# Pub. L. 100-647: changes to the Internal Revenue Code 1988-11-10, 102 Stat. 3349. Source: . ## Legislative history - Bill: [H.R. 4333](https://www.congress.gov/bill/100th-congress/house-bill/4333) ## § 1: Tax imposed - § 1(g)(2): Pub. L. 100–647, § 1001(a)(3), inserted provision relating to application of subpar. (B) at end of last sentence. - § 1(i)(3)(A): Pub. L. 100–647, § 1014(e)(2), substituted “any exclusion, deduction, or credit” for “any deduction or credit”. - § 1(i)(3)(C): Pub. L. 100–647, § 1014(e)(7), added subpar. (C) relating to special rule where parent has different taxable year. - § 1(i)(3)(C): Pub. L. 100–647, § 1014(e)(1), added subpar. (C) relating to coordination with section 644. - § 1(i)(4): Pub. L. 100–647, § 1014(e)(3)(A), substituted “adjusted gross income” for “gross income” and inserted “attributable to” after “which is not”. - § 1(i)(4): Pub. L. 100–647, § 1014(e)(3)(B)–(D), substituted “his deductions” for “his deduction”, “the itemized deductions allowed” for “the deductions allowed”, and “adjusted gross income” for “gross income”. - § 1(i): Pub. L. 100–647, § 1014(e)(6), substituted “custodial parent (within the meaning of section 152(e))” for “custodial parent”. - § 1(i): Pub. L. 100–647, § 6006(a), added par. (7). ## § 2: Definitions and special rules - § 2(d): Pub. L. 100–647 substituted “the taxes imposed by sections 1 and 55” for “the tax imposed by section 1”. ## § 11: Tax imposed - § 11(d): Pub. L. 100–647 substituted “the taxes imposed by subsection (a) and section 55” for “the tax imposed by subsection (a)”. ## § 15: Effect of changes - § 15(e): Pub. L. 100–647 added subsec. (e). ## § 25: Interest on certain home mortgages - § 25(c)(2)(A)(ii): Pub. L. 100–647, § 1013(a)(25), amended Pub. L. 99–514, § 1301(f)(2)(C)(ii), see 1986 Amendment note below. - § 25(h): Pub. L. 100–647, § 4005(a)(2), substituted “1989” for “1988”. - § 25(h): Pub. L. 100–647, § 1013(a)(26), substituted “1988” for “1987”. - § 25: Pub. L. 100–647, § 4005(g)(7), added subsec. (j). ## § 26: Limitation based on tax liability; definition of tax liability - § 26(b)(2)(C): Pub. L. 100–647, § 1011A(c)(10)(A), struck out “, (o)(2),” after “subsection (m)(5)(B)”. - § 26(b)(2)(C): Pub. L. 100–647, § 5012(b)(2), substituted “(q), or (v)” for “or (q)”. - § 26(b)(2)(D): Pub. L. 100–647, § 1011A(c)(10)(B), substituted “72(t) (relating to 10-percent additional tax on early distributions from qualified retirement plans)” for “408(f) (relating to additional tax on income from certain retirement accounts)”. - § 26(b)(2)(K): Pub. L. 100–647, § 1007(g)(1), substituted “corporations).” for “corporations,”. - § 26(b)(2)(L): Pub. L. 100–647, § 1012(q)(8), added subpar. (L) relating to branch profits tax. - § 26(b)(2)(L): Pub. L. 100–647, § 1006(t)(16)(C), added subpar. (L) relating to taxes with respect to certain residual interests. - § 26(b)(2)(M): Pub. L. 100–647, § 4005(g)(4), added subpar. (M). ## § 32: Earned income - § 32(h): Pub. L. 100–647, § 1007(g)(12), struck out “for taxpayers other than corporations” after “alternative minimum tax”. - § 32(i): Pub. L. 100–647, § 1001(c), amended par. (3) generally. Prior to amendment, par. (3) read as follows: “If any increase determined under paragraph (1) is not a multiple of $10, such increase shall be rounded to the nearest multiple of $10 (or, if such increase is a multiple of $5, such increase shall be increased to the next higher multiple of $10).” ## § 34: Certain uses of gasoline and special fuels - § 34(b): Pub. L. 100–647 substituted “section 6421(j) or 6427(k)” for “section 6421(i) or 6427(j)”. ## § 38: General business credit - § 38(c): Pub. L. 100–647, § 1007(g)(2), amended pars. (1) to (3) generally, substituting pars. (1) and (2) for former pars. (1) to (3), redesignating former par. (4) as (3), and substituting “subparagraph (B) of paragraph (1)” for “subparagraphs (A) and (B) of paragraph (1)” in subpars. (A), (B), (C), and (D). - § 38(c): Pub. L. 100–647, § 1007(g)(8), made technical correction to directory language of Pub. L. 99–514, § 701(c)(4), see 1986 Amendment note below. - § 38(d): Pub. L. 100–647, § 1002(e)(8)(A), substituted “Ordering rules” for “Special rules for certain regulated companies” in heading and amended text generally. Prior to amendment, text read as follows: “In the case of any taxpayer to which section 46(f) applies, for purposes of sections 46(f), 47(a), and 196(a) and any other provision of this title where it is necessary to ascertain the extent to which the credits determined under section 40(a), 41(a), 42(a), 46(a), or 51(a) are used in a taxable year or as a carryback or carryforward, the order in which such credits are used shall be determined on the basis of the order in which they are listed in subsection (b).” ## § 39: Carryback and carryforward of unused credits - § 39(d): Pub. L. 100–647 added par. (4). ## § 41: Credit for increasing research activities - § 41(g): Pub. L. 100–647, § 1002(h)(1), inserted at end “If the amount determined under subsection (a) for any taxable year exceeds the limitation of the preceding sentence, such amount may be carried to other taxable years under the rules of section 39; except that the limitation of the preceding sentence shall be taken into account in lieu of the limitation of section 38(c) in applying section 39.” - § 41(h): Pub. L. 100–647, § 4008(b)(1), added subsec. (h). Former subsec. (h) redesignated (i). - § 41: Pub. L. 100–647, § 4008(b)(1), redesignated former subsec. (h) as (i). - § 41: Pub. L. 100–647, § 4007(a), substituted “1989” and “1990” for “1988” and “1989”, respectively, wherever appearing in subsec. (h), prior to redesignation as subsec. (i) by Pub. L. 100–647, § 4008(b)(1). ## § 42: Low-income housing credit - § 42(b)(2)(A): Pub. L. 100–647, § 1002(l)(1)(A), substituted “for the earlier of—” for “for the month in which such building is placed in service” and added cls. (i) and (ii) and concluding provisions. - § 42(b)(2): Pub. L. 100–647, § 1002(l)(1)(B), substituted “the month applicable under clause (i) or (ii) of subparagraph (A)” for “the month in which the building was placed in service”. - § 42(b)(3): Pub. L. 100–647, § 1002(l)(9)(B), amended par. (3) generally. Prior to amendment, par. (3) read as follows: “For treatment of certain rehabilitation expenditures as separate new buildings, see subsection (e).” - § 42(c)(2)(A): Pub. L. 100–647, § 1002(l)(2)(A), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “which at all times during the compliance period with respect to such building is part of a qualified low-income housing project, and”. - § 42(d)(2)(D)(ii): Pub. L. 100–647, § 1002(l)(3), substituted “Special rules for certain transfers” for “Special rule for nontaxable exchanges” in heading and amended text generally. Prior to amendment, text read as follows: “For purposes of determining under subparagraph (B)(ii) when a building was last placed in service, there shall not be taken into account any placement in service in connection with the acquisition of the building in a transaction in which the basis of the building in the hands of the person acquiring it is determined in whole or in part by reference to the adjusted basis of such building in the hands of the person from whom aquired [sic].” - § 42(d)(3): Pub. L. 100–647, § 1002(l)(4), amended par. (3) generally. Prior to amendment, par. (3) read as follows: “The eligible basis of any building shall be reduced by an amount equal to the portion of the adjusted basis of the building which is attributable to residential rental units in the building which are not low-income units and which are above the average quality standard of the low-income units in the building.” - § 42(d)(5)(A): Pub. L. 100–647, § 1002(l)(6)(B), substituted “subparagraphs (B) and (C)” for “subparagraph (B)”. - § 42(d)(5)(A): Pub. L. 100–647, § 1002(l)(5), inserted “(increased, in the case of an existing building which meets the requirements of paragraph (2)(B), by the amounts described in paragraph (2)(A)(i)(II))” before period at end. - § 42(d)(5): Pub. L. 100–647, § 1002(l)(6)(A), added subpar. (C). - § 42(d)(6)(A): Pub. L. 100–647, § 1002(l)(7), struck out cl. (iii) which related to other circumstances of financial distress. - § 42(d)(6)(B): Pub. L. 100–647, § 1002(l)(8), struck out “of 1934” after “Act”. - § 42(f)(1): Pub. L. 100–647, § 1002(l)(2)(B), substituted “beginning with—” for “beginning with” and subpars. (A) and (B) and concluding provisions for “the taxable year in which the building is placed in service or, at the election of the taxpayer, the succeeding taxable year. Such an election, once made, shall be irrevocable.” - § 42(f)(3): Pub. L. 100–647, § 1002(l)(9)(A), amended par. (3) generally. Prior to amendment, par. (3) “Special rule where increase in qualified basis after 1st year of credit period” read as follows: - § 42(g)(2)(B)(i): Pub. L. 100–647, § 1002(l)(10), struck out “Federal” after “comparable”. - § 42(g)(2)(C): Pub. L. 100–647, § 1002(l)(11), added subpar. (C). - § 42(g)(3): Pub. L. 100–647, § 1002(l)(12), amended par. (3) generally, substituting subpars. (A) to (C) for former subpars. (A) and (B). - § 42(g)(4): Pub. L. 100–647, § 1002(l)(13), inserted “; except that, in applying such provisions (other than section 142(d)(4)(B)(iii)) for such purposes, the term ‘gross rent’ shall have the meaning given such term by paragraph (2)(B) of this subsection” before period at end. - § 42(g)(6): Pub. L. 100–647, § 1002(l)(32), added par. (6). - § 42(h)(1): Pub. L. 100–647, § 1002(l)(14)(A), amended par. (1) generally. Prior to amendment, par. (1) read as follows: “No credit shall be allowed by reason of this section for any taxable year with respect to any building in excess of the housing credit dollar amount allocated to such building under this subsection. An allocation shall be taken into account under the preceding sentence only if it occurs not later than the earlier of— - § 42(h)(1)(B): Pub. L. 100–647, § 4003(b)(1), substituted “(C), (D), or (E)” for “(C) or (D)”. - § 42(h)(1)(E): Pub. L. 100–647, § 4003(a), added subpar. (E). - § 42(h)(4)(A): Pub. L. 100–647, § 1002(l)(15), substituted “if—” for “and which is taken into account under section 146” and added cls. (i) and (ii). - § 42(h)(5)(D), § 42(h)(5)(E): Pub. L. 100–647, § 1002(l)(16), added subpar. (D) and redesignated former subpar. (D) as (E). - § 42(h)(6)(B)(ii): Pub. L. 100–647, § 1002(l)(14)(B), struck out cl. (ii) which read as follows: - § 42(h)(6)(D): Pub. L. 100–647, § 1002(l)(17), amended subpar. (D) generally. Prior to amendment, subpar. (D) “Credit allowable determined without regard to averaging convention, etc.” read as follows: “For purposes of this subsection, the credit allowable under subsection (a) with respect to any building shall be determined— - § 42(h)(6)(E): Pub. L. 100–647, § 1002(l)(18), added subpar. (E). - § 42(i)(2)(A): Pub. L. 100–647, § 1002(l)(19)(A), inserted “or any prior taxable year” after “such taxable year” and substituted “is or was outstanding” for “is outstanding” and “are or were used” for “are used”. - § 42(i)(2)(B): Pub. L. 100–647, § 1002(l)(19)(B), substituted “balance of loan or proceeds of obligations” for “outstanding balance of loan” in heading and amended text generally. Prior to amendment, text read as follows: “A loan shall not be taken into account under subparagraph (A) if the taxpayer elects to exclude an amount equal to the outstanding balance of such loan from the eligible basis of the building for purposes of subsection (d).” - § 42(i)(2)(C): Pub. L. 100–647, § 1002(l)(19)(C), added subpar. (C). Former subpar. (C) redesignated (D). - § 42(i)(2): Pub. L. 100–647, § 1002(l)(19)(C), (D), redesignated former subpar. (C) as (D) and substituted “this paragraph” for “subparagraph (A)”. - § 42(j)(4)(D): Pub. L. 100–647, § 1007(g)(3)(B), substituted “D, or G” for “or D”. - § 42(j)(4)(F): Pub. L. 100–647, § 1002(l)(20), added subpar. (F). - § 42(j)(5)(B): Pub. L. 100–647, § 4004(a), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “This paragraph shall apply to any partnership— - § 42(j)(5)(B): Pub. L. 100–647, § 1002(l)(21), amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “which has 35 or more partners each of whom is a natural person or an estate, and”. - § 42(j)(6): Pub. L. 100–647, § 1002(l)(22), inserted “(or interest therein)” after “disposition of building” in heading, and in text inserted “or an interest therein” after “of a building”. - § 42(k)(2)(B): Pub. L. 100–647, § 1002(l)(23), inserted before period at end “, except that this subparagraph shall not apply in the case of a federally assisted building described in subsection (d)(6)(B) if—” and cls. (i) and (ii). - § 42(l): Pub. L. 100–647, § 1002(l)(24)(B), substituted “Certifications and other reports to Secretary” for “Certifications to Secretary” in heading. - § 42(l)(2), § 42(l)(3): Pub. L. 100–647, § 1002(l)(24)(A), added par. (2) and redesignated former par. (2) as (3). - § 42(n): Pub. L. 100–647, § 4003(b)(3), amended subsec. (n) generally, substituting a single par. for former pars. (1) and (2). - § 42(n)(1): Pub. L. 100–647, § 1002(l)(25), inserted “, and, except for any building described in paragraph (2)(B), subsection (h)(4) shall not apply to any building placed in service after 1989” after “year after 1989”. ## § 45C: Clinical testing expenses for certain drugs for rare diseases or conditions - § 45C(b)(1): Pub. L. 100–647, § 4008(c)(1), substituted “1989” for “1988”. - § 45C(b)(2)(A)(ii)(II): Pub. L. 100–647, § 1018(q)(1), amended subcl. (II) generally. Prior to amendment, subcl. (II) read as follows: “before the date on which an application with respect to such drug is approved under section 505(b) of such Act or, if the drug is a biological product, before the date on which a license for such drug is issued under section 351 of the Public Health Services Act, and”. ## § 45K: Credit for producing fuel from a nonconventional source - § 45K(f)(1)(A): Pub. L. 100–647 substituted “1991” for “1990”. ## § 46: Amount of credit - § 46: Pub. L. 100–647, § 4006, as amended by Pub. L. 101–239, § 7814(d), substituted “1989” for “1988” in table items (viii) C., (ix) B., and (x). - § 46: Pub. L. 100–647, § 1013(a)(44), substituted “private activity bonds” for “industrial development bonds” in heading, and in text substituted “a private activity bond (within the meaning of section 141)” for “an industrial development bond (within the meaning of section 103(b)(2))”. - § 46: Pub. L. 100–647, § 1002(a)(17), substituted “property to which section 168 applies” for “recovery property” in heading, substituted “property to which section 168 applies” for “recovery property” and “168(e)” for “168(c)” in subpar. (A), substituted “168(e)” for “168(c)” in subpar. (B), and inserted “(as in effect on the day before the date of the enactment of the Tax Reform Act of 1986)” after “section 168(f)(3)(B)” in concluding provisions. - § 46: Pub. L. 100–647, § 1002(a)(25)(A), substituted “property to which section 168 applies” for “recovery property (within the meaning of section 168)”. - § 46: Pub. L. 100–647, § 1002(a)(25)(B), substituted “to which section 168 does not apply” for “which is not recovery property (within the meaning of section 168)”. - § 46: Pub. L. 100–647, § 1002(a)(15), substituted “property to which section 168 applies” for “recovery property (within the meaning of section 168)”, “class life” for “present class life”, and “168(i)(1)” for “168(g)(2)”. - § 46: Pub. L. 100–647, § 1002(a)(4)(A), substituted “168(i)(3)” for “168(j)(6)”. - § 46: Pub. L. 100–647, § 1009(a)(1), inserted provisions at end which provided that any such election shall terminate effective with respect to the 1st taxable year of the organization making such election which begins after 1986, and which defined “regular investment tax credit property”. - § 46: Pub. L. 100–647, § 1002(a)(4)(B), substituted “paragraphs (5) and (6) of section 168(h)” for “paragraphs (8) and (9) of section 168(j)”. - § 46: Pub. L. 100–647, § 1002(a)(4)(C), (D), substituted “168(h)” for “168(j)” and “168(h)(2)” for “168(j)(4)”. ## § 47: Rehabilitation credit - § 47(a): Pub. L. 100–647, § 1002(a)(26)(B), struck out at end “If, prior to a disposition to which this subsection applies, any portion of any credit is not allowable with respect to any property by reason of section 168(i)(3), such portion shall be treated (for purposes of this subparagraph) as not having been used to reduce tax liability.” - § 47(a): Pub. L. 100–647, § 1002(a)(26)(C), substituted “168(e)” for “168(c)”. - § 47(a): Pub. L. 100–647, § 1002(a)(26)(A), added cl. (v). - § 47(a): Pub. L. 100–647, § 1002(a)(27), substituted “section 168(h)(2)” for “section 168(j)(4)(C)”. - § 47(c): Pub. L. 100–647, § 1007(g)(3)(A), substituted “D, or G” for “or D”. - § 47(d)(1): Pub. L. 100–647, § 1002(a)(18), substituted “section 46(c)(8)(C)” for “section 48(c)(8)(C)”. - § 47(d)(3)(C)(i): Pub. L. 100–647, § 1002(a)(28), substituted “class life (as defined in section 168(i)(1))” for “present class life (as defined in section 168(g)(2))” and “no class life” for “no present class life”. ## § 48: Energy credit - § 48(a)(1): Pub. L. 100–647, § 1002(a)(29), which directed amendment of par. (1) by substituting “property to which section 168 applies” for “recovery