Page:United States Statutes at Large Volume 98 Part 1.djvu/643

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 595

(c) CLARIFICATION OF FAIR MARKET VALUE IN THE CASE OF NONRE-

COURSE INDEBTEDNESS.—Section 7701 (relating to definitions), as

26 USC 7701.

amended by this Act, is amended by redesignating subsection (g) as subsection (h) and by inserting after subsection (f) the following new subsection:

Ante, p. 567.

"(g) CLARIFICATION OF FAIR MARKET VALUE IN THE CASE OF NONRECOURSE INDEBTEDNESS.—For purposes of subtitle A, in determining

the amount of gain or loss (or deemed gain or loss) with respect to any property, the fair market value of such property shall be treated as being not less than the amount of any nonrecourse indebtedness to which such property is subject." (d) CLERICAL AMENDMENT.—The table of parts for subchapter C of chapter 1 is amended by adding at the end thereof the following new item: "Part VII. Miscellaneous corporate provisions." (e) EFFECTIVE DATE.—The amendments made by this section shall apply to distributions, sales, and exchanges made after March 31, 1984, in taxable years ending after such date. SEC. 76. APPLICATION OF SECTION 751 IN THE CASE OF TIERED PARTNERSHIPS. (a) GENERAL RULE.—Section 751 (relating to unrealized receivables and inventory items) is amended by adding at the end thereof the following new subsection:

26 USC 386 note. r; r j. j; < 26 USC 751.

"(f) SPECIAL RULES IN THE CASE OF TIERED PARTNERSHIPS, ETC.—In

determining whether property of a partnership is— "(1) an unrealized receivable, or "'"^"' ^ -^^''^ "(2) an inventory item, such partnership shall be treated as owning its proportionate share of the property of any other partnership in which it is a partner. Under regulations, rules similar to the rules of the preceding sentence shall also apply in the case of interests in trusts.' (b) EFFECTIVE DATE.—The amendment made by subsection (a) 26 USC 751 note. shall apply to distributions, sales, and exchanges made after March 31, 1984, in taxable years ending after such date. SEC. 77. SECTION 1031 NOT APPLICABLE TO PARTNERSHIP INTERESTS; LIMITATION ON THE PERIOD DURING WHICH LIKE KIND EXCHANGES MAY BE MADE. (a) IN GENERAL.—Subsection (a) of section 1031 (relating to nonrec- 26 USC 1031. ognition of gain or loss from exchanges solely in kind) is amended to read as follows: "(a) NONRECOGNITION OF GAIN OR Loss FROM EXCHANGES SOLELY IN KIND.—

"(1) IN GENERAL.—No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held either for productive use in a trade or business or for investment. "(2) EXCEPTION.—This subsection shall not apply to any exchange of— , "(A) stock in trade or other property held primarily for sale, "(B) stocks, bonds, or notes, "(C) other securities or evidences of indebtedness or interest, "(D) interests in a partnership,

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