Page:United States Statutes at Large Volume 98 Part 1.djvu/996

 98 STAT. 948

Ante, p. 569. 26 USC 302. 26 USC 306. 26 USC 543.

26 USC 311. .

PUBLIC LAW 98-369—JULY 18, 1984 the following new sentence: "For purposes of applying section 168(f)(8)(D)(v) of the Internal Revenue Code of 1954, the amendments made by subsection (c) shall apply to agreements entered into after the date of the enactment of this Act." (i) AMENDMENTS RELATED TO SECTION 222.— (1) Sections 301(e)(2) and 302(f)(3) are each amended by striking out "partial or complete liquidation" and inserting in lieu thereof "complete liquidation". (2) The paragraph heading of paragraph (1) of section 306(b) (relating to exceptions) is amended by striking out "INTEREST." and inserting in lieu thereof "INTEREST, ETC.". (3) Paragraph (1) of section 543(a) (defining personal holding company income) is amended by striking out subparagraph (C), by adding "and" at the end of subparagraph (A), and by striking out ", and" at the end of subparagraph (B) and inserting in lieu thereof a period. 0*) AMENDMENT RELATED TO SECTION 223.—Paragraph (1) of section 311(e) (defining qualified stock) is amended by adding at the end thereof the following new subparagraph: "(C) RULES FOR PASSTHRU ENTITIES.—In the case of an S corporation, partnership, trust, or estate— "(i) the determination of whether subparagraph (A) is satisfied shall be made at the shareholder, partner, or beneficiary level (rather than at the entity level), and "(ii) the distribution shall be treated as made directly to the shareholders, partners, or beneficiaries in proportion to their respective interests in the entity." (k) AMENDMENTS RELATED TO SECTION 224.— (1) ASSETS TREATED AS SOLD AT FAIR MARKET VALUE.—

26 USC 338.

(A) IN GENERAL.—Paragraph (1) of section 338(a) (relating to general rule) is amended by inserting "at fair market value" after "acquisition date". (B) BASIS OF ASSETS AFTER DEEMED PURCHASE.—Subsection

(b) of section 338 (relating to price at which deemed sale made) is amended to read as follows: , >

, i

"(b) BASIS OF ASSETS AFTER DEEMED PURCHASE.—

"(1) IN GENERAL.—For purposes of subsection (a), the assets of the target corporation shall be treated as purchased for an amount equal to the sum of— "(A) the grossed-up basis of the purchasing corporation's recently purchased stock, and "(B) the basis of the purchasing corporation's nonrecently purchased stock.

^

"(2)

ADJUSTMENT FOR LIABILITIES

AND OTHER RELEVANT

ITEMS.—The amount described in paragraph (1) shall be adjusted under regulations prescribed by the Secretary for liabilities of the target corporation and other relevant items.
 * rti; c J i


 * .:vj,

}'va p

k,,!s

"(3) ELECTION TO STEP-UP THE BASIS OF CERTAIN TARGET STOCK.—

"(A) IN GENERAL.—Under regulations prescribed by the Secretary, the basis of the purchasing corporation's nonrecently purchased stock shall be the basis amount determined under subparagraph (B) of this paragraph if the purchasing corporation makes an election to recognize gain as if such stock were sold on the acquisition date for an amount equal to the basis amount determined under subparagraph (B).