property (within the meaning of section 168)” in penultimate sentence, was executed by making the substitution for “recovery property (within the meaning of section 168”, which results in retaining remaining parenthetical material and closing parenthesis. - § 48(a)(5)(A)(ii): Pub. L. 100–647, § 1002(a)(14)(A)–(C), substituted “168(h)(2)(C)” for “168(j)(4)(C)”, “168(h)(2)(A)(iii)” for “168(j)(4)(A)(iii)”, and “168(h)(2)(B)” for “168(j)(4)(B)”. - § 48(a)(5)(B): Pub. L. 100–647, § 1002(a)(14)(D), substituted “168(i)(3)” for “168(j)(6)”. - § 48(a)(5)(B): Pub. L. 100–647, § 1002(a)(14)(E), substituted “168(h)(1)(C)(ii)” for “168(j)(3)(C)(ii)”. - § 48(a)(5)(D): Pub. L. 100–647, § 1002(a)(14)(F), substituted “paragraphs (5) and (6) of section 168(h)” for “paragraphs (8) and (9) of section 168(j)”. - § 48(a)(5)(E): Pub. L. 100–647, § 1002(a)(14)(G), amended subpar. (E) generally, substituting “provision” for “provisions” and “168(h)” for “168(j)”. - § 48: Pub. L. 100–647, § 1002(a)(30), substituted “to which section 168 applies” for “which is recovery property (within the meaning of section 168)”. - § 48: Pub. L. 100–647, § 1013(a)(41), substituted “a private activity bond (within the meaning of section 141)” for “an industrial development bond (within the meaning of section 103(b)(2))”. - § 48: Pub. L. 100–647, § 1002(a)(20), redesignated subsec. (s), relating to cross reference, as (t). - § 48: Pub. L. 100–647, § 1002(a)(16)(A), added par. (9). - § 48: Pub. L. 100–647, § 1002(a)(20), redesignated subsec. (s), relating to cross reference, as (t). ## § 49: At-risk rules - § 49: Pub. L. 100–647, § 1002(e)(2), substituted “years” for “year” in heading and amended text generally. Prior to amendment, text read as follows: “The amount of the reduction of the regular investment credit under paragraph (3)— - § 49: Pub. L. 100–647, § 1002(e)(3), amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “The term ‘regular investment credit’ has the meaning given such term by section 48(o)”. - § 49: Pub. L. 100–647, § 1002(e)(8)(B), struck out subpar. (C) which related to portion of credits attributable to regular investment credit. - § 49: Pub. L. 100–647, § 1002(e)(1), amended par. (1) generally. Prior to amendment, par. (1) read as follows: “In the case of periods after December 31, 1985, section 48(q) (relating to basis adjustment to section 38 property) shall be applied with respect to transaction property— ## § 51: Amount of credit - § 51(c)(4): Pub. L. 100–647, § 4010(a), substituted “1989” for “1988”. - § 51(d)(3)(B): Pub. L. 100–647, § 4010(c)(1), substituted “age 23” for “age 25”. - § 51(d)(12): Pub. L. 100–647, § 4010(d)(1), redesignated former cls. (ii) and (iii) as (i) and (ii), respectively, and struck out former cl. (i) which provided that subsection (a) shall be applied by substituting “85 percent” for “40 percent”. - § 51(d)(12): Pub. L. 100–647, § 1017(a), substituted “subsection (a)” for “subsection (a)(1)” in cl. (i). ## § 53: Credit for prior year minimum tax liability - § 53(d)(1)(B)(ii): Pub. L. 100–647, § 1007(g)(4), substituted “current earnings” for “earnings and profits” in last sentence. - § 53(d)(1)(B)(iii): Pub. L. 100–647, § 6304(a), added cl. (iii). ## § 55: Alternative minimum tax imposed - § 55(b)(2): Pub. L. 100–647, § 1007(a)(2), inserted at end “If a taxpayer is subject to the regular tax, such taxpayer shall be subject to the tax imposed by this section (and, if the regular tax is determined by reference to an amount other than taxable income, such amount shall be treated as the taxable income of such taxpayer for purposes of the preceding sentence).” - § 55(c)(1): Pub. L. 100–647, § 1007(a)(1), inserted “and the section 936 credit allowable under section 27(b)” before period at end of first sentence. - § 55(c)(1): Pub. L. 100–647, § 1002(l)(27), substituted “subsection (j) or (k) of section 42” for “section 42(j)”. - § 55(d)(3): Pub. L. 100–647, § 1007(a)(3), inserted at end “In the case of a taxpayer described in paragraph (1)(C)(i), alternative minimum taxable income shall be increased by the lesser of (i) 25 percent of the excess of alternative minimum taxable income (determined without regard to this sentence) over $155,000, or (ii) $20,000.” ## § 56: Adjustments in computing alternative minimum taxable income - § 56(a)(1)(A)(i): Pub. L. 100–647, § 1007(b)(15), substituted “personal” for “real” in heading. - § 56(a)(1)(C)(i): Pub. L. 100–647, § 1002(a)(12), inserted “by reason of section 203, 204, or 251(d) of such Act” after “do not apply”. - § 56(a)(3): Pub. L. 100–647, § 5041(b)(4), as amended by Pub. L. 101–239, § 7815(e)(2)(A), inserted at end “The preceding sentence shall not apply to any home construction contract (as defined in section 460(e)(6)) with respect to which the requirements of clauses (i) and (ii) of section 460(e)(1)(B) are met.” - § 56(a)(3): Pub. L. 100–647, § 1007(b)(1), inserted at end “For purposes of the preceding sentence, in the case of a contract described in section 460(e)(1), the percentage of the contract completed shall be determined under section 460(b)(2) by using the simplified procedures for allocation of costs prescribed under section 460(b)(4).” - § 56(a): Pub. L. 100–647, § 1007(b)(19), added par. (8). - § 56(b)(1): Pub. L. 100–647, § 1007(b)(16), struck out “itemized” after “Limitation on” in heading. - § 56(b)(1)(C): Pub. L. 100–647, § 2004(b)(2), substituted “163(h)(5)” for “163(h)(6)”. - § 56(b)(1)(C): Pub. L. 100–647, § 1007(b)(4), substituted “specified private activity bond” for “specified activity bond” before “under”, and “57(a)(5)(B)” for “56(a)(5)(B)”. - § 56(b)(1)(C): Pub. L. 100–647, § 1007(b)(3), added cls. (iv) and (v). - § 56(b)(1)(E): Pub. L. 100–647, § 1007(b)(2), substituted “and deduction for personal exemptions not allowed” for “not allowed” in heading and amended text generally. Prior to amendment, text read as follows: “The standard deduction provided in section 63(c) shall not be allowed.” - § 56(b)(3): Pub. L. 100–647, § 1007(b)(14)(A), added par. (3). - § 56(c): Pub. L. 100–647, § 1007(b)(13)(A), substituted “adjusted current earnings” for “adjusted earnings and profits” in heading. - § 56(c): Pub. L. 100–647, § 1007(b)(13)(B), substituted “Adjusted current earnings” for “Adjusted earnings and profits” in heading. - § 56(d)(2)(A): Pub. L. 100–647, § 1007(b)(5), struck out “(other than subsection (a)(6) thereof)” after “for such year” in cl. (ii) and inserted sentence at end providing that an item of tax preference shall be taken into account under clause (ii). - § 56(e)(1): Pub. L. 100–647, § 2004(b)(3)(A), substituted “improving” for “rehabilitating” in introductory text. - § 56(e)(1): Pub. L. 100–647, § 1007(b)(6)(A)(i), inserted “qualified residence interest (as defined in section 163(h)(3)) and is” after “interest which is” in introductory text. - § 56(e)(1)(A): Pub. L. 100–647, § 2004(b)(3)(B), struck out “or is paid” after “accrues”. - § 56(e)(1)(B): Pub. L. 100–647, § 1007(b)(6)(A)(ii), substituted “section 163(h)(4)” for “section 163(h)(3)”. - § 56(e)(3): Pub. L. 100–647, § 1007(b)(6)(B), substituted “interest which is qualified residence interest (as defined in section 163(h)(3)) and is paid or accrued” for “interest paid or accrued”. - § 56: Pub. L. 100–647, § 2001(c)(3)(A), inserted at end “No adjustment shall be made under this subparagraph for the tax imposed by section 59A.” - § 56: Pub. L. 100–647, § 1007(b)(7), inserted “(otherwise eligible for the credit provided by section 901 without regard to section 901(j))” after “any such taxes”. - § 56: Pub. L. 100–647, § 1007(b)(11)(A), substituted “Treatment of taxes on dividends from 936 corporations” for “Treatment of dividends from 936 corporations” in heading and amended text generally, substituting cls. (i) to (iii) for former cls. (i) and (ii). - § 56: Pub. L. 100–647, § 6303(a), added subpar. (I) and redesignated former subpar. (I) as (J). - § 56: Pub. L. 100–647, § 1007(b)(8), inserted “for a substantial nontax purpose” after “an income statement”. - § 56: Pub. L. 100–647, § 1007(b)(9), substituted “this subsection” for “paragraph (3)(A)” in penultimate sentence. - § 56: Pub. L. 100–647, § 1007(b)(10), inserted at end “If the taxpayer has 2 or more statements described in the clause (or subclause) with the lowest number designation, the applicable financial statement shall be the one of such statements specified in regulations.” - § 56: Pub. L. 100–647, § 1007(b)(17), added cls. (vi) and (vii). - § 56: Pub. L. 100–647, § 6079(a)(1), amended last sentence generally, inserting “which is” after “any annuity contract” and “or which is described in section 72(u)(3)(C)” after “in section 403(a)”. - § 56: Pub. L. 100–647, § 1007(b)(12), inserted at end “The preceding sentence shall not apply to any annuity contract held under a plan described in section 403(a).” - § 56: Pub. L. 100–647, § 1007(b)(11)(B), substituted “clause (i)” for “clause (ii)(I)”. - § 56: Pub. L. 100–647, § 1007(b)(18), added subpar. (I). ## § 57: Items of tax preference - § 57(a)(3): Pub. L. 100–647, § 1007(b)(14)(B), struck out par. (3) which related to incentive stock options. - § 57(a)(5)(C)(i): Pub. L. 100–647, § 1007(c)(2), amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “For purposes of this part, the term ‘specified private activity bonds’ means any private activity bond (as defined in section 141) issued after August 7, 1986.” - § 57(a)(5)(C)(iii): Pub. L. 100–647, § 1007(c)(1), inserted “(whether a current or advance refunding)” after “any refunding bond”. - § 57(a)(6): Pub. L. 100–647, § 1007(c)(3), inserted “or 642(c)” after “section 170”. ## § 58: Denial of certain losses - § 58(a)(2): Pub. L. 100–647, § 1007(d)(1), struck out “(as modified by section 461(i)(4)(A))” after “section 464(c)” in subpar. (A) and substituted “section 469(c)” for “section 469(d), without regard to paragraph (1)(B) thereof” in subpar. (B). - § 58(a)(3): Pub. L. 100–647, § 1007(d)(2), substituted “469(j)(2)” for “469(g)(1)(C)”. - § 58(a): Pub. L. 100–647, § 1007(d)(3), added par. (4). - § 58(b): Pub. L. 100–647, § 1007(d)(4), added pars. (1) to (3) and struck out former pars. (1) to (3) which read as follows: ## § 59: Other definitions and special rules - § 59(a)(1): Pub. L. 100–647, § 1007(e)(3), added subpar. (D). - § 59(e)(2): Pub. L. 100–647, § 1007(e)(1), inserted “(determined without regard to section 291)” after “as a deduction”. - § 59(h): Pub. L. 100–647, § 1007(e)(2), substituted “taxable year with the adjustments of sections 56, 57, and 58” for “taxable year— - § 59(i): Pub. L. 100–647, § 1007(e)(4), inserted “(other than this part)” after “of this subtitle” and substituted “subtitle” for “title” before “solely”. - § 59(j): Pub. L. 100–647, § 1014(e)(5)(A), added subsec. (j). ## § 62: Adjusted gross income defined - § 62(a)(2)(A): Pub. L. 100–647, § 1001(b)(3)(A), inserted at end “The fact that the reimbursement may be provided by a third party shall not be determinative of whether or not the preceding sentence applies.” - § 62(a)(13): Pub. L. 100–647, § 6007(b), added par. (13). ## § 63: Taxable income defined - § 63(c)(5): Pub. L. 100–647 substituted “basic standard deduction” for “standard deduction” in heading and text. ## § 67: 2-percent floor on miscellaneous itemized deductions - § 67(b)(4): Pub. L. 100–647, § 1001(f)(2), substituted “deductions” for “deduction” and inserted before comma at end “and section 642(c) (relating to deduction for amounts paid or permanently set aside for a charitable purpose)”. - § 67(c): Pub. L. 100–647, § 4011(a), amended subsec. (c) generally. Prior to amendment subsec. (c) read as follows: “The Secretary shall prescribe regulations which prohibit the indirect deduction through pass-thru entities of amounts which are not allowable as a deduction if paid or incurred directly by an individual and which contain such reporting requirements as may be necessary to carry out the purposes of this subsection. The preceding sentence shall not apply— - § 67(c): Pub. L. 100–647, § 1001(f)(4), amended last sentence generally. Prior to amendment, last sentence read as follows: “The preceding sentence shall not apply with respect to estates, trusts, cooperatives, and real estate investment trusts.” - § 67(e): Pub. L. 100–647, § 1001(f)(3), amended subsec. (e) generally. Prior to amendment, subsec. (e) read as follows: “For purposes of this section, the adjusted gross income of an estate or trust shall be computed in the same manner as in the case of an individual, except that the deductions for costs which are paid or incurred in connection with the administration of the estate or trust and would not have been incurred if the property were not held in such trust or estate shall be treated as allowable in arriving at adjusted gross income.” - § 67(f): Pub. L. 100–647, § 1001(f)(1), added subsec. (f). ## § 72: Annuities; certain proceeds of endowment and life insurance contracts - § 72(d): Pub. L. 100–647, § 1011A(b)(2)(A), added subsec. (d). - § 72(e)(4)(A): Pub. L. 100–647, § 5012(d)(1), inserted at end “The preceding sentence shall not apply for purposes of determining investment in the contract, except that the investment in the contract shall be increased by any amount included in gross income by reason of the amount treated as received under the preceding sentence.” - § 72(e)(5)(C): Pub. L. 100–647, § 5012(a)(2), substituted “Except as provided in paragraph (10) and except to the extent” for “Except to the extent”. - § 72(e)(5)(D): Pub. L. 100–647, § 1011A(b)(9)(B), substituted “paragraph (8)” for “paragraphs (7) and (8)”. - § 72(e)(7): Pub. L. 100–647, § 1011A(b)(9)(A), struck out par. (7) which related to special rules for plans where substantially all contributions are employee contributions. - § 72(e)(8)(A): Pub. L. 100–647, § 1011A(b)(9)(C), struck out “(other than paragraph (7))” after “this subsection”. - § 72(e)(9): Pub. L. 100–647, § 1011A(b)(2)(B), struck out par. (9) which related to treatment of employee contributions as separate contract. - § 72(e)(10): Pub. L. 100–647, § 5012(a)(1), added par. (10). - § 72(e)(11): Pub. L. 100–647, § 5012(d)(2), added par. (11). - § 72(f): Pub. L. 100–647, § 1011A(b)(1)(A), struck out “for purposes of subsections (d)(1) and (e)(7), the consideration for the contract contributed by the employee,” after “contract,” in introductory provisions. - § 72(n): Pub. L. 100–647, § 1011A(b)(1)(B), substituted “Subsection (b)” for “Subsections (b) and (d)”. - § 72(o)(2): Pub. L. 100–647, § 1011A(c)(8), struck out par. (2) which related to additional tax if amount received before age 59½. - § 72(p)(3)(A): Pub. L. 100–647, § 1011A(h)(1), inserted “to which paragraph (1) does not apply by reason of paragraph (2) during the period” after “loan”. - § 72(p)(3)(B): Pub. L. 100–647, § 1011A(h)(2), substituted “Period” for “Loans” in heading and amended text generally. Prior to amendment, text read as follows: “For purposes of subparagraph (A), a loan is described in this subparagraph— - § 72(q)(2)(B): Pub. L. 100–647, § 1018(t)(1)(B), substituted “subsection (s)(6)(B))” for “subsection (s)(6)(B)))”. - § 72(q)(2)(D): Pub. L. 100–647, § 1011A(c)(7), inserted “designated” before “beneficiary”. - § 72(q)(2)(D): Pub. L. 100–647, §§ 1011A(c)(4), 1018(u)(8), amended subpar. (D) identically, substituting a comma for period at end. - § 72(q)(2)(E): Pub. L. 100–647, § 1011A(b)(9)(D), struck out “(determined without regard to subsection (e)(7))” after “subsection (e)(5)(D)”. - § 72(q)(2)(G): Pub. L. 100–647, § 1011A(c)(4), substituted a comma for period at end. - § 72(q)(2)(H): Pub. L. 100–647, § 1011A(c)(6), added subpar. (H). - § 72(q)(3)(B): Pub. L. 100–647, § 1011A(c)(5), substituted “taxpayer” for “employee” in cls. (i) and (ii). - § 72(s)(5): Pub. L. 100–647, § 1018(k)(2), substituted “certain annuity contracts” for “annuity contracts which are part of qualified plans” in heading. - § 72(s)(5)(D): Pub. L. 100–647, § 1018(k)(1), added subpar. (D). - § 72(s)(7): Pub. L. 100–647, § 1018(t)(1)(A), substituted “primary annuitant” for “primary annuity”. - § 72(t)(2)(A)(iv): Pub. L. 100–647, § 1011A(c)(7), inserted “designated” before “beneficiary”. - § 72(t)(2)(A)(v): Pub. L. 100–647, § 1011A(c)(1), struck out “on account of early retirement under the plan” after “separation from service”. - § 72(t)(2)(C): Pub. L. 100–647, § 1011A(c)(2), substituted “Exceptions for distributions from employee stock ownership plans” for “Certain plans” in heading and amended text generally. Prior to amendment, text read as follows: - § 72(t)(3)(A): Pub. L. 100–647, § 1011A(c)(3), substituted “(C), and (D)” for “and (C)”. - § 72(u)(1)(A): Pub. L. 100–647, § 1011A(i)(1), inserted “(other than subchapter L)” after “subtitle”. - § 72(u)(3)(D): Pub. L. 100–647, § 1011A(i)(3), substituted “is purchased” for “which is purchased” and “is held” for “which is held”. - § 72(u)(3)(D): Pub. L. 100–647, § 1011A(i)(2), substituted “until all amounts under such contract are distributed to the employee for whom such contract was purchased or the employee’s beneficiary” for “until such time as the employee separates from service”. - § 72(u)(3)(E): Pub. L. 100–647, § 1011A(i)(3), substituted “is” for “which is”. - § 72(u)(4)(C): Pub. L. 100–647, § 1011A(i)(4), added subpar. (C). - § 72(v), § 72(w): Pub. L. 