Page:United States Statutes at Large Volume 98 Part 1.djvu/642

 98 STAT. 594 26 USC 724 note. 26 USC 735 note.

PUBLIC LAW 98-369—JULY 18, 1984 (1) SUBSECTION (a).—The amendment made by subsection (a) shall apply to property contributed to a partnership after March 31, 1984, in taxable years ending after such date. (2) SUBSECTION (b).—The amendment made by subsection (b) shall apply to property distributed after March 31, 1984, in taxable years ending after such date. SEC. 75. TRANSFERS OF PARTNERSHIP AND TRUST INTERESTS BY CORPORATIONS. (a) GENERAL RULE.—Subchapter C of chapter 1 (relating to corporate distributions and adjustments) is amended by adding at the end thereof the following new part:

PART VII—MISCELLANEOUS CORPORATE PROVISIONS "Sec. 386. Transfers of partnership and trust interests by corporations. 26 USC 386.

"SEC. 386. TRANSFERS OF PARTNERSHIP AND TRUST INTERESTS BY CORPORATIONS.

"(a) CORPORATE DISTRIBUTIONS.—For purposes of determining the amount (and character) of gain recognized by a corporation on any distribution of an interest in a partnership, the distribution shall be treated in the same manner as if it included a property distribution consisting of the corporation's proportionate share of the recognition property of such partnership. "(b) SALES OR EXCHANGE TO WHICH SECTION 337 APPLIES.—For

,,j_.r') >

26 USC 761.

purposes of determining the amount (and character) of gain recognized on a sale or exchange described in section 337, any sale or exchange by a corporation of an interest in a partnership shall be treated as a sale or exchange of the corppration's proportionate share of the recognition property of such partnership. "(c) RECOGNITION PROPERTY.—For purposes of this section, the term 'recognition property' means any property with respect to which gain would be recognized to the corporation if such property— "(1) were distributed by the corporation in a distribution described in section 311 or 336, or "(2) were sold in a sale described in section 337, whichever is appropriate. In determining whether property of a partnership is recognition property, such partnership shall be treated as owning its proportionate share of the property of any other partnership in which it is a partner. "(d) EXTENSION TO TRUSTS.—Under regulations, rules similar to the rules of this section shall also apply in the case of the distribution or sale or exchange by a corporation of an interest in a trust." (b) DISTRIBUTIONS TREATED AS EXCHANGES FOR PURPOSES OF SUBCHAPTER K.—Section 761 (relating to definitions) is amended by

redesignating subsection (e) as subsection (f) and by inserting after subsection (d) the following new subsection: "(e) DISTRIBUTIONS TREATED AS EXCHANGES.—For purposes of—

"(1) section 708 (relating to continuation of partnership), "(2) section 743 (relating to optional adjustment to basis of partnership property), and "(3) any other provision of this subchapter specified in regulations prescribed by the Secretary, any distribution (not otherwise treated as an exchange) shall be treated as an exchange."

i^ei-.i£

