shall not apply. "(D) QUALIFIED INTEREST.—For purposes of this paragraph, the term 'qualified interest' means an interest for which a deduction is allowable under subsection (a). "(E) LIMITATION.—The deduction referred to in subparagraph (A) shall not exceed the amount of the deduction which would have been allowable for the reformable interest but for paragraph (2). "(F) SPECIAL RULE WHERE INCOME BENEFICIARY DIES.—If

c

26 USC 4940 et seq.

(by reason of the death of any individual, or by termination or distribution of a trust in accordance with the terms of the trust instrument) by the due date for filing the estate tax return (including any extension thereof) a reformable interest is in a wholly charitable trust or passes directly to a person or for a use described in subsection (a), a deduction shall be allowed for such reformable interest as if it had met the requirements of paragraph (2) on the date of the decedent's death. For purposes of the preceding sentence, the term 'wholly charitable trust' means a charitable trust which, upon the allowance of a deduction, would be described in section 4947(a)(1). "(G) STATUTE OF LIMITATIONS.—The period for assessing any deficiency of any tax attributable to the application of this paragraph shall not expire before the date 1 year after the date on which the Secretary is notified that such reformation has occurred. "(H) REGULATIONS.—The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this paragraph, including regulations providing such adjustments in the application of the provisions of section 508 (relating to special rules relating to section 501(c)(3) organizations), subchapter J (relating to estates, trusts, beneficiaries, and decedents), and chapter 42 (relating to private foundations) as may be necessary by reason of the qualified reformation. "(I) REFORMATIONS PERMITTED IN CASE OF REMAINDER INTERESTS IN RESIDENCE OR FARM, POOLED INCOME FUNDS,

ETC.—The Secretary shall prescribe regulations (consistent with the provisions of this paragraph) permitting reformations in the case of any failure— "(i) to meet the requirements of section 170(f)(3)(B) (relating to remainder interests in personal residence or farm, etc.), or "(ii) to meet the requirements of section 642(c)(5)." 26 USC 170.

OJ) INCOME TAX DEDUCTION.—Subsection (f) of section 170 (relating

to disallowance of deduction in certain cases and special rules) is amended by adding at the end thereof the following new paragraph: "(7) REFORMATIONS TO COMPLY WITH PARAGRAPH (2).—

Ante, p. 1026.

"(A) IN GENERAL.—A deduction shall be allowed under subsection (a) in respect of any qualified reformation (within the meaning of section 2055(e)(3)(B)). "(B) RULES SIMILAR TO SECTION 2055(e)(3) TO APPLY.—For

26 USC 2522.

purposes of this paragraph, rules similar to the rules of section 2055(e)(3) shall apply." (c) GiFT TAX DEDUCTION.—Subsection (c) of section 2522 is amended by adding at the end thereof the following new paragraph:

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