100–647, § 5012(b)(1), added subsec. (v) and redesignated former subsec. (v) as (w). ## § 79: Group-term life insurance purchased for employees - § 79(c): Pub. L. 100–647 struck out at end “In the case of an employee who has attained age 64, the cost prescribed shall not exceed the cost with respect to such individual if he were age 63.” ## § 86: Social security and tier 1 railroad retirement benefits - § 86(b)(2)(A): Pub. L. 100–647, § 6009(c)(1), inserted “135,” before “911”. - § 86(f)(4), § 86(f): Pub. L. 100–647, § 1001(e), redesignated par. (5) as (4) and struck out former par. (4) which read as follows: “section 221(b)(2) (defining earned income), and”. ## § 103: Interest on State and local bonds - § 103(b): Pub. L. 100–647, § 1013(c)(12)(A), amended subpar. (N), as in effect on the day before the date of the enactment of Pub. L. 99–514 [Oct. 22, 1986], by redesignating cls. (ii) and (iii) as (iii) and (iv), respectively, and by striking out cl. (i) and inserting in lieu thereof the following new cls.: - § 103(c): Pub. L. 100–647, § 1013(a)(34)(A), amended par. (7), as in effect on the day before the date of the enactment of Pub. L. 99–514 [Oct. 22, 1986], by substituting “necessary” for “necessary”. ## § 106: Contributions by employer to accident and health plans - § 106: Pub. L. 100–647, § 3011(b)(1), amended section generally, substituting a single undesignated par. for former subsec. (a) providing that gross income does not include employer-provided coverage under an accident or health plan and subsec. (b) providing for an exception for highly compensated individuals where a plan fails to provide certain continuation coverage. - § 106(b)(1): Pub. L. 100–647, § 1018(t)(7)(A), substituted “any employer-provided coverage” for “any amount contributed by an employer” and “under a group” for “to a group”. ## § 108: Income from discharge of indebtedness - § 108(a)(1)(C): Pub. L. 100–647, § 1004(a)(1), added subpar. (C). - § 108(a)(2): Pub. L. 100–647, § 1004(a)(2), amended par. (2) generally. Prior to amendment, par. (2) read as follows: “Subparagraph (B) of paragraph (1) shall not apply to a discharge which occurs in a title 11 case.” - § 108(b): Pub. L. 100–647, § 1004(a)(3), struck out “in title 11 case or insolvency” after “Reduction of tax attributes” in heading and substituted “subparagraph (A), (B), or (C)” for “subparagraph (A) or (B)” in text of par. (1). - § 108(d): Pub. L. 100–647, § 1004(a)(6)(B), which directed amendment of subsec. (d) heading by substituting “subsections (a), (b), and (g)” for “subsections (a), and (b)”, was executed by making the substitution for “subsections (a) and (b)” as the probable intent of Congress. - § 108(d)(6): Pub. L. 100–647, § 1004(a)(6)(A), (C), substituted “Subsections (a), (b), and (g)” for “Subsections (a) and (b)” in heading and “subsections (a), (b), and (g)” for “subsections (a) and (b)” in text. - § 108(d)(7)(A): Pub. L. 100–647, § 1004(a)(6)(A), (C), substituted “Subsections (a), (b), and (g)” for “Subsections (a) and (b)” in heading and “subsections (a), (b), and (g)” for “subsections (a) and (b)” in text. - § 108(g): Pub. L. 100–647, § 1004(a)(4), substituted “indebtedness” for “indebtedness of solvent farmers” in heading and amended text generally. Prior to amendment, text read as follows: ## § 117: Qualified scholarships - § 117(d)(4): Pub. L. 100–647, § 1011B(a)(31)(B), substituted “there shall” for “there may” and “who are” for “who may be”. - § 117(d)(5): Pub. L. 100–647, § 4001(b)(2), added par. (5). ## § 119: Meals or lodging furnished for the convenience of the employer - § 119(d): Pub. L. 100–647 struck out “(as of the close of the calendar year in which the taxable year begins)” after “appraised value” in par. (2)(A)(i) and inserted at end “The appraised value under subparagraph (A)(i) shall be determined as of the close of the calendar year in which the taxable year begins, or, in the case of a rental period not greater than 1 year, at any time during the calendar year in which such period begins.” as concluding provision. ## § 121: Exclusion of gain from sale of principal residence - § 121(d)(9): Pub. L. 100–647 added par. (9). ## § 125: Cafeteria plans - § 125(a): Pub. L. 100–647, § 1011B(a)(11)(A), amended subsec. (a) generally, see Codification note above. Prior to amendment, subsec. (a) read as follows: “In the case of a cafeteria plan— - § 125(b)(1): Pub. L. 100–647, § 1011B(a)(11)(B), substituted “In the case of a highly compensated employee, subsection (a) shall not apply to any benefit attributable to a plan year” for “A plan shall be treated as failing to meet the requirements of this subsection”, see Codification note above. - § 125(b)(2): Pub. L. 100–647, § 1011B(a)(11)(C), substituted “subsection (a) shall not apply to any plan year” for “a plan shall be treated as failing to meet the requirements of this subsection” in first sentence, see Codification note above. - § 125(b)(2): Pub. L. 100–647, § 1011B(a)(13)(B), substituted “shall not include benefits which (without regard to this paragraph) are includible in gross income” for “shall be determined without regard to the last sentence of subsection (e)”, see Codification note above. - § 125(c): Pub. L. 100–647, § 1011B(a)(12), amended subpar. (B) generally, see Codification note above. Prior to amendment, subpar. (B) read as follows: “the participants may choose— - § 125(c): Pub. L. 100–647, § 1018(t)(6), inserted “or rural electric cooperative plan (within the meaning of section 401(k)(7))” after “stock bonus plan”, see Codification note above. - § 125(c): Pub. L. 100–647, § 6051(b), inserted at end “In applying section 89 to a plan described in this subparagraph, contributions under the plan shall be tested as of the time the contributions were made.”, see Codification note above. - § 125(e)(1): Pub. L. 100–647, § 1011B(a)(13)(A), inserted “and without regard to section 89(a)” after “subsection (a)”, see Codification note above. - § 125(e)(2): Pub. L. 100–647, § 4002(b)(2), inserted “or any insurance under a qualified group legal services plan the value of which is so includable only because it exceeds the limitation of section 120(a)” after “section 79”, see Codification note above. ## § 127: Educational assistance programs - § 127(b)(2): Pub. L. 100–647, § 1011B(a)(31)(B), substituted “there shall” for “there may” and “who are” for “who may be” in last sentence. - § 127(c)(1): Pub. L. 100–647, § 4001(b)(1), inserted at end “The term ‘educational assistance’ also does not include any payment for, or the provision of any benefits with respect to, any graduate level course of a kind normally taken by an individual pursuing a program leading to a law, business, medical, or other advanced academic or professional degree.” - § 127(d): Pub. L. 100–647, § 4001(a), substituted “1988” for “1987”. ## § 129: Dependent care assistance programs - § 129(a)(2): Pub. L. 100–647, § 1011B(c)(2)(A), amended par. (2) generally. Prior to amendment, par. (2) read as follows: “The aggregate amount excluded from the gross income of the taxpayer under this section for any taxable year shall not exceed $5,000 ($2,500 in the case of a separate return by a married individual).” - § 129(d)(1): Pub. L. 100–647, § 1011B(a)(30), substituted “(7)” for “(6)”, see Codification note above. - § 129(d)(3): Pub. L. 100–647, § 1011B(a)(31)(A)(i), struck out at end “For purposes of this paragraph, there may be excluded from consideration employees who may be excluded from consideration under section 89(h).” - § 129(d)(7): Pub. L. 100–647, § 1011B(a)(14), redesignated par. (8) as (7). - § 129(d)(7): Pub. L. 100–647, § 1011B(a)(15)(A), inserted “under all plans of the employer” after second and third reference to “employees”. - § 129(d)(7): Pub. L. 100–647, § 3021(a)(14), struck out “(within the meaning of section 414(q)(7))” after “whose compensation” and inserted at end “For purposes of this subparagraph, the term ‘compensation’ has the meaning given such term by section 414(q)(7), except that, under rules prescribed by the Secretary, an employer may elect to determine compensation on any other basis which does not discriminate in favor of highly compensated employees.” - § 129(d)(7): Pub. L. 100–647, § 1011B(a)(15)(B), (C), substituted “a plan may disregard” for “there shall be disregarded” and “414(q)(7)” for “415(q)(7)”. - § 129(d)(8): Pub. L. 100–647, § 1011B(a)(31)(A)(ii), added par. (8). Former par. (8) redesignated (7). - § 129(e)(6): Pub. L. 100–647, § 1011B(a)(18), inserted “(other than paragraphs (4) and (7) thereof)” after “subsection (d)”. - § 129(e)(8): Pub. L. 100–647, § 1011B(c)(1), in introductory provisions, inserted “maintained by an employer” after “onsite facility” and “of dependent care assistance provided to an employee” after “the amount”, in subpar. (A), inserted “of the facility by a dependent of the employee” after “utilization”, and in subpar. (B), inserted “with respect to such dependent” after “provided”. ## § 130: Certain personal injury liability assignments - § 130(c): Pub. L. 100–647, in par. (2), redesignated subpars. (D) and (E) as (C) and (D), respectively, struck out former subpar. (C) which provided that the assignee does not provide to the recipient of such payments rights against the assignee which are greater than those of a general creditor, and as concluding provisions, inserted at end “The determination for purposes of this chapter of when the recipient is treated as having received any payment with respect to which there has been a qualified assignment shall be made without regard to any provision of such assignment which grants the recipient rights as a creditor greater than those of a general creditor.” ## § 132: Certain fringe benefits - § 132(h)(1): Pub. L. 100–647, § 1011B(a)(31)(B), substituted “there shall” for “there may be” and “who are” for “who may be” in last sentence. - § 132(h): Pub. L. 100–647, § 6066(a), added par. (8). ## § 134: Certain military benefits - § 134(b)(1): Pub. L. 100–647, § 1011B(f)(2)(A), inserted “(other than personal use of a vehicle)” after “in-kind benefit” in introductory text. - § 134(b)(1)(B): Pub. L. 100–647, § 1011B(f)(1), substituted “, regulation, or administrative practice” for “or regulation thereunder”. - § 134(b)(3)(A): Pub. L. 100–647, § 1011B(f)(3), struck out “under any provision of law or regulation described in paragraph (1)” after “September 9, 1986,”. ## § 135: Income from United States savings bonds used to pay higher education tuition and fees - Enacted 26 U.S.C. § 135. ## § 140: Cross references to other Acts - § 140: Pub. L. 100–647 renumbered section 135 of this title as this section. ## § 141: Private activity bond; qualified bond - § 141(b)(5)(B): Pub. L. 100–647 substituted “cause a bond” for “cause bond”. ## § 142: Exempt facility bond - § 142(a)(11): Pub. L. 100–647, § 6180(a), added par. (11). - § 142(b)(1)(B)(ii): Pub. L. 100–647, § 1013(a)(39), inserted “section” before “168(i)(3)”. - § 142(c): Pub. L. 100–647, § 6180(b)(2), substituted “mass commuting facilities and high-speed intercity rail facilities” for “and mass commuting facilities” in heading and substituted “paragraph (1), (2), (3) or (11) of subsection (a)” for “paragraph (1), (2), or (3) of subsection (a)” in par. (1) and in introductory text of par. (2). - § 142(d)(4)(B)(iii): Pub. L. 100–647, § 1013(a)(1), substituted “average gross rent” for “average rent”. - § 142(i): Pub. L. 100–647, § 6180(b)(1), added subsec. (i). ## § 143: Mortgage revenue bonds: qualified mortgage bond and qualified veterans’ mortgage bond - § 143(a)(1): Pub. L. 100–647, § 4005(a)(1), substituted “1989” for “1988” in heading and in text. - § 143(a)(2)(A): Pub. L. 100–647, § 4005(f), inserted sentence at end relating to application of cl. (iv). - § 143(a)(2)(A)(ii): Pub. L. 100–647, § 4005(g)(1), substituted “(i), and (m)(7)” for “and (i)”. - § 143(a)(2)(A)(iii): Pub. L. 100–647, § 1013(a)(2), substituted “such issue does not meet” for “no bond which is part of such issue meets”. - § 143(a)(2)(A)(iv): Pub. L. 100–647, § 4005(f), added cl. (iv). - § 143(a)(2)(C): Pub. L. 100–647, § 4005(g)(2)(B), substituted “, (h), and (m)(7)” for “and (h)” in introductory text. - § 143(a)(2)(D): Pub. L. 100–647, § 4005(e), added subpar. (D). - § 143(b)(4): Pub. L. 100–647, § 1013(a)(3), inserted “is part of an issue which” after “which”. - § 143(f)(5): Pub. L. 100–647, § 4005(b), added par. (5). - § 143(f)(6): Pub. L. 100–647, § 4005(c), added par. (6). - § 143(g)(1): Pub. L. 100–647, § 4005(d)(1), substituted “paragraph (2) of this subsection and, in the case of an issue described in subsection (b)(1), such issue also meets the requirements of paragraph (3) of this subsection” for “paragraphs (2) and (3) of this subsection” and struck out “(other than subsection (f) thereof)” before period at end. - § 143(g)(2)(B)(iv): Pub. L. 100–647, § 4005(g)(6), inserted at end “The Secretary may by regulation adjust the mortgage prepayment rate otherwise used in determining the effective rate of interest to the extent the Secretary determines that such an adjustment is appropriate by reason of the impact of subsection (m).” - § 143(m): Pub. L. 100–647, § 4005(g)(1), added subsec. (m). ## § 144: Qualified small issue bond; qualified student loan bond; qualified redevelopment bond - § 144(a)(12)(A): Pub. L. 100–647, § 1013(a)(4)(B)(ii), inserted sentence at end that for purposes of cl. (ii)(I), average maturity be determined in accordance with section 147(b)(2)(A). - § 144(a)(12)(A)(ii): Pub. L. 100–647, § 1013(a)(4)(A), inserted “(or series of bonds)” before “issued to refund” in introductory text. - § 144(a)(12)(A)(ii)(I): Pub. L. 100–647, § 1013(a)(4)(B)(i), amended subcl. (I) generally. Prior to amendment, subcl. (I) read as follows: “the refunding bond has a maturity date not later than the maturity date of the refunded bond,”. - § 144(a)(12)(A)(ii)(III), § 144(a)(12)(A)(ii): Pub. L. 100–647, § 1013(a)(4)(C), redesignated subcl. (IV) as (III) and struck out former subcl. (III) which provided that this subsection apply when the interest rate on the refunding bond is lower than the interest rate on the refunded bond. - § 144(a)(12)(C): Pub. L. 100–647, § 6176(a), inserted sentence at end defining “manufacturing facility”. - § 144(b)(1): Pub. L. 100–647, § 1013(a)(5), in subpar. (B) struck out “to which part B of title IV of the Higher Education Act of 1965 (relating to guaranteed student loans) does not apply” after “by the State”, substituted “of the Higher Education Act of 1965” for “of such Act”, amended last sentence generally, and inserted a new flush sentence at end of par. (1). Prior to amendment, last sentence of subpar. (B) read as follows: “A bond issued as part of an issue shall be treated as a qualified student loan bond only if no bond which is part of such issue meets the private business tests of paragraphs (1) and (2) of section 141(b).” ## § 145: Qualified 501(c)(3) bond - § 145(b)(2)(B)(ii)(I): Pub. L. 100–647, § 1013(a)(6), substituted “section 103(b)(2)” for “section 103(b)”. - § 145(b)(2)(C)(i): Pub. L. 100–647, § 1013(a)(7), substituted “subparagraph (B)” for “subparagraph (B)(ii)”. - § 145(b)(4): Pub. L. 100–647, § 1013(a)(8), substituted “subparagraphs (C), (D), and (E)” for “subparagraphs (C) and (D)”. - § 145(d), § 145(e): Pub. L. 100–647, § 5053(a), added subsec. (d) and redesignated former subsec. (d) as (e). ## § 146: Volume cap - § 146(d)(4)(B): Pub. L. 100–647, § 1013(a)(40), substituted “respect to a” for “respect a”. - § 146(f)(5)(A): Pub. L. 100–647, § 1013(a)(9), amended subpar. (A) generally, as in effect before amendment by Pub. L. 100–203. Before amendment by Pub. L. 100–203, subpar. (A) read as follows: “the purpose of issuing bonds referred to in one of the clauses of section 141(d)(1)(A),”. - § 146(g)(3): Pub. L. 100–647, § 6180(b)(3), added par. (3) relating to exempt facility bonds issued as part of an issue described in par. (11) of section 142(a). - § 146(i)(2)(A): Pub. L. 100–647, § 1013(a)(28)(A), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “the maturity date of the bond to be refunded, or”. - § 146(i)(3)(A): Pub. L. 100–647, § 1013(a)(28)(B), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “the maturity date of the bond to be refunded, or”. - § 146(i)(4), § 146(i)(5): Pub. L. 100–647, § 1013(a)(28)(C), added par. (4) and redesignated former par. (4) as (5). - § 146(k)(1): Pub. L. 100–647, § 1013(a)(10)(A), substituted “paragraphs (2) and (3)” for “paragraph (2)”. - § 146(k)(3): Pub. L. 100–647, § 1013(a)(10)(B), added par. (3). ## § 147: Other requirements applicable to certain private activity bonds - § 147(c)(3): Pub. L. 100–647, § 6180(b)(4), inserted “high-speed intercity rail facility” after “mass commuting facility” in introductory text and in subpar. (A). - § 147(e): Pub. L. 100–647, § 1013(a)(11), struck out “treated as” after “shall not be”. - § 147(f)(2)(D): Pub. L. 100–647, § 1013(a)(29), substituted “the average maturity date of the issue of which the refunding bond is a part is later than the average maturity date of the bonds to be refunded by such issue. For purposes of the preceding sentence, average maturity shall be determined in accordance with subsection (b)(2)(A)” for “the maturity date of such bond is later than the maturity date of the bond to be refunded”. - § 147(f)(2)(E)(i): Pub. L. 100–647, § 1013(a)(36), inserted sentence at end relating to treatment of an individual appointed to fill a vacancy in the office of an elected official. - § 147(f)(3): Pub. L. 100–647, § 6180(b)(5), inserted “or high-speed intercity rail facilities” after “airports” in heading and after “airport” in subpars. (A) and (B) and in last sentence. - § 147(f)(4): Pub. L. 100–647, § 1013(a)(12), added par. (4). - § 147(g)(1): Pub. L. 100–647, § 1013(a)(13)(A), substituted “proceeds” for “aggregate face amount”. - § 147(g)(2): Pub. L. 100–647, § 1013(a)(13)(B), substituted “proceeds” for “aggregate authorized face amount” and “do” for “does”. ## § 148: Arbitrage - § 148(b)(2): Pub. L. 100–647, § 1013(a)(43)(B), struck out at end “Such term shall not include any tax-exempt bond.” - § 148(b)(2)(E): Pub. L. 100–647, § 5053(b), added subpar. (E). - § 148(b)(3): Pub. L. 100–647, § 1013(a)(43)(A), added par. (3). - § 148(d)(2): Pub. L. 100–647, § 1013(a)(14), substituted “any reserve or replacement fund” for “any fund described in paragraph (1)”. - § 148(f)(1): Pub. L. 100–647, § 4005(d)(2), struck out “qualified mortgage bond or” after “apply to any”. - § 148(f)(3): Pub. L. 100–647, § 6177(b), inserted at end “In the case of a tax and revenue anticipation bond, the last installment shall not be required to be made before the date 8 months after the date of issuance of the issue of which the bond is a part.” - § 148(f)(3): Pub. L. 100–647, § 1013(a)(15), inserted “A series of issues which are redeemed during a 6-month period (or such longer period as the Secretary may prescribe) shall be treated (at the election of the issuer) as 1 issue for purposes of the preceding sentence if no bond which is part of any issue in such series has a maturity of more than 270 days or is a private activity bond.” - § 148(f)(4)(A): Pub. L. 100–647, § 6181(a), (b), struck out “unless the issuer otherwise elects,” before “any amount earned” in cl. (ii) and inserted at end of subpar. (A) “In the case of an issue no bond of which is a private activity bond, clause (ii) shall be applied without regard to the dollar limitation therein if the average maturity of the issue (determined in accordance with section 147(b)(2)(A)) is at least 5 years and the rates of interest on bonds which are part of the issue do not vary during the term of the issue.” - § 148(f)(4)(B)(iii)(I): Pub. L. 100–647, § 1013(a)(16)(A), substituted “proceeds” for “aggregate face amount”. - § 148(f)(4)(B)(iii)(III): Pub. L. 100–647, § 6177(a), substituted “the earlier of the date 6 months after such date of issuance.” for “the earliest of the maturity date of the issue, the date 6 months after such date of issuance,”. - § 148(f)(4)(C): Pub. L. 100–647, § 1013(a)(17)(A), in heading substituted “governmental units issuing $5,000,000 or less of bonds” for “small governmental units”, designated existing provision as cl. (i), inserted heading “In general”, redesignated existing cls. (i) to (iv) as subcls. (I) to (IV) and realigned their margins, struck out last sentence providing that cl. (iv) not take into account any bond which is not outstanding at the time of a later issue or which is redeemed, other than in an advance refunding, from the net proceeds of the later issue, and added cls. (ii) to (vi). - § 148(f)(4)(C)(i): Pub. L. 100–647, § 1013(a)(17)(B), struck out “(and all subordinate entities thereof)” after “such unit”. - § 148(f)(4)(C)(ii): Pub. L. 100–647, § 6183(a), added subcl. (II) and redesignated former subcls. (II) and (III) as (III) and (IV), respectively. - § 148(f)(4)(D)(i): Pub. L. 100–647, § 1013(a)(18), inserted “for a program” before “described in section 144(b)(1)(A)” in introductory text, substituted “such program” for “such a program” in subcl. (I), and inserted at end “Amounts designated as interest on student loans shall not be taken into account in determining whether the issuer is reimbursed for such costs. Except as otherwise hereafter provided in regulations prescribed by the Secretary, costs described in subclause (I) paid from amounts earned as described in the first sentence of this clause may also be taken into account in determining the yield on the student loans under a program described in section 144(b)(1)(A).” - § 148(f)(7)(B): Pub. L. 100–647, § 1013(a)(19), substituted “not due” for “due to reasonable cause and not”. ## § 149: Bonds must be registered to be tax exempt; other requirements - § 149(b)(3)(A)(iii): Pub. L. 100–647, § 1013(a)(20), struck out “with respect to any bond issued before July 1, 1989” after “1984”. - § 149(b)(4)(A): Pub. L. 100–647, § 1013(a)(21), substituted “and a qualified student loan bond” for “a qualified student loan bond, and a qualified redevelopment bond”. - § 149(e)(3): Pub. L. 100–647, § 1013(a)(22), substituted “the failure to file in a timely fashion is not due to willful neglect” for “there is reasonable cause for the failure to file such statement in a timely fashion”. - § 149(f): Pub. L. 100–647, § 5051(a), added subsec. (f). ## § 150: Definitions and special rules - § 150(b)(1)(A): Pub. L. 100–647, § 1013(a)(23)(C), inserted “tax-exempt” before “qualified mortgage bond”. - § 150(b)(1)(A): Pub. L. 100–647, § 1013(a)(30), inserted before period at end “and before the date such residence is again the principal residence of at least 1 of the mortgagors who received such financing”. - § 150(b)(2): Pub. L. 100–647, § 1013(a)(32), inserted at end “If the provisions of prior law corresponding to section 142(d) apply to a refunded bond, such provisions shall apply (in lieu of section 142(d)) to the refunding bond.” - § 150(b)(2)(A): Pub. L. 100–647, § 1013(a)(31), substituted “described in paragraph” for “described paragraph”. - § 150(b)(4): Pub. L. 100–647, § 1013(a)(23)(A), (B), inserted “and small issue bonds” after “bonds” in heading, and “or a qualified small issue bond” before period at end of subpar. (B). - § 150(b)(6): Pub. L. 100–647, § 1013(a)(33), added par. (6). - § 150(e)(1)(B): Pub. L. 100–647, § 6182(b), inserted “(including land which is functionally related and subordinate thereto)” after “a firehouse”. - § 150(e)(2): Pub. L. 100–647, § 6182(a), inserted at end “For purposes of subparagraph (A), other firefighting services provided in an area shall be disregarded in determining whether an organization is a qualified volunteer fire department if such other firefighting services are provided by a qualified volunteer fire department (determined with the application of this sentence) and such organization and the provider of such other services have been continuously providing firefighting services to such area since January 1, 1981.” - § 150(e)(3): Pub. L. 100–647, § 1013(a)(24)(A), added par. (3). ## § 151: Allowance of deductions for personal exemptions - § 151(c): Pub. L. 100–647 inserted “who has not attained the age of 24 at the close of such calendar year” after “student”. ## § 162: Trade or business expenses - § 162(i): Pub. L. 100–647, § 3011(b)(2), redesignated par. (3) as (2) and struck out former par. (2) which required plans to provide continuation coverage to certain individuals. - § 162(k): Pub. L. 100–647, § 3011(b)(3), redesignated subsec. (l), relating to stock redemption expenses, as (k) and struck out former subsec. (k) which related to continuation coverage requirements of group health plans. - § 162(k): Pub. L. 100–647, § 1018(t)(7)(B), made amendment identical to Pub. L. 99–509, § 9307(c)(2)(B), which amended directory language of Pub. L. 99–514, § 1895(d)(5)(A), by substituting “section 162(k)(5)” for “section 162(k)(2)”. See 1986 Amendment note below. - § 162(l): Pub. L. 100–647, § 3011(b)(3)(A), (B), redesignated subsec. (m), relating to special rules for health insurance costs of self-employed individuals, as (l). Former subsec. (l), relating to stock redemption expenses, redesignated (k). - § 162(m): Pub. L. 100–647, § 3011(b)(3)(B), (C), redesignated subsec. (n), relating to cross references, as (m). Former subsec. (m), relating to special rules for health insurance costs of self-employed individuals, redesignated (l). - § 162(m): Pub. L. 100–647, § 1011B(b)(2), redesignated subsec. (m), relating to cross references, as (n). - § 162(m)(2)(A): Pub. L. 100–647, § 1011B(b)(3), inserted “derived by the taxpayer from the trade or business with respect to which the plan providing the medical care coverage is established” after “401(c))”. - § 162(m)(4), § 162(m)(5): Pub. L. 100–647, § 1011B(b)(1), added par. (4) and redesignated former par. (4) as (5). - § 162(n): Pub. L. 100–647, § 3011(b)(3)(C), redesignated subsec. (n) as (m). - § 162(n): Pub. L. 100–647, § 1011B(b)(2), redesignated subsec. (m), relating to cross references, as (n). ## § 163: Interest - § 163(d)(3)(A): Pub. L. 100–647, § 1005(c)(1), substituted “properly allocable to” for “incurred or continued to purchase or carry”. - § 163(d)(4)(B): Pub. L. 100–647, § 1005(c)(2), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “The term ‘investment income’ means the sum of— - § 163(d): Pub. L. 100–647, § 1005(c)(3), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “The amount of interest disallowed under this subsection for any such taxable year shall be equal to the sum of— - § 163(e)(2)(B): Pub. L. 100–647, § 1006(u)(1), substituted “paragraph (7)” for “paragraph (6)”. - § 163(h)(2)(A): Pub. L. 100–647, § 1005(c)(4), substituted “properly allocable to” for “incurred or continued in connection with the conduct of”. - § 163(h)(2)(E): Pub. L. 100–647, § 1005(c)(12), inserted “or under section 6166A (as in effect before its repeal by the Economic Recovery Tax Act of 1981)” before period at end. - § 163(h)(3)(C): Pub. L. 100–647, § 1005(c)(5), effective as if enacted immediately before enactment of Pub. L. 100–203 (see 1987 Amendment note below), amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: “The amount under subparagraph (B)(ii)(I) at any time after August 16, 1986, shall not be less than the outstanding aggregate principal amount (as of such time) of indebtedness which was incurred on or before August 16, 1986, and which was secured by the qualified residence on August 16, 1986.” - § 163(h)(4): Pub. L. 100–647, § 1005(c)(6)(A), effective as if enacted immediately before enactment of Pub. L. 100–203 (redesignating par. (5) as (4), see 1987 Amendment note below), amended heading by substituting “Other definitions and special rules—For purposes of this subsection—” for “Other definitions and special rules”. - § 163(h)(4)(A): Pub. L. 100–647, § 1005(c)(6)(B)(i), (7), effective as if enacted immediately before enactment of Pub. L. 100–203 (redesignating par. (5) as (4), see 1987 Amendment note below), amended subpar. (A) by striking out “For purposes of this subsection—” after “Qualified residence” in introductory provisions, “used or” after “Residence not” in cl. (iii) heading, and “or use” after “does not rent” in cl. (iii) text. - § 163(h)(4)(B): Pub. L. 100–647, § 1005(c)(6)(B)(ii), effective as if enacted immediately before enactment of Pub. L. 100–203 (redesignating par. (5) as (4), see 1987 Amendment note below), amended subpar. (B) by substituting “Any” for “For purposes of this paragraph, any”. - § 163(h)(4)(C), § 163(h)(4)(D): Pub. L. 100–647, § 1005(c)(8), effective as if enacted immediately before enactment of Pub. L. 100–203 (redesignating par. (5) as (4), see 1987 Amendment note below), par. (4) added subpars. (C) and (D). - § 163(h)(5): Pub. L. 100–647, § 2004(b)(1), redesignated par. (6) as (5). - § 163(h): Pub. L. 100–647, § 2004(b)(1), redesignated par. (6) as (5). - § 163(h): Pub. L. 100–647, § 1005(c)(9), substituted “but for this paragraph” for “but for this subsection”. - § 163(i)(2): Pub. L. 100–647, § 1009(b)(6), made technical correction to directory language of Pub. L. 99–514, § 902(e)(1), see 1986 Amendment note below. ## § 164: Taxes - § 164(a): Pub. L. 100–647 substituted “The GST” for “the GST”. ## § 165: Losses - § 165(l)(5), § 165(l)(6), § 165(l)(7): Pub. L. 100–647 added pars. (5) and (6), redesignated former par. (6) as (7), and struck out former par. (5) which read as follows: “Election.—Any election by the taxpayer under this subsection may be revoked only with the consent of the Secretary and shall apply to all losses of the taxpayer on deposits in the institution with respect to which such election was made.” ## § 166: Bad debts - § 166(d)(1)(A): Pub. L. 100–647, § 1008(d)(1), substituted “subsection (a)” for “subsections (a) and (c)”. - § 166(f), § 166: Pub. L. 100–647, § 1008(d)(2), made clarifying amendment to directory language of Pub. L. 99–514, § 805(b), see 1986 Amendment note below. ## § 167: Depreciation - § 167(a): Pub. L. 100–647, § 1002(a)(24), struck out at end “In the case of recovery property (within the meaning of section 168), the deduction allowable under section 168 shall be deemed to constitute the reasonable allowance provided by this section, except with respect to that portion of the basis of such property to which subsection (k) applies.” - § 167(d): Pub. L. 100–647, § 1002(a)(31), substituted “property to which section 168 applies” for “recovery property defined in section 168”. - § 167: Pub. L. 100–647, § 1002(a)(22), substituted “section 168(i)(9)(B)” for “section 168(e)(3)(C)” in last sentence. - § 167: Pub. L. 100–647, § 1002(i)(1), added subsec. (r) and redesignated former subsec. (r) as (s). ## § 168: Accelerated cost recovery system - § 168(b)(2): Pub. L. 100–647, § 1002(a)(11)(A), substituted “150 percent declining balance method in certain cases” for “15-year and 20-year property” in heading and amended text generally. Prior to amendment, text read as follows: “In the case of 15-year and 20-year property, paragraph (1) shall be applied by substituting ‘150 percent’ for ‘200 percent’.” - § 168(b)(2)(B), § 168(b)(2)(C): Pub. L. 100–647, § 6028(a), added subpar. (B) and redesignated former subpar. (B) as (C). - § 168(b)(3)(C): Pub. L. 100–647, § 1002(i)(2)(B)(i), added subpar. (C). Former subpar. (C) redesignated (D). - § 168(b)(3)(D): Pub. L. 100–647, § 6029(b), added subpar. (D) relating to property described in subsec. (e)(3)(D)(ii). - § 168(b)(3)(D): Pub. L. 100–647, § 1002(i)(2)(B)(i), redesignated subpar. (C), relating to property with respect to which the taxpayer elects under par. (5), as (D). - § 168(b)(5): Pub. L. 100–647, § 1002(i)(2)(B)(ii), substituted “paragraph (3)(D)” for “paragraph (3)(C)”. - § 168(b)(5): Pub. L. 100–647, § 1002(a)(11)(B), substituted “paragraph (2)(B) or (3)(C)” for “paragraph (3)(C)”. - § 168(c): Pub. L. 100–647, § 1002(a)(11)(C), amended subsec. (c) generally, designating existing provisions as par. (1) and adding par. (2). - § 168(c): Pub. L. 100–647, § 1002(i)(2)(A), inserted table item relating to any railroad grading or tunnel bore. - § 168(d)(2)(C): Pub. L. 100–647, § 1002(i)(2)(D), added subpar. (C). - § 168(d)(3)(A)(i): Pub. L. 100–647, § 1002(a)(5), struck out “and which are” after “this section applies”. - § 168(d)(3)(B): Pub. L. 100–647, § 1002(a)(23)(A), struck out “real” after “Certain” in heading and amended text generally. Prior to amendment, text read as follows: “For purposes of subparagraph (A), nonresidential real property and residential rental property shall not be taken into account.” - § 168(d)(3)(B)(i): Pub. L. 100–647, § 1002(i)(2)(E), substituted “residential rental property, and railroad grading or tunnel bore” for “and residential rental property”. - § 168(e)(3)(B)(v): Pub. L. 100–647, § 1002(a)(21), substituted “any section 1245 property” for “any property”. - § 168(e)(3)(C): Pub. L. 100–647, § 6027(b)(1)(C), redesignated cl. (iii) as (ii), and struck out former cl. (ii) which read as follows: “any single-purpose agricultural or horticultural structure (within the meaning of section 48(p)), and”. - § 168(e)(3)(D): Pub. L. 100–647, § 6029(a), amended subpar. (D) generally. Prior to amendment, subpar. (D) read as follows: “The term ‘10-year property’ includes any single purpose agricultural or horticultural structure (within the meaning of section 48(p)).” - § 168(e)(3)(D): Pub. L. 100–647, § 6027(a), added subpar. (D). Former subpar. (D) redesignated (E). - § 168(e)(3)(E), § 168(e)(3)(F): Pub. L. 100–647, § 6027(a), redesignated former subpars. (D) and (E) as (E) and (F), respectively. - § 168(e)(4): Pub. L. 100–647, § 1002(i)(2)(C), added par. (4). - § 168(f)(4): Pub. L. 100–647, § 1002(a)(16)(B), amended par. (4) generally. Prior to amendment, par. (4) read as follows: “Any sound recording described in section 48(r)(5).” - § 168(f)(5)(B)(ii): Pub. L. 100–647, § 1002(a)(6)(A)(i), substituted “1st taxable year” for “1st full taxable year”. - § 168(f)(5)(B)(iii): Pub. L. 100–647, § 1002(a)(6)(A)(ii), added cl. (iii). - § 168(f)(5)(C): Pub. L. 100–647, § 100–647, § 1002(a)(6)(B), added subpar. (C). - § 168(g)(2)(C): Pub. L. 100–647, § 1002(i)(2)(F), added item (iv) in table. - § 168(g)(3)(B): Pub. L. 100–647, § 6029(c), substituted “(D)(i)” for “(D)” and added item for “(D)(ii)” in table. - § 168(g)(3)(B): Pub. L. 100–647, § 6027(b)(2), substituted “(D)” for “(C)(ii)”, “(E)(i)” for “(D)(i)”, “(E)(ii)” for “(D)(ii)”, and “(F)” for “(E)” in table. - § 168(h)(2)(B): Pub. L. 100–647, § 1002(a)(8), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: - § 168(i)(1): Pub. L. 100–647, § 6253, as amended by Pub. L. 101–239, § 7816(w), amended par. (1) generally, substituting a single par. relating to class life for former subpar. (A) relating to class life generally, (B) relating to Secretarial authority, (C) relating to effect of modification, (D) prohibiting modification of assigned property before January 1, 1992, and (E) relating to assigned property and item. - § 168(i)(1): Pub. L. 100–647, § 1002(i)(2)(G), added cl. (iii), which provided: “Special rule for railroad grading or tunnel bores.