Page:United States Statutes at Large Volume 98 Part 1.djvu/630

 98 STAT. 582 -

PUBLIC LAW 98-369—JULY 18, 1984

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special rules), as added by this Act, is amended by adding at the end thereof the following new paragraph: "(4)

TREATMENT OF OBLIGATIONS DISTRIBUTED TO CORPORA-

TIONS.—Any debt obligation of a corporation distributed by such corporation with respect to its stock shall be treated as if it had been issued by such corporation for property." (d) SPECIAL RULE IN CASE OF DISTRIBUTIONS RECEIVED BY 20 PER-

Ante, p. 569.

CENT CORPORATE SHAREHOLDER.—Section 301 (relating to distributions of property) is amended by redesignating subsection (0 as subsection (g) and by inserting after subsection (e) the following new subsection: "(f) SPECIAL RULE FOR CERTAIN DISTRIBUTIONS RECEIVED BY 20 PERCENT CORPORATE SHAREHOLDER.—

"(1) IN GENERAL.—Except to the extent otherwise provided in regulations, solely for purposes of determining the taxable income of any 20 percent corporate shareholder (and its adjusted basis in the stock of the distributing corporation), section 312 shall be applied with respect to the distributing corporation as if it did not contain subsection (n) thereof.

Ante, p. 580.

"(2) 2 0 PERCENT CORPORATE SHAREHOLDER.—For purpOSeS of

this subsection, the term '20 percent corporate shareholder' means, with respect to any distribution, any corporation which owns (directly or through the application of section 318)— "(A) stock in the corporation making the distribution possessing at least 20 percent of the total combined voting power of all classes of stock entitled to vote, or "(B) at least 20 percent of the total value of all stock of the distributing corporation (except nonvoting stock which is limited and preferred as to dividends), but only if, but for this subsection, the distributee corporation would be entitled to a deduction under section 243, 244, or 245 with respect to such distribution. "(3) REGULATIONS.—The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section."

.£' 8 J

26 USC 312 note.

(e) EFFECTIVE D A T E S. — (1) ADJUSTMENTS TO EARNINGS AND PROFITS.— (A) PARAGRAPHS (i), (2), AND (3) OF SECTION 3i2(n).—

Ante, p. 580.

Ante, p. 568. i

i IK5 i: Mnh ty '

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The provisions of paragraphs (1), (2), and (3) of section 312(n) of the Internal Revenue Code of 1954 (as added by subsection (a)) shall apply to amounts paid or incurred in taxable years beginning after September 30, 1984. (B) PARAGRAPH (4) OF SECTION 3 1 2 (n).—The provisions of paragraph (4) of section 312(n) of such Code (as so added) shall apply to distributions after September 30, 1984; except that such provisions shall not apply to any distribution to which the amendments made by section 54(a) of this Act do not apply. (C) LIFO INVENTORY.—The provisions of paragraph (5) of section 312(n) of such Code (as so added) shall apply to taxable years beginning after September 30, 1984. (D) INSTALLMENT SALES.—The provisions of paragraph (6) of section 312(n) of such (Dode (as so added) shall apply to sales after September 30, 1984, in taxable years ending after such date. (E) COMPLETED CONTRACT METHOD.—The provisions of paragraph (7) of section 312(n) of such Code (as so added)

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