—In the case of any property which is a railroad grading or tunnel bore— - § 168(i)(7)(A): Pub. L. 100–647, § 1002(a)(7)(A), inserted at end “In any case where this section as in effect before the amendments made by section 201 of the Tax Reform Act of 1986 applied to the property in the hands of the transferor, the reference in the preceding sentence to this section shall be treated as a reference to this section as so in effect.” - § 168(i)(7)(B): Pub. L. 100–647, § 1002(a)(7)(B), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “The transactions described in this subparagraph are any transaction described in section 332, 351, 361, 371(a), 374(a), 721, or 731. Subparagraph (A) shall not apply in the case of a termination of a partnership under section 708(b)(1)(B).” - § 168(i)(7): Pub. L. 100–647, § 1002(a)(7)(C), struck out subpar. (D) which read as follows: “This paragraph shall not apply to any transaction to which subsection (f)(5) applies (relating to churning transactions).” - § 168(j)(9): Pub. L. 100–647, § 1018(b)(2), amended subpar. (E), as amended by section 1802(a)(2) of Pub. L. 99–514 and as in effect before the general amendment by section 201(a) of Pub. L. 99–514, by substituting “this paragraph and paragraph (8)” for “this paragraph” in cls. (i) and (ii)(I) and by striking out cl. (iii) and inserting a new cl. (iii) which read as follows: “Tax-exempt controlled entity.— ## § 170: Charitable, etc., contributions and gifts - § 170(m), § 170(n): Pub. L. 100–647 added subsec. (m) and redesignated former subsec. (m) as (n). ## § 171: Amortizable bond premium - § 171(e): Pub. L. 100–647 substituted “Treatment as offset to interest payments” for “Treatment as interest” in heading and amended text generally. Prior to amendment, text read as follows: “Except as provided in regulations, the amount of any amortizable bond premium with respect to which a deduction is allowed under subsection (a)(1) for any taxable year shall be treated as interest for purposes of this title.” ## § 172: Net operating loss deduction - § 172(b)(1)(A): Pub. L. 100–647, § 1009(c)(2), substituted “Except as otherwise provided in this paragraph, a net operating loss” for “Except as provided in subparagraphs (D), (E), (F), (G), (H), (I), (J), (K), (L), and (M), a net operating loss”. - § 172(b)(1)(B): Pub. L. 100–647, § 1009(c)(3), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “Except as provided in subparagraphs (C), (D), and (E), a net operating loss for any taxable year ending after December 31, 1955, shall be a net operating loss carryover to each of the 5 taxable years following the taxable year of such loss. Except as provided in subparagraphs (C), (D), (E), (F), (G), (H), (J), (L), and (M), a net operating loss for any taxable year ending after December 31, 1975, shall be a net operating loss carryover to each of the 15 taxable years following the taxable year of such loss.” - § 172(b)(1): Pub. L. 100–647, § 1009(c)(1), redesignated subpars. (L) and (M) as (K) and (L), respectively. - § 172(d)(4)(B): Pub. L. 100–647, § 1003(a)(1), substituted “paragraphs (1) and (3)” for “paragraphs (1), (2)(B), and (3)”. ## § 173: Circulation expenditures - § 173(b): Pub. L. 100–647 substituted “section 59(e)” for “section 59(d)”. ## § 174: Amortization of research and experimental expenditures - § 174: Pub. L. 100–647 substituted “section 59(e)” for “section 59(d)”. ## § 178: Amortization of cost of acquiring a lease - § 178(a): Pub. L. 100–647 substituted “the deduction allowable to a lessee for exhaustion, wear and tear, obsolescence, or amortization” for “the deduction allowable to a lessee of a lease for any taxable year for amortization under section 167, 169, 179, 185, 190, 193, or 194”. ## § 179: Election to expense certain depreciable business assets - § 179(b)(3): Pub. L. 100–647, § 1002(b)(1), amended par. (3) generally. Prior to amendment, par. (3) read as follows: - § 179(d)(1): Pub. L. 100–647, § 1002(a)(19), substituted “tangible property (to which section 168 applies)” for “recovery property”. ## § 183: Activities not engaged in for profit - § 183(e)(2): Pub. L. 100–647 substituted “activity for 3 (or 2 if applicable)” for “activity for 2”. ## § 196: Deduction for certain unused business credits - § 196(c)(4): Pub. L. 100–647, § 4008(b)(2)(A), added par. (4). - § 196(d): Pub. L. 100–647, § 4008(b)(2)(B), inserted “and research credit” after “tax credit” in heading and amended text generally. Prior to amendment, text read as follows: “In the case of the investment credit determined under section 46(a) (other than a credit to which section 48(q)(3) applies), subsection (a) shall be applied by substituting ‘an amount equal to 50 percent of’ for ‘an amount equal to’.” ## § 216: Deduction of taxes, interest, and business depreciation by cooperative housing corporation tenant-stockholder - § 216(e): Pub. L. 100–647 added subsec. (e). ## § 219: Retirement savings - § 219(g)(3)(A)(ii): Pub. L. 100–647, § 6009(c)(2), as amended by Pub. L. 101–239, § 7816(c)(1), substituted “sections 135 and 911” for “section 911”. - § 219(g)(4): Pub. L. 100–647, § 1011(a)(1), inserted “and living apart” after “filing separately” in heading and amended text generally. Prior to amendment, text read as follows: “In the case of a married individual filing a separate return for any taxable year, paragraph (1) shall be applied without regard to whether such individual’s spouse is an active participant for any plan year ending with or within such taxable year.” ## § 226: Cross reference ## § 243: Dividends received by corporations - § 243(b): Pub. L. 100–647 substituted “section 801” for “section 801 or 821”. ## § 245: Dividends received from certain foreign corporations - § 245(a)(8): Pub. L. 100–647, § 1012(l)(2)(A), as amended by Pub. L. 101–239, substituted “Disallowance of foreign tax credit” for “Coordination with section 902” in heading and amended text generally. Prior to amendment, text read as follows: “In the case of a dividend received by a corporation from a qualified 10-percent owned foreign corporation, no credit shall be allowed under section 901 for any taxes treated as paid under section 902 with respect to the U.S.-source portion of such dividend.” - § 245(a)(10), § 245(a)(11): Pub. L. 100–647, § 1012(l)(2)(B), (3), added pars. (10) and (11). - § 245(c): Pub. L. 100–647, § 1012(bb)(9)(A), amended subsec. (c) generally, revising and restating provisions of pars. (1) to (4). - § 245: Pub. L. 100–647, § 1006(e)(16), struck out subsec. (d) which read as follows: “Property distributions.—For purposes of this section, the amount of any distribution of property other than money shall be the amount determined by applying section 301(b)(1)(B).” ## § 246: Rules applying to deductions for dividends received - § 246(c)(1)(A): Pub. L. 100–647 substituted “which” for “Which”. ## § 246A: Dividends received deduction reduced where portfolio stock is debt financed - § 246A(a): Pub. L. 100–647 struck out at end “The preceding sentence shall be applied before any determination of a ratio under paragraph (1) or (2) of section 245(a).” ## § 262: Personal, living, and family expenses - § 262: Pub. L. 100–647 amended section generally. Prior to amendment, section read as follows: “Except as otherwise expressly provided in this chapter, no deduction shall be allowed for personal, living, or family expenses.” ## § 263: Capital expenditures - § 263(c): Pub. L. 100–647 substituted “section 59(e)” for “section 59(d)”. ## § 263A: Capitalization and inclusion in inventory costs of certain expenses - § 263A(a)(2): Pub. L. 100–647, § 1008(b)(1), inserted at end “Any cost which (but for this subsection) could not be taken into account in computing taxable income for any taxable year shall not be treated as a cost described in this paragraph.” - § 263A(c)(3): Pub. L. 100–647, § 1008(b)(2)(A), substituted “section 263(c), 263(i), 291(b)(2), 616, or 617” for “section 263(c), 616(a), or 617(a)”. - § 263A(c)(6): Pub. L. 100–647, § 1008(b)(2)(B), added par. (6). - § 263A(d)(1): Pub. L. 100–647, § 6026(b)(2)(A), substituted “Section not to apply to certain property” for “Section to apply only if preproductive period is more than 2 years” in heading. - § 263A(d)(1)(A): Pub. L. 100–647, § 6026(b)(1), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “This section shall not apply to any plant or animal which is produced by the taxpayer in a farming business and which has a preproductive period of 2 years or less.” - § 263A(d)(2)(B)(i): Pub. L. 100–647, § 1008(b)(3)(A), substituted “the plants described in subparagraph (A) at all times during the taxable year in which such amounts were paid or incurred” for “such grove, orchard, or vineyard”. - § 263A(d)(2)(B)(ii): Pub. L. 100–647, § 1008(b)(3)(B), substituted “the plants described in subparagraph (A) during the taxable year in which such amounts were paid or incurred” for “such grove, orchard, or vineyard during the 4-taxable year period beginning with the taxable year in which the grove, orchard, or vineyard was lost or damaged”. - § 263A(d)(3)(A): Pub. L. 100–647, § 6026(b)(2)(B), struck out “or animal” after “plant”. - § 263A(d)(3)(B): Pub. L. 100–647, § 6026(c), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “No election may be made under this paragraph— - § 263A(e): Pub. L. 100–647, § 6026(b)(2)(B), struck out “or animal” after “plant” wherever appearing in pars. (1), (3), and (5). - § 263A(f)(3): Pub. L. 100–647, § 1008(b)(4), substituted “allocable (as determined under paragraph (2)) to” for “incurred or continued in connection with” and inserted “(as so determined)” after “allocable”. - § 263A(h), § 263A(i): Pub. L. 100–647, § 6026(a), added subsec. (h) and redesignated former subsec. (h) as (i). ## § 265: Expenses and interest relating to tax-exempt income - § 265(b)(3): Pub. L. 100–647 amended par. (3) generally, reenacting subpar. (A) without change, revising and restating provisions of subpars. (B) to (E), and adding subpar. (F). ## § 267: Losses, expenses, and interest with respect to transactions between related taxpayers - § 267(a)(1): Pub. L. 100–647, § 1006(e)(9), struck out “(other than a loss in case of a distribution in corporate liquidation)” after “exchange of property” and inserted at end “The preceding sentence shall not apply to any loss of the distributing corporation (or the distributee) in the case of a distribution in complete liquidation.” - § 267(a)(2): Pub. L. 100–647, § 1008(e)(6), made technical correction to directory language of Pub. L. 99–514, § 806(c)(2), see 1986 Amendment note below. ## § 274: Disallowance of certain entertainment, etc., expenses - § 274(b)(1): Pub. L. 100–647, § 1018(u)(2), related to execution of amendment by Pub. L. 99–514, § 122(c)(2), see 1986 Amendment note below. - § 274(h)(1), § 274(h)(2): Pub. L. 100–647, § 1001(g)(5), substituted “trade or business and that” for “trade or business that”. - § 274(k)(2): Pub. L. 100–647, § 1001(g)(2), amended par. (2) generally. Prior to amendment, par. (2) read as follows: “Paragraph (1) shall not apply to any expense if subsection (a) does not apply to such expense by reason of paragraph (2), (3), (4), (7), (8), or (9) of subsection (e).” - § 274(m)(1)(B)(ii): Pub. L. 100–647, § 1001(g)(3), amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “any expense to which subsection (a) does not apply by reason of paragraph (2), (3), (4), (7), (8), or (9) of subsection (e).” - § 274(n)(2): Pub. L. 100–647, § 6003(a), struck out “or” at end of subpar. (D), substituted “, or” for the period at end of subpar. (E), and added subpar. (F) and flush sentence at end. - § 274(n)(2): Pub. L. 100–647, § 1001(g)(4)(A), struck out “or” at end of subpar. (C), substituted “, or” for the period at end of subpar. (D), and added subpar. (E) and flush sentence at end. - § 274(n)(2): Pub. L. 100–647, § 1001(g)(1), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “subsection (a) does not apply to such expense by reason of paragraph (2), (3), (4), (7), (8), or (9) of subsection (e),”. ## § 280A: Disallowance of certain expenses in connection with business use of home, rental of vacation homes, etc. - § 280A(c)(5): Pub. L. 100–647 inserted “(or rental activity)” after “trade or business” in subpar. (B)(ii) and inserted at end “Any amount taken into account for any taxable year under the preceding sentence shall be subject to the limitation of the 1st sentence of this paragraph whether or not the dwelling unit is used as a residence during such taxable year.” ## § 280C: Certain expenses for which credits are allowable - § 280C(c): Pub. L. 100–647 added subsec. (c). ## § 280F: Limitation on depreciation for luxury automobiles; limitation where certain property used for personal purposes - § 280F(b)(3): Pub. L. 100–647, § 1018(u)(3), substituted “depreciation deductions” for “recovery deductions”. - § 280F(d)(1): Pub. L. 100–647, § 1002(b)(2), substituted “subsections (a) and (b), and the limitation of paragraph (3) of this subsection,” for “subsections (a) and (b)”. - § 280F(d)(3)(A): Pub. L. 100–647, § 1002(a)(10), substituted “depreciation deduction” for “recovery deduction”. ## § 280G: Golden parachute payments - § 280G(b)(5)(A): Pub. L. 100–647, § 1018(d)(6), substituted “section 1361(b) but without regard to paragraph (1)(C) thereof)” for “section 1361(b))” in cl. (i) and inserted at end “Stock described in section 1504(a)(4) shall not be taken into account under clause (ii)(I) if the payment does not adversely affect the shareholder’s redemption and liquidation rights.” - § 280G(b)(5)(B): Pub. L. 100–647, § 1018(d)(7), inserted at end “The regulations prescribed under subsection (e) shall include regulations providing for the application of this subparagraph in the case of shareholders which are not individuals (including the treatment of nonvoting interests in an entity which is a shareholder) and where an entity holds a de minimis amount of stock in the corporation.” - § 280G(d)(5): Pub. L. 100–647, § 1018(d)(8), substituted “officer of any member” for “officer or any member”. ## § 280H: Limitation on certain amounts paid to employee-owners by personal service corporations electing alternative taxable years - § 280H(c)(1)(A)(i), § 280H(d)(1): Pub. L. 100–647, § 2004(e)(14)(C), substituted “amounts paid” for “amounts paid or incurred”. - § 280H(f)(2): Pub. L. 100–647, § 2004(e)(3), substituted “section 269A(b)(2) (as modified by section 441(i)(2))” for “section 296A(b)(2)”. - § 280H(f)(4): Pub. L. 100–647, § 2004(e)(14)(A), amended par. (4) generally. Prior to amendment, par. (4) read as follows: “The term ‘adjusted taxable income’ means taxable income increased by any amount paid or incurred to an employee-owner which was includible in the gross income of such employee-owner.” - § 280H(f)(5): Pub. L. 100–647, § 2004(e)(2)(B), added par. (5). ## § 291: Special rules relating to corporate preference items - § 291(e)(1)(B)(i): Pub. L. 100–647, § 1009(b)(5), substituted “section 585(a)(2)” for “section 582(a)(2)”. - § 291(e)(1)(B)(iv), § 291(e)(1)(B): Pub. L. 100–647, § 1009(b)(4), redesignated cl. (iv), relating to application of subparagraph to certain obligations issued after Aug. 7, 1986, as (v). ## § 301: Distributions of property - § 301(b)(1): Pub. L. 100–647, § 1006(e)(10), amended par. (1) generally. Prior to amendment, par. (1) contained subpars. (A) to (D) which provided what the amount of any distribution would be for noncorporate distributees, corporate distributees, certain corporate distributees of foreign corporations, and foreign corporate distributees. - § 301(d): Pub. L. 100–647, § 1006(e)(11), amended subsec. (d) generally. Prior to amendment, subsec. (d) contained pars. (1) to (4) which provided what the basis of property received would be for noncorporate distributees, corporate distributees, foreign corporate distributees, and certain corporate distributees of foreign corporations. - § 301(e): Pub. L. 100–647, § 2004(j)(3)(B), added par. (3) and redesignated former par. (3) as (4). - § 301(e): Pub. L. 100–647, § 1006(e)(12), redesignated subsec. (f) as (e) and struck out former subsec. (e) which related to special rule for holding period of appreciated property distributed to corporation. - § 301(f), § 301: Pub. L. 100–647, § 1006(e)(12), redesignated subsec. (g) as (f). Former subsec. (f) redesignated (e). ## § 304: Redemption through use of related corporations - § 304(b)(4)(A): Pub. L. 100–647 substituted “stock from 1 member” for “stock of 1 member”. ## § 311: Taxability of corporation on distribution - § 311(a): Pub. L. 100–647, § 1018(d)(5)(E), substituted “distribution (not in complete liquidation) with respect to its stock” for “distribution, with respect to its stock,”. - § 311(b)(2): Pub. L. 100–647, § 1006(e)(21)(B), substituted “liabilities” for “liabilities in excess of basis” in heading. - § 311(b)(3): Pub. L. 100–647, § 1006(e)(8)(B), added par. (3). ## § 312: Effect on earnings and profits - § 312(b): Pub. L. 100–647, § 1018(d)(4), as amended by Pub. L. 101–239, § 7811(m)(2), substituted “of any property (other than an obligation of such corporation)” for “of any property” in introductory provisions. - § 312(k)(4): Pub. L. 100–647, § 1002(a)(3), substituted “paragraph (1)” for “paragraphs (1) and (3)”. - § 312(n)(1)(B): Pub. L. 100–647, § 1018(u)(4), made technical amendment to directory language of Pub. L. 99–514, § 803(b)(3)(A). See 1986 Amendment note below. ## § 334: Basis of property received in liquidations - § 334(b): Pub. L. 100–647 amended subsec. (b) generally. Prior to amendment, subsec. (b) read as follows: ## § 336: Gain or loss recognized on property distributed in complete liquidation - § 336(b): Pub. L. 100–647, § 1006(e)(21)(A), substituted “liabilities” for “liabilities in excess of basis” in heading. - § 336(c): Pub. L. 100–647, § 1018(d)(5)(D), substituted “liquidations which are part of a reorganization” for “certain liquidations to which part III applies” in heading and amended text generally. Prior to amendment, text read as follows: “This section shall not apply with respect to any distribution of property to the extent there is nonrecognition of gain or loss with respect to such property to the recipient under part III.” - § 336(d)(2)(B)(ii): Pub. L. 100–647, § 1006(e)(1), amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “For purposes of clause (i), any property described in clause (i)(I) acquired by the liquidating corporation during the 2-year period ending on the date of the adoption of the plan of complete liquidation shall, except as provided in regulations, be treated as part of a plan described in clause (i)(II).” - § 336(d)(3): Pub. L. 100–647, § 1006(e)(2), inserted at end “The preceding sentence shall apply to any distribution to the 80-percent distributee only if subsection (a) or (b)(1) of section 337 applies to such distribution.” - § 336(e): Pub. L. 100–647, § 1006(e)(3), substituted “an election may be made” for “such corporation may elect” in concluding provisions. ## § 337: Nonrecognition for property distributed to parent in complete liquidation of subsidiary - § 337(b)(2)(B)(i): Pub. L. 100–647, § 1006(e)(4)(A), (B), substituted “described in section 511(a)(2)” for “described in section 511(a)(2) or 511(b)(2)” and “in an activity the income from which is subject to tax under section 511(a)” for “in an unrelated trade or business (as defined in section 513)”. - § 337(b)(2)(B)(ii): Pub. L. 100–647, § 1006(e)(4)(C), substituted “an activity referred to in clause (i)” for “an unrelated trade or business of such organization”. - § 337(d): Pub. L. 100–647, § 1006(e)(5)(A), in introductory provisions, substituted “amendments made by subtitle D of title VI of the Tax Reform Act of 1986” for “amendments made to this subpart by the Tax Reform Act of 1986”, and in par. (1), substituted “this subchapter) or through the use of a regulated investment company, real estate investment trust, or tax-exempt entity” for “this subchapter)”. ## § 338: Certain stock purchases treated as asset acquisitions - § 338(e)(3): Pub. L. 100–647, § 1018(d)(9), substituted “which meet the requirements of section 1504(a)(2)” for “which meet the 80 percent requirements of subparagraphs (A) and (B) of subsection (d)(3)”. - § 338(h)(7): Pub. L. 100–647, § 1006(e)(20), struck out par. (7) which read as follows: “Additional percentage must be attributable to purchase, etc.—For purposes of subsection (c)(1), any increase in the maximum percentage of stock taken into account over the percentage of stock (by value) of the target corporation held by the purchasing corporation on the acquisition date shall be taken into account only to the extent such increase is attributable to— - § 338(h)(16): Pub. L. 100–647, § 1012(bb)(5)(A), added par. (16). ## § 351: Transfer to corporation controlled by transferor - § 351(f), § 351(g): Pub. L. 100–647 added subsec. (f) and redesignated former subsec. (f) as (g). ## § 355: Distribution of stock and securities of a controlled corporation - § 355(b)(2)(D)(i), § 355(b)(2)(D)(ii): Pub. L. 100–647, § 2004(k)(1), added cls. (i) and (ii) and struck out former cls. (i) and (ii) which read as follows: - § 355(c): Pub. L. 100–647, § 1018(d)(5)(C), added subsec. (c). ## § 358: Basis to distributees - § 358(f): Pub. L. 100–647 added subsec. (f). ## § 361: Nonrecognition of gain or loss to corporations; treatment of distributions - § 361: Pub. L. 100–647 substituted “corporations; treatment of distributions” for “transferor corporations; other treatment of transferor corporation; etc.” in section catchline and amended text generally, revising content and structure of section. ## § 367: Foreign corporations - § 367(a)(5), § 367(a): Pub. L. 100–647 added par. (5) and redesignated former par. (5) as (6). ## § 368: Definitions relating to corporate reorganizations - § 368(a)(2)(F)(ii): Pub. L. 100–647, § 1018(q)(5), struck out “(other than stock in a regulated investment company, a real estate investment trust, or an investment company which meets the requirements of this clause (ii))” after “any one issuer” and after “or fewer issuers” and inserted at end “For purposes of this clause, a person holding stock in a regulated investment company, a real estate investment trust, or an investment company which meets the requirements of this clause shall, except as provided in regulations, be treated as holding its proportionate share of the assets held by such company or trust.” - § 368(a)(3)(D): Pub. L. 100–647, § 4012(b)(1)(A), amended subpar. (D), as in effect before the amendment made by section 904(a) of Pub. L. 99–514, by adding cls. (iv) and (v). ## § 381: Carryovers in certain corporate acquisitions - § 381(c)(24): Pub. L. 100–647 substituted “depreciation deduction” for “recovery allowance for recovery property” in heading. ## § 382: Limitation on net operating loss carryforwards and certain built-in losses following ownership change - § 382(e)(2): Pub. L. 100–647, § 1006(d)(1)(A), inserted “or other corporate contraction” after “redemption” in heading and in two places in text. - § 382(e)(3): Pub. L. 100–647, § 1006(d)(17)(A), added par. (3). - § 382(g)(1)(A): Pub. L. 100–647, § 1006(d)(21)(A), struck out “new” after “stock of the”. - § 382(g)(1)(B): Pub. L. 100–647, § 1006(d)(21)(B), struck out “old” after “stock of the”. - § 382(g)(4)(C): Pub. L. 100–647, § 1006(d)(2), inserted “rules similar to” after “provided in regulations,”. - § 382(h)(1)(C): Pub. L. 100–647, § 1006(d)(3)(A), substituted “Special rules for certain section 338 gains” for “Section 338 gain” in heading and amended text generally. Prior to amendment, text read as follows: “The section 382 limitation for any taxable year in which gain is recognized by reason of an election under section 338 shall be increased by the excess of— - § 382(h)(3)(A)(ii): Pub. L. 100–647, § 1006(d)(28)(A), inserted “to the extent provided in regulations,” after “an ownership change,”. - § 382(h)(3)(A)(ii): Pub. L. 100–647, § 1006(d)(1)(B), inserted “or other corporate contractions” after “redemptions” in heading and “or other corporate contraction” after “redemption” in two places in text. - § 382(h)(3)(B)(ii): Pub. L. 100–647, § 1006(d)(26), inserted “except as provided in regulations,” after “under clause (i),”. - § 382(h)(4): Pub. L. 100–647, § 1006(d)(20), substituted “allowed as a carryforward” for “treated as a net operating loss” in heading and inserted “(or to the extent the amount so disallowed is attributable to capital losses, under rules similar to the rules for the carrying forward of net capital losses)” after “net operating losses” in subpar. (A). - § 382(h)(5)(A): Pub. L. 100–647, § 1006(d)(3)(B), substituted “recognized built-in gains to the extent such gains increased the section 382 limitation for the year (or recognized built-in losses to the extent such losses are treated as pre-change losses)” for “recognized built-in gains and losses”. - § 382(h)(6): Pub. L. 100–647, § 1006(d)(22), substituted “Treatment of certain built-in items” for “Secretary may treat certain deductions as built-in losses” in heading and amended text generally. Prior to amendment, text read as follows: “The Secretary may by regulation treat amounts which accrue on or before the change date but which are allowable as a deduction after such date as recognized built-in losses.” - § 382(h)(9): Pub. L. 100–647, § 1006(d)(23), substituted “was acquired (or is subsequently transferred)” for “is transferred”. - § 382(i)(3): Pub. L. 100–647, § 1006(d)(4), inserted “the earlier of” after “not begin before” and “or the taxable year in which the transaction being tested occurs” after “1st post-change year”. - § 382(k)(1): Pub. L. 100–647, § 1006(d)(5)(A), inserted “or having a net operating loss for the taxable year in which the ownership change occurs” after “operating loss carryover”. - § 382(k)(2): Pub. L. 100–647, § 1006(d)(5)(B), amended par. (2) generally. Prior to amendment, par. (2) read as follows: “The term ‘old loss corporation’ means any corporation with respect to which there is an ownership change— - § 382(l)(3)(A)(iv), § 382(l)(3)(A)(v): Pub. L. 100–647, § 1006(d)(6), added cls. (iv) and (v) and struck out former cl. (iv) which read as follows: “except to the extent provided in regulations, paragraph (4) of section 318(a) shall apply to an option if such application results in an ownership change.” - § 382(l)(3)(C): Pub. L. 100–647, § 5077(a), added subcl. (III) and concluding provisions. - § 382(l)(4)(B)(ii): Pub. L. 100–647, § 1006(t)(22)(A), substituted “REMIC” for “real estate mortgage pool”. - § 382(l)(5)(A)(ii): Pub. L. 100–647, § 1006(d)(25), substituted “stock of a controlling corporation” for “stock of controlling corporation”. - § 382(l)(5)(A)(ii): Pub. L. 100–647, § 1006(d)(7), substituted “after such ownership change and as a result of being shareholders or creditors immediately before such change” for “immediately after such ownership change”. - § 382(l)(5)(B): Pub. L. 100–647, § 1006(d)(27), substituted “the pre-change losses and excess credits (within the meaning of section 383(a)(2)) which may be carried to a post-change year shall be computed” for “the net operating loss deduction under section 172(a) for any post-change year shall be determined”. - § 382(l)(5)(C): Pub. L. 100–647, § 1006(d)(18), substituted “tax attributes” for “carryforwards” in heading and amended text generally. Prior to amendment, text read as follows: “In any case to which subparagraph (A) applies, the pre-change losses and excess credits (within the meaning of section 383(a)(2)) which may be carried to a post-change year shall be computed as if 50 percent of the amount which, but for the application of section 108(e)(10)(B), would have been includible in gross income for any taxable year had been so included.” - § 382(l)(5)(E): Pub. L. 100–647, § 1006(d)(19), substituted “taken into account” for “of creditors taken into account” in heading and amended introductory provisions generally. Prior to amendment, introductory provisions read as follows: “For purposes of subparagraph (A)(ii), stock transferred to a creditor in satisfaction of indebtedness shall be taken into account only if such indebtedness—”. - § 382(l)(5)(F): Pub. L. 100–647, § 4012(a)(3), substituted “1989” for “1988” in last sentence. - § 382(l)(5)(F): Pub. L. 100–647, § 1006(d)(8)(A), inserted “ ‘1504(a)(2)(B)’ for ‘1504(a)(2)’ and” after “by substituting”. - § 382(l)(5)(F): Pub. L. 100–647, § 1006(d)(8)(B), substituted “the amount of deposits in the new loss corporation immediately after the change” for “deposits described in subclause (II)”. - § 382(l)(5)(F): Pub. L. 100–647, § 4012(b)(1)(B), inserted “(as modified by section 368(a)(3)(D)(iv))” after “section 368(a)(3)(D)(ii)”. - § 382(l)(5)(F): Pub. L. 100–647, § 1006(d)(29), which directed amendment of subcl. (I) by substituting “section 368(a)(3)(D)(ii)” for “section 368(a)(D)(ii)”, could not be executed because “section 368(a)(3)(D)(ii)” appeared and “section 368(a)(D)(ii)” did not appear. - § 382(l)(6): Pub. L. 100–647, § 1006(d)(9), substituted “shall reflect the increase (if any) in value of the old loss corporation resulting from any surrender or cancellation of creditors’ claims in the transaction” for “shall be the value of the new loss corporation immediately after the ownership change”. - § 382(l)(8): Pub. L. 100–647, § 1006(d)(10), added par. (8). - § 382(m)(4): Pub. L. 100–647, § 1006(d)(1)(C), redesignated par. (5) as (4) and struck out former par. (4) which read as follows: “providing for the treatment of corporate contractions as redemptions for purposes of subsections (e)(2) and (h)(3)(A), and”. - § 382(m)(5): Pub. L. 100–647, § 1006(d)(24), added par. (5). - § 382(m)(5): Pub. L. 100–647, § 1006(d)(1)(C), redesignated former par. (5) as (4). ## § 384: Limitation on use of preacquisition losses to offset built-in gains - § 384(a): Pub. L. 100–647, § 2004(m)(1)(A), amended subsec. (a) generally, making changes in substance and structure. - § 384(b): Pub. L. 100–647, § 2004(m)(3), substituted “corporations under common control” for “50 percent of gain corporation held” in heading and amended text generally. Prior to amendment, text read as follows: “Subsection (a) shall not apply if more than 50 percent of the stock (by vote and value) of the gain corporation was held throughout the 5-year period ending on the acquisition date— - § 384(c)(1)(A): Pub. L. 100–647, § 2004(m)(1)(D), substituted “subsection (a)(1)(B)” for “subsection (a)(2)”. - § 384(c)(2): Pub. L. 100–647, § 2004(m)(1)(C), amended par. (2) generally. Prior to amendment, par. (2) read as follows: “The term ‘acquisition date’ means the date on which the gain corporation becomes a member of the affiliated group or, in any case described in subsection (a)(2), the date of the distribution or transfer in the liquidation or reorganization.” - § 384(c)(4), § 384(c)(5), § 384(c)(6), § 384(c)(7), § 384(c)(8): Pub. L. 100–647, § 2004(m)(1)(B), redesignated par. (4) as (8) and added pars. (4) to (7). - § 384(e), § 384(f): Pub. L. 100–647, § 2004(m)(2), (4), substituted “a corporation” for “the gain corporation” in subsec. (e)(2), redesignated subsec. (e) as (f), and added subsec. (e). ## § 401: Qualified pension, profit-sharing, and stock bonus plans - § 401(a)(9)(C): Pub. L. 100–647, § 6053(a), inserted at end “In the case of a governmental plan or church plan (as defined in section 89(i)(4)), the required beginning date shall be the later of the date determined under the preceding sentence or April 1 of the calendar year following the calendar year in which the employee retires.” - § 401(a)(11)(E), § 401(a)(11)(F): Pub. L. 100–647, § 1011A(l), redesignated subpar. (E), relating to cross reference, as (F). - § 401(a)(17): Pub. L. 100–647, § 1011(d)(4), inserted at end “In determining the compensation of an employee, the rules of section 414(q)(6) shall apply, except that in applying such rules, the term ‘family’ shall include only the spouse of the employee and any lineal descendants of the employee who have not attained age 19 before the close of the year.” - § 401(a)(22): Pub. L. 100–647, § 1011B(k)(1), (2), substituted “is not readily tradable on an established market” for “is not publicly traded” in subpar. (A) and in last sentence, and inserted at end “For purposes of the preceding sentence, subsections (b), (c), (m), and (o) of section 414 shall not apply except for determining whether stock of the employer is not readily tradable on an established market.” - § 401(a)(26)(F), § 401(a)(26)(G): Pub. L. 100–647, § 1011(h)(3), added subpars. (F) and (G). Former subpar. (F) redesignated (H). - § 401(a)(26)(H): Pub. L. 100–647, § 6055(a), added subpar. (H). Former subpar. (H) redesignated (I). - § 401(a)(26)(H): Pub. L. 100–647, § 1011(h)(3), redesignated former subpar. (F) as (H). - § 401(a)(26)(I): Pub. L. 100–647, § 6055(a), redesignated former subpar. (H) as (I). - § 401(a)(27): Pub. L. 100–647, § 1011A(j), inserted par. heading, designated existing provisions as subpar. (A), inserted subpar. (A) heading, and added subpar. (B). - § 401(a)(28)(B)(ii)(II): Pub. L. 100–647, § 1011B(j)(1), as amended by Pub. L. 101–239, § 7811(h)(3), inserted “and within 90 days after the period during which the election may be made, the plan invests the portion of the participant’s account covered by the election in accordance with such election” after “clause (i)”. - § 401(a)(28)(B)(iv): Pub. L. 100–647, § 1011B(d)(2), amended cl. (iv) generally. Prior to amendment, cl. (iv) read as follows: “For purposes of this subparagraph, the term ‘qualified election period’ means the 5-plan-year period beginning with the plan year after the plan year in which the participant attains age 55 (or, if later, beginning with the plan year after the 1st plan year in which the individual 1st became a qualified participant).” - § 401(a)(28)(B)(v): Pub. L. 100–647, § 1011B(j)(6), added cl. (v). - § 401(a)(30): Pub. L. 100–647, § 1011(c)(7)(A), added par. (30) at end. - § 401(k)(1), § 401(k)(2): Pub. L. 100–647, § 6071(a), struck out “electric” after “or a rural”. - § 401(k)(2)(B): Pub. L. 100–647, § 1011(k)(2)(A), inserted “amounts held by the trust which are attributable to employer contributions made pursuant to the employee’s election” after “under which”. - § 401(k)(2)(B)(i): Pub. L. 100–647, § 1011(k)(2)(B), struck out “amounts held by the trust which are attributable to employer contributions made pursuant to the employee’s election” before “may not be”. - § 401(k)(2)(B)(i): Pub. L. 100–647, § 1011(k)(1)(A), added subcl. (II), redesignated former subcls. (V) and (VI) as (III) and (IV), respectively, and struck out former subcls. (II) to (IV) which read as follows: - § 401(k)(2)(B)(ii): Pub. L. 100–647, § 1011(k)(2)(C), struck out “amounts” before “will not be”. - § 401(k)(3)(A): Pub. L. 100–647, § 1011(k)(3)(B), made technical correction to Pub. L. 99–514, § 1116(b)(4). See 1986 Amendment note below. - § 401(k)(3)(A)(ii): Pub. L. 100–647, § 1011(k)(3)(A), inserted “eligible” before “highly compensated employees” in introductory text, in subcl. (I), and in two places in subcl. (II). - § 401(k)(3)(C), § 401(k)(3)(D): Pub. L. 100–647, § 1011(k)(4), (5), redesignated subpar. (C), relating to employer contributions, as (D), and substituted “meet” for “meets” in cl. (ii)(I). - § 401(k)(4)(A): Pub. L. 100–647, § 1011(k)(6), struck out “provided by such employer” after “any other benefit”. - § 401(k)(4)(B): Pub. L. 100–647, § 6071(b)(2), as amended by Pub. L. 101–239, § 7816(l), substituted “rural cooperative plan” for “rural electric cooperative plan” in last sentence. - § 401(k)(4)(B): Pub. L. 100–647, § 1011(k)(9), inserted at end “This subparagraph shall not apply to a rural electric cooperative plan.” - § 401(k)(7): Pub. L. 100–647, § 6071(b)(1), substituted “Rural cooperative plan” for “Rural electric cooperative plan” in heading and amended text generally. Prior to amendment, text read as follows: “For purposes of this subsection— - § 401(k)(7): Pub. L. 100–647, § 1011(e)(3), amended par. (7) generally. Prior to amendment, par. (7) read as follows: “For purposes of this subsection, the term ‘rural electric cooperative plan’ means any pension plan— - § 401(k)(8)(E), § 401(k)(8)(F): Pub. L. 100–647, § 1011(k)(7), added subpar. (E) and redesignated former subpar. (E) as (F). - § 401(k)(10): Pub. L. 100–647, § 1011(k)(1)(B), added par. (10). - § 401(l)(2)(B)(i), § 401(l)(2)(B)(ii): Pub. L. 100–647, § 1011(g)(1)(A), substituted “contributed by the employer under” for “contributed under”. - § 401(l)(3)(A)(ii): Pub. L. 100–647, § 1011(g)(1)(B), inserted “attributable to employer contributions” after “basis of benefits”. - § 401(l)(5)(C): Pub. L. 100–647, § 1011(g)(2), amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: “The term ‘average annual compensation’ means the greater of— - § 401(l)(5)(E): Pub. L. 100–647, § 1011(g)(3), substituted “the social security retirement age” for “age 65” in cl. (i) and in two places in cl. (ii), and added cl. (iii). - § 401(m)(1): Pub. L. 100–647, § 1011(l)(1), substituted “A defined contribution plan” for “A plan”. - § 401(m)(2)(B): Pub. L. 100–647, § 1011(l)(3), substituted “contributions to which this subsection applies are made” for “such contributions are made”. - § 401(m)(3): Pub. L. 100–647, § 1011(l)(2), inserted at end “If matching contributions are taken into account for purposes of subsection (k)(3)(A)(ii) for any plan year, such contributions shall not be taken into account under subparagraph (A) for such year.” - § 401(m)(4)(A)(i), § 401(m)(4)(A)(ii): Pub. L. 100–647, § 1011(l)(4), substituted “a defined contribution plan” for “the plan”. - § 401(m)(4)(B): Pub. L. 100–647, § 1011(l)(5)(A), substituted “section 402(g)(3)” for “section 402(g)(3)(A)”. - § 401(m)(6)(C): Pub. L. 100–647, § 1011(l)(6), substituted “excess aggregate contributions” for “excess contributions” in heading. - § 401(m)(7)(A): Pub. L. 100–647, § 1011(l)(7), substituted “paragraph (6)” for “paragraph (8)”. ## § 402: Taxability of beneficiary of employees’ trust - § 402(a): Pub. L. 100–647, § 1011A(b)(8)(A), substituted “paragraph (4)” for “paragraphs (2) and (4)”. - § 402(a): Pub. L. 100–647, § 1011A(b)(8)(B), struck out “or (2)” after “under paragraph (1)”. - § 402(a): Pub. L. 100–647, § 1011A(b)(4)(C), inserted at end “Any distribution described in section 401(a)(28)(B)(ii) shall be treated as meeting the requirements of subclauses (I) and (II).” - § 402(a): Pub. L. 100–647, § 1011A(b)(4)(A), repealed amendment by Pub. L. 99–514, § 1122(e)(1), which had amended cl. (i) generally, and provided that the Internal Revenue Code of 1986 shall be applied and administered as if such amendment had not been enacted. See 1986 Amendment note and Effective Date of 1988 Amendment note below. - § 402(a): Pub. L. 100–647, § 1011A(b)(4)(B), inserted “is payable as provided in clause (i), (iii), or (iv) of subsection (e)(4)(A) (without regard to the second sentence thereof) and” after “(I) such distribution”. - § 402(a): Pub. L. 100–647, § 1011A(b)(4)(D), struck out “10-year” after “Denial of” in heading. - § 402(a): Pub. L. 100–647, § 1011A(a)(1), substituted “resulting in any portion of a distribution being excluded from gross income under subparagraph (A)” for “described in subparagraph (A)”. - § 402(a): Pub. L. 100–647, § 1011A(b)(8)(C), struck out “paragraph (2) of subsection (a), and” after “paragraph (5)(A) applies,”. - § 402(a): Pub. L. 100–647, § 1011A(b)(8)(D), substituted “then paragraphs (1) and (3) of subsection (e) shall” for “then paragraph (2) of subsection (a), and paragraphs (1) and (3) of subsection (e), shall”. - § 402(a): Pub. L. 100–647, § 1018(t)(8)(A), redesignated subpar. (G), relating to treatment of potential future vesting, as (I). - § 402(a): Pub. L. 100–647, § 1011A(b)(5), inserted at end “A deposit shall not be treated as a frozen deposit unless on at least 1 day during the 60-day period described in paragraph (5)(C) (without regard to this subparagraph) such deposit is described in the preceding sentence.” - § 402(a): Pub. L. 100–647, § 1018(t)(8)(A), redesignated subpar. (G), relating to treatment of potential future vesting, as (I). - § 402(b)(2): Pub. L. 100–647, § 1011(h)(4), added subpar. (A) and struck out former subpar. (A) which related to trust which is not exempt from tax under section 501(a) because plan fails to meet requirements of section 410(b). - § 402(b)(2): Pub. L. 100–647, § 1011(h)(4), added subpar. (B) and struck out former subpar. (B) which related to failure of plan to meet requirements of section 410(b) for more than 1 taxable year. - § 402(e)(1)(A): Pub. L. 100–647, § 1011A(b)(8)(E), struck out “ordinary income portion of a” after “subparagraph (B)) on the”. - § 402(e)(1)(B): Pub. L. 100–647, § 1011A(b)(10), inserted at end “For purposes of the preceding sentence, in determining the amount of tax under section 1(c), section 1(g) shall be applied without regard to paragraph (2)(B) thereof.” - § 402(e)(1)(B): Pub. L. 100–647, § 1018(u)(1), made technical correction to directory language of Pub. L. 99–514, § 104(b)(5). See 1986 Amendment note below. - § 402(e)(1)(B): Pub. L. 100–647, § 1018(u)(6), related to execution of amendment by Pub. L. 99–514, § 1122(b)(2)(B), see 1986 Amendment note below. - § 402(e)(3): Pub. L. 100–647, § 1018(u)(7), related to execution of amendment by Pub. L. 99–514, § 1122(b)(2)(C), see 1986 Amendment note below. - § 402(e)(4)(A): Pub. L. 100–647, § 1011A(b)(8)(F), in concluding provisions, substituted “A” for “Except for purposes of subsection (a)(2) and section 403(a)(2), a”, and struck out “subsection (a)(2) of this section, and subsection (a)(2) of section 403,” before “the balance to”. - § 402(e)(4)(B): Pub. L. 100–647, § 1011A(b)(6), substituted “employee” for “taxpayer”. - § 402(e)(4): Pub. L. 100–647, § 1011A(c)(9), struck out “clause (ii) of” after “amounts described in”. - § 402(e)(4): Pub. L. 100–647, § 1011A(b)(7), amended last sentence generally. Prior to amendment, last sentence read as follows: “To the extent provided by the Secretary, a taxpayer may elect before any distribution not to have this paragraph apply with respect to such distribution.” - § 402(e)(4): Pub. L. 100–647, § 1011A(b)(8)(G), struck out subpar. (L) which related to election to treat pre-1974 participation as post-1973 participation. - § 402(e)(4): Pub. L. 100–647, § 1011A(b)(8)(H), struck out “, subsection (a)(2) of this section, and section 403(a)(2)” after “of this subsection”. - § 402(e)(4): Pub. L. 100–647, § 6068(a), added subpar. (O). - § 402(e)(5): Pub. L. 100–647, § 1011A(b)(8)(I), struck out “and paragraph (2) of subsection (a)” after “of this subsection”. - § 402(e)(6): Pub. L. 100–647, § 1011A(b)(8)(J), amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: “For purposes of this paragraph, special lump sum treatment applies to any distribution if any portion of such distribution— - § 402(f)(1): Pub. L. 100–647, § 1018(t)(8)(C), substituted “an eligible” for “a eligible”. - § 402(g): Pub. L. 100–647, § 1011(c)(6)(B), redesignated subsec. (g), relating to effect of disposition of stock by plan on net unrealized appreciation, as (j). - § 402(g): Pub. L. 100–647, § 1011(c)(6)(A), redesignated subsec. (g), relating to treatment of self-employed individuals, as (i). - § 402(g)(2): Pub. L. 100–647, § 1011(c)(2), substituted “Distribution” for “Required distribution” in heading. - § 402(g)(2)(C): Pub. L. 100–647, § 1011(c)(1), struck out “(and no tax shall be imposed under section 72(t))” after “in gross income”, in cl. (i), substituted “such income is distributed” for “such excess deferral is made” in cl. (ii), and inserted at end “No tax shall be imposed under section 72(t) on any distribution described in the preceding sentence.” - § 402(g)(2)(D): Pub. L. 100–647, § 1011(c)(3), added subpar. (D). - § 402(g)(3): Pub. L. 100–647, § 1011(c)(4), substituted “this subsection” for “this paragraph”. - § 402(g)(3): Pub. L. 100–647, § 1011(c)(11), inserted at end “An employer contribution shall not be treated as an elective deferral described in subparagraph (C) if under the salary reduction agreement such contribution is made pursuant to a one-time irrevocable election made by the employee at the time of initial eligibility to participate in the agreement or is made pursuant to a similar arrangement specified in regulations.” - § 402(g)(8): Pub. L. 100–647, § 1011(c)(5)(A), inserted “(determined in the manner prescribed by the Secretary)” after “prior taxable years”. - § 402(g)(8): Pub. L. 100–647, § 1011(c)(5)(B), added subpar. (D). - § 402(i): Pub. L. 100–647, § 1011(c)(6)(A), redesignated subsec. (g), relating to treatment of self-employed individuals, as (i). - § 402(j): Pub. L. 100–647, § 1011(c)(6)(B), redesignated subsec. (g), relating to effect of disposition of stock by plan on net unrealized appreciation, as (j). ## § 403: Taxation of employee annuities - § 403(b)(1)(D): Pub. L. 100–647, § 1011(m)(1)(B), substituted “paragraph (12)” for “paragraph (10)”. - § 403(b)(1)(E): Pub. L. 100–647, § 1011(c)(7)(B), added subpar. (E). - § 403(b)(10): Pub. L. 100–647, § 1011(m)(1)(A), redesignated par. (10), relating to nondiscrimination requirements, as (12). - § 403(b)(12): Pub. L. 100–647, § 1011(m)(1)(A), redesignated par. (10), relating to nondiscrimination requirements, as (12). - § 403(b)(12)(A): Pub. L. 100–647, § 1011(m)(2), inserted “(17),” after “paragraphs (4), (5),” and “, section 401(m),” after “of section 401(a)” in cl. (i). - § 403(b)(12)(A): Pub. L. 100–647, § 1011(c)(12), inserted after cl. (ii) “For purposes of clause (i), a contribution shall be treated as not made pursuant to a salary reduction agreement if under the agreement it is made pursuant to a 1-time irrevocable election made by the employee at the time of initial eligibility to participate in the agreement or is made pursuant to a similar arrangement specified in regulations.” - § 403(b)(12)(A): Pub. L. 100–647, § 6052(a)(1), amended last sentence generally. Prior to amendment, last sentence read as follows: “For purposes of this subparagraph, students who normally work less than 20 hours per week may (subject to the conditions applicable under section 410(b)(4)) be excluded.” ## § 404: Deduction for contributions of an employer to an employees’ trust or annuity plan and compensation under a deferred-payment plan - § 404(a)(1)(D): Pub. L. 100–647, § 2005(b)(3), struck out “(without regard to any reduction by the credit balance in the funding standard account)” after “under section 412(l)”. - § 404(a)(1)(D): Pub. L. 100–647, § 2005(b)(1), substituted “For purposes of determining whether a plan has more than 100 participants” for “For purposes of this subparagraph”. - § 404(a)(7)(A): Pub. L. 100–647, § 2005(b)(2), inserted at end “For purposes of clause (ii), if paragraph (1)(D) applies to a defined benefit plan for any plan year, the amount necessary to satisfy the minimum funding standard provided by section 412 with respect to such plan for such plan year shall not be less than the unfunded current liability of such plan under section 412(l).” - § 404(a)(7)(A): Pub. L. 100–647, § 1011A(e)(4)(A), in introductory provisions, substituted “foregoing paragraphs” for “foregoing provisions” and inserted “or in connection with trusts or plans described in 2 or more of such paragraphs” after “defined benefit plans”. - § 404(a)(8)(D): Pub. L. 100–647, § 1018(t)(5), made technical correction to Pub. L. 99–514, § 1875(c)(7)(B), see 1986 Amendment note below. - § 404(h)(1)(C): Pub. L. 100–647, § 1011(f)(6), inserted “(or during the taxable year in the case of a taxable year described in subparagraph (A)(ii))” after “within the taxable year”. - § 404(h)(3): Pub. L. 100–647, § 1011A(e)(4)(B), substituted “Coordination with subsection (a)(7)” for “Effect on limit on deductions” in heading and amended text generally. Prior to amendment, text read as follows: “For any taxable year for which the employer has a deduction under paragraph (1), the otherwise applicable 25 percent limitations in subsection (a)(7) shall be reduced by the amount of the allowable deductions under paragraph (1) with respect to participants in the stock bonus or profit-sharing trust.” - § 404(k): Pub. L. 100–647, § 1011B(h)(3)(A), inserted “(whether or not allocated to participants)” after “to employer securities” in par. (2)(C). - § 404(k): Pub. L. 100–647, § 1011B(h)(6), substituted “or as engaging in a prohibited transaction for purposes of section 4975(d)(3) merely by reason of any distribution or payment” for “merely by reason of any distribution” in third sentence. - § 404(k): Pub. L. 100–647, § 1018(t)(4)(A), substituted “evasion of taxation” for “avoidance of taxation” in fourth sentence. - § 404(k): Pub. L. 100–647, § 1011B(h)(3)(B), inserted at end “Paragraph (2)(C) shall not apply to dividends from employer securities which are allocated to any participant unless the plan provides that employer securities with a fair market value not less than the amount of such dividends are allocated to such participant for the year which (but for paragraph (2)(C)) such dividends would have been allocated to such participant.” - § 404(l): Pub. L. 100–647, § 1011(d)(4), inserted at end “In determining the compensation of an employee, the rules of section 414(q)(6) shall apply, except that in applying such rules, the term ‘family’ shall include only the spouse of the employee and any lineal descendants of the employee who have not attained age 19 before the close of the year.” - § 404(l): Pub. L. 100–647, § 1011(d)(1), inserted at end “For purposes of clause (i), (ii), or (iii) of subsection (a)(1)(A), and in computing the full funding limitation, any adjustment under the preceding sentence shall not be taken into account for any year before the year for which such adjustment first takes effect.” ## § 404A: Deduction for certain foreign deferred compensation plans - § 404A(d)(3): Pub. L. 100–647 inserted “except as provided in regulations,” after “qualified foreign plan,”. ## § 406: Employees of foreign affiliates covered by section 3121(l) agreements - § 406(c): Pub. L. 100–647, § 1011A(b)(16), struck out “of capital gain provisions and” after “service for purposes” in heading and substituted “applying section 402(e)” for “applying subsections (a)(2) and (e) of section 402, and section 403(a)(2)” in text. - § 406(e): Pub. L. 100–647, § 1011A(b)(1)(C), redesignated pars. (2) to (4) as (1) to (3), respectively, and struck out former par. (1) which read as follows: “Section 72(d) (relating to employees’ annuities).” ## § 407: Certain employees of domestic subsidiaries engaged in business outside the United States - § 407(c): Pub. L. 100–647, § 1011A(b)(16), struck out “of capital gain provisions and” after “service for purposes” in heading and substituted “applying section 402(e)” for “applying subsections (a)(2) and (e) of section 402, and section 403(a)(2)” in text. - § 407(e): Pub. L. 100–647, § 1011A(b)(1)(C), redesignated pars. (2) to (4) as (1) to (3), respectively, and struck out former par. (1) which read as follows: “Section 72(d) (relating to employees’ annuities).” ## § 408: Individual retirement accounts - § 408(d)(2)(C): Pub. L. 100–647, § 1011(b)(1), substituted “in which the taxable year begins” for “with or within which the taxable year ends”. - § 408(d)(3)(A): Pub. L. 100–647, § 1011A(a)(2)(A), struck out at end “Clause (ii) shall not apply during the 5-year period beginning on the date of the qualified total distribution referred to in such clause if the individual was treated as a 5-percent owner with respect to such distribution under section 402(a)(5)(F)(ii).” - § 408(d)(3)(E): Pub. L. 100–647, § 1018(t)(3)(D), substituted “paragraph” for “subparagraph”. - § 408(d)(4): Pub. L. 100–647, § 1011(b)(2), substituted “Contributions” for “Excess contributions” in heading, struck out “to the extent that such contribution exceeds the amount allowable as a deduction under section 219” after “individual retirement annuity” in introductory provisions, and substituted “such contribution” for “such excess contribution” in subpars. (B) and (C) and in last sentence. - § 408(d)(5): Pub. L. 100–647, § 1011(b)(3), substituted “shall be computed without regard to section 219(g)” for “(after application of section 408(o)(2)(B)(ii)) shall be increased by the nondeductible limit under section 408(o)(2)(B)” in last sentence. - § 408(d)(7): Pub. L. 100–647, § 1011(f)(5), added par. (7). - § 408(k)(3)(B): Pub. L. 100–647, § 1011(i)(5), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “For purposes of subparagraph (A)— - § 408(k)(3)(C): Pub. L. 100–647, § 1011(f)(3)(C), struck out “total” before “compensation”. - § 408(k)(6)(A): Pub. L. 100–647, § 1011(f)(1), substituted “Arrangements which qualify” for “In general” in heading and amended text generally. Prior to amendment, text read as follows: “A simplified employee pension shall not fail to meet the requirements of this subsection for a year merely because, under the terms of the pension— - § 408(k)(6)(A)(iv): Pub. L. 100–647, § 1011(c)(7)(C), added cl. (iv). - § 408(k)(6)(B): Pub. L. 100–647, § 1011(f)(2), inserted “who were eligible to participate (or would have been required to be eligible to participate if a pension was maintained)” after “than 25 employees”. - § 408(k)(6)(D)(ii): Pub. L. 100–647, § 1011(f)(3)(A), substituted “(not in excess of the first $200,000)” for “(within the meaning of section 414(s))”. - § 408(k)(6)(F), § 408(k)(6)(G): Pub. L. 100–647, § 1011(f)(4), added subpar. (f) and redesignated former subpar. (F) as (G). - § 408(k)(7): Pub. L. 100–647, § 1011(f)(3)(B), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “The term ‘compensation’ means, in the case of an employee within the meaning of section 401(c)(1), earned income within the meaning of section 401(c)(2).” - § 408(k)(8): Pub. L. 100–647, § 1011(f)(3)(D), (10), substituted “paragraphs (3)(C) and (6)(D)(ii)” for “paragraph (3)(C)” and inserted “, except that in the case of years beginning after 1988, the $200,000 amount (as so adjusted) shall not exceed the amount in effect under section 401(a)(17)” after “under section 415(d)”. - § 408(m)(3): Pub. L. 100–647, § 6057(a), amended par. (3) generally. Prior to amendment, par. (3) read as follows: “In the case of an individual retirement account, paragraph (2) shall not apply to any gold coin described in paragraph (7), (8), (9), or (10) of section 5112(a) of title 31 or any silver coin described in section 5112(e) of title 31.” - § 408(o)(4)(B)(iv): Pub. L. 100–647, § 1011(b)(1), substituted “in which the taxable year begins” for “with or within which the taxable year ends”. ## § 409: Qualifications for tax credit employee stock ownership plans - § 409(d): Pub. L. 100–647, § 1011B(j)(3), inserted “or to any distribution or reinvestment required under section 401(a)(28)” after “under section 401(a)(9)”. - § 409(e)(5): Pub. L. 100–647, § 1018(t)(4)(H), substituted “paragraph (3)” for “paragraph (2) or (3)”. - § 409(h)(2): Pub. L. 100–647, § 1018(t)(4)(B), substituted “paragraph (1)(B)” for “section 409(o)”. - § 409(h)(7): Pub. L. 100–647, § 1011B(j)(5), added par. (7). - § 409(l)(4), § 409(l)(5): Pub. L. 100–647, § 1011B(k)(3), redesignated par. (4), relating to nonvoting common stock may be acquired in certain cases, as (5). - § 409(n)(1): Pub. L. 100–647, § 1011B(g)(1), made technical amendment to directory language of Pub. L. 99–514, § 1172(b)(1). See 1986 Amendment note below. - § 409(n)(2)(C)(i), § 409(n)(3)(A)(ii): Pub. L. 100–647, § 1011B(g)(2), inserted “or section 2057” after “which section 1042”. - § 409(n)(3)(C): Pub. L. 100–647, § 1018(t)(4)(C), amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: “The term ‘nonallocation period’ means the 10-year period beginning on the later of— - § 409(o)(1)(A): Pub. L. 100–647, § 1011B(i)(3), substituted “if the participant and, if applicable pursuant to sections 401(a)(11) and 417, with the consent of the participant’s spouse elects” for “unless the participant otherwise elects”. - § 409(o)(1)(A)(ii): Pub. L. 100–647, § 1011B(i)(1), substituted “distribution is required to begin under this clause” for “such year”. ## § 410: Minimum participation standards - § 410(b)(4)(B): Pub. L. 100–647, § 1011(h)(1), substituted “not meeting” for “do not meet” and struck out “and” before “are covered”. - § 410(b)(4)(C): Pub. L. 100–647, § 1011(h)(11), added subpar. (C). - § 410(b)(6)(C)(i)(II): Pub. L. 100–647, § 3021(a)(13)(B), inserted “or such plan meets such other requirements as the Secretary may prescribe by regulation” after “of a group)”. - § 410(b)(6)(F), § 410(b)(6)(G): Pub. L. 100–647, § 1011(h)(2), added subpar. (F) and redesignated former subpar. (F) as (G). ## § 411: Minimum vesting standards - § 411(a)(11)(A): Pub. L. 100–647 substituted “nonforfeitable” for “vested”. ## § 412: Minimum funding standards - § 412: Pub. L. 100–647, § 2005(a)(2)(A), (d)(1), amended cl. (i) identically, substituting “October 29” for “October 17” and amended cl. (iii) identically, substituting “October 28” for “October 16”. ## § 413: Collectively bargained plans, etc. - § 413(b)(9): Pub. L. 100–647, § 1011(h)(10), added par. (9). - § 413(c): Pub. L. 100–647, § 6058(c), struck out at end “Allocations of amounts under paragraphs (4), (5), and (6), among the employers maintaining the plan, shall not be inconsistent with regulations prescribed for this purpose by the Secretary.” - § 413(c)(4): Pub. L. 100–647, § 6058(a), amended par. (4) generally. Prior to amendment, par. (4) read as follows: “The minimum funding standard provided by section 412 shall be determined as if all participants in the plan were employed by a single employer.” - § 413(c)(6): Pub. L. 100–647, § 6058(b), amended par. (6) generally. Prior to amendment, par. (6) read as follows: “Each applicable limitation provided by section 404(a) shall be determined as if all participants in the plan were employed by a single employer. The amounts contributed to or under the plan by each employer who maintains the plan, for the portion of this taxable year which is included within such a plan year, shall be considered not to exceed such a limitation if the anticipated employer contributions for such plan year (determined in a reasonable manner not inconsistent with regulations prescribed by the Secretary) do not exceed such limitation. If such anticipated contributions exceed such a limitation, the portion of each such employer’s contributions which is not deductible under section 404 shall be determined in accordance with regulations prescribed by the Secretary.” - § 413(c)(7): Pub. L. 100–647, § 6058(c), added par. (7). ## § 414: Definitions and special rules - § 414(k)(2): Pub. L. 100–647, § 1011A(b)(3), inserted “72(d) (relating to treatment of employee contributions as separate contract),” after “purposes of sections”. - § 414(l): Pub. L. 100–647, § 2005(c)(1), (2), substituted “Merger” for “Mergers” in heading, designated existing provision as par. (1), inserted par. (1) heading, and added par. (2). - § 414(l)(2)(G): Pub. L. 100–647, § 6067(a), added subpar. (G). - § 414(m)(4)(A): Pub. L. 100–647, § 1011(h)(5), substituted “(16), (17), and (26)” for “and (16)”. - § 414(m)(4): Pub. L. 100–647, § 1011B(a)(16), struck out subpars. (C) and (D) which read as follows: - § 414(n)(3)(A): Pub. L. 100–647, § 1011(h)(5), substituted “(16), (17), and (26)” for “and (16)”. - § 414(n)(3)(C): Pub. L. 100–647, § 3011(b)(4), as amended by Pub. L. 101–239, § 7813(b), struck out “162(i)(2), 162(k),” after “132,” and substituted “505, and 4980B” for “and 505”. - § 414(n)(3)(C): Pub. L. 100–647, § 1011B(a)(19), inserted “162(i)(2), 162(k),” after “132,”. - § 414(o): Pub. L. 100–647, § 1011(e)(4), inserted “or any requirement under section 457” after “or (n)(3)”. - § 414(p)(4)(B): Pub. L. 100–647, § 1018(t)(8)(E), substituted “means the earlier of” for “means earlier of” and struck out “in” at beginning of cls. (i) and (ii). - § 414(p)(9): Pub. L. 100–647, § 1018(t)(8)(G), inserted at end “For purposes of this title, except as provided in regulations, any distribution from an annuity contract under section 403(b) pursuant to a qualified domestic relations order shall be treated in the same manner as a distribution from a plan to which section 401(a)(13) applies.” - § 414(p)(10): Pub. L. 100–647, § 1018(t)(8)(F), inserted “, 403(b),” after “section 401”. - § 414(q)(1): Pub. L. 100–647, § 1011(i)(1), inserted at end “The Secretary shall adjust the $75,000 and $50,000 amounts under this paragraph at the same time and in the same manner as under section 415(d).” - § 414(q)(1): Pub. L. 100–647, § 1011(d)(8), substituted “50” for “150” and “415(b)(1)(A)” for “415(c)(1)(A)”. - § 414(q)(6): Pub. L. 100–647, § 1011(i)(2), added subpar. (C). - § 414(q)(8): Pub. L. 100–647, § 1011(i)(4)(A), inserted “or the number of officers taken into account under paragraph (5)” after “under paragraph (4)”. - § 414(q)(8): Pub. L. 100–647, § 1011(i)(3)(A)(ii), substituted “Except as provided by the Secretary, the employer” for “The employer” in last sentence. - § 414(q)(8): Pub. L. 100–647, § 1011(i)(3)(A)(i), struck out subpar. (F) which read as follows: “employees who are nonresident aliens and who receive no earned income (within the meaning of section 911(d)(2)) from the employer which constitutes income from sources within the United States (within the meaning of section 861(a)(3)).” - § 414(q): Pub. L. 100–647, § 1011(i)(3)(B), added par. (11). - § 414(q): Pub. L. 100–647, § 3021(b)(1), added par. (12). - § 414(r)(3): Pub. L. 100–647, § 3021(b)(2)(A), amended par. (3) generally. Prior to amendment, par. (3) read as follows: “The requirements of subparagraph (C) of paragraph (2) shall not apply to any line of business if the highly compensated employee percentage with respect to such line of business is— - § 414(s): Pub. L. 100–647, § 1011(j)(1), substituted “any applicable provision” for “this part” in introductory provisions. - § 414(s)(1): Pub. L. 100–647, § 1011(j)(1), amended par. (1) generally. Prior to amendment, par. (1) read as follows: “The term ‘compensation’ means compensation for service performed for an employer which (taking into account the provisions of this chapter) is currently includible in gross income.” - § 414(s)(2), § 414(s)(3), § 414(s)(4): Pub. L. 100–647, § 1011(j)(2), added par. (4), redesignated former pars. (3) and (4) as (2) and (3), respectively, and struck out former par. (2) which read as follows: “The Secretary shall prescribe regulations for the determination of the compensation of an employee who is a self-employed individual (within the meaning of section 401(c)(1)) which are based on the principles of paragraph (1).” - § 414(t)(1): Pub. L. 100–647, § 1011B(a)(20), struck out “of section 414” before “shall be treated” and “shall apply with”. - § 414(t)(2): Pub. L. 100–647, § 3011(b)(5), as amended by Pub. L. 101–239, § 7813(b), struck out “162(i)(2), 162(k),” after “132,” and substituted “505, or 4980B” for “or 505”. - § 414(t)(2): Pub. L. 100–647, § 1011B(a)(17), inserted “162(i)(2), 162(k),” after “132,”. ## § 415: Limitations on benefits and contribution under qualified plans - § 415(b)(2)(H)(ii): Pub. L. 100–647, § 6059(a), substituted “15” for “20”. - § 415(b)(5)(B): Pub. L. 100–647, § 1011(d)(6), inserted “and subsection (e)” after “paragraphs (1)(B) and (4)”. - § 415(b)(5)(D): Pub. L. 100–647, § 1011(d)(2), substituted “subparagraph (A)” for “this paragraph”. - § 415(b)(10): Pub. L. 100–647, § 6054(a), added par. (10). - § 415(c)(6)(A): Pub. L. 100–647, § 1011(d)(7), substituted “paragraph (1)(A)” for “paragraph (c)(1)(A) (as adjusted for such year pursuant to subsection (d)(1))” and for “paragraph (c)(1)(A) (as so adjusted)”. - § 415(k): Pub. L. 100–647, § 1018(t)(8)(D), repealed Pub. L. 99–514, § 1899A(13), see 1986 Amendment note below. - § 415(k)(2)(C)(ii): Pub. L. 100–647, § 1011(d)(3)(A), substituted “to such increase” for “to the arrangement”. - § 415(k)(2)(D): Pub. L. 100–647, § 1011(d)(3)(B), added subpar. (D) and struck out former subpar. (D) which read as follows: “An arrangement meets the requirements of this subparagraph only if it is elective, it is available under the same terms to all participants, and it provides that such election may be made in— - § 415(l)(1): Pub. L. 100–647, § 1018(t)(3)(B), made technical correction to directory language of Pub. L. 99–514, § 1852(h)(2). See 1986 Amendment note below. ## § 416: Special rules for top-heavy plans - § 416(i)(1)(A): Pub. L. 100–647, § 1011(i)(4)(B), inserted at end “For purposes of determining the number of officers taken into account under clause (i), employees described in section 414(q)(8) shall be excluded.” - § 416(i)(1)(A)(i): Pub. L. 100–647, § 1011(d)(8), substituted “50” for “150” and “415(b)(1)(A)” for “415(c)(1)(A)”. - § 416(i)(1)(D): Pub. L. 100–647, § 1011(j)(3)(A), added subpar. (D). ## § 417: Definitions and special rules for purposes of minimum survivor annuity requirements - § 417(e)(3)(A): Pub. L. 100–647 substituted “clause (ii)” for “subclause (II)” in last sentence. ## § 419: Treatment of funded welfare benefit plans - § 419(a)(1): Pub. L. 100–647 substituted “chapter” for “subchapter”. ## § 419A: Qualified asset account; limitation on additions to account - § 419A(a): Pub. L. 100–647, § 1018(u)(12), made technical amendment to directory language of Pub. L. 99–514, § 1851(a)(6)(B). See 1986 Amendment note below. - § 419A(f)(5): Pub. L. 100–647, § 1018(t)(2)(A), repealed Pub. L. 99–514, § 1851(a)(4). See 1986 Amendment note below. - § 419A(f)(5): Pub. L. 100–647, § 1018(t)(1)(C), substituted “account” for “accounts”. ## § 422: Incentive stock options - § 422(b): Pub. L. 100–647, § 1003(d)(1)(A), inserted at end “Such term shall not include any option if (as of the time the option is granted) the terms of such option provide that it will not be treated as an incentive stock option.” - § 422(b): Pub. L. 100–647, § 1003(d)(2)(B), struck out par. (7) which read as follows: “under the terms of the plan, the aggregate fair market value (determined at the time the option is granted) of the stock with respect to which incentive stock options are exercisable for the 1st time by such individual during any calendar year (under all such plans of the individual’s employer corporation and its parent and subsidiary corporations) shall not exceed $100,000.” - § 422(c)(1): Pub. L. 100–647, § 1003(d)(2)(C), substituted “subsection (d)” for “paragraph (7) of subsection (b)”. - § 422(d): Pub. L. 100–647, § 1003(d)(2)(A), added subsec. (d). ## § 424: Definitions and special rules - § 424(c)(1): Pub. L. 100–647, § 1018(l)(2), as amended by Pub. L. 101–239, substituted “paragraphs (2), (3), and (4)” for “paragraphs (2) and (3)”. - § 424(c)(4): Pub. L. 100–647, § 1018(l)(1), added par. (4). ## § 441: Period for computation of taxable income - § 441(i)(2): Pub. L. 100–647 inserted at end “A corporation shall not be treated as a personal service corporation unless more than 10 percent of the stock (by value) in such corporation is held by employee-owners (within the meaning of section 269A(b)(2), as modified by the preceding sentence). If a corporation is a member of an affiliated group filing a consolidated return, all members of such group shall be taken into account in determining whether such corporation is a personal service corporation.” ## § 444: Election of taxable year other than required taxable year - § 444(a): Pub. L. 100–647, § 2004(e)(1)(A), substituted “as otherwise provided in this section” for “as provided in subsections (b) and (c)”. - § 444(b)(4): Pub. L. 100–647, § 2004(e)(13), inserted “except as provided in regulations,” before “the term”. - § 444(d)(2)(A): Pub. L. 100–647, § 2004(e)(12), inserted “or otherwise terminates such election” after “its taxable year”. - § 444(d)(2)(B): Pub. L. 100–647, § 2004(e)(1)(C), inserted “or paragraph (3)(A)” after “under subparagraph (A)”. - § 444(d)(3): Pub. L. 100–647, § 2004(e)(1)(B), amended par. (3) generally. Prior to amendment, par. (3) read as follows: “No election may be made under subsection (a) with respect to an entity which is part of a tiered structure other than a tiered structure comprised of 1 or more partnerships or S corporations all of which have the same taxable year.” - § 444(f), § 444(g): Pub. L. 100–647, § 2004(e)(2)(A), added subsec. (f) and redesignated former subsec. (f) as (g). ## § 447: Method of accounting for corporations engaged in farming - § 447(b): Pub. L. 100–647, § 1008(b)(5), substituted “period expenses” for “period of expenses” in heading and in text. - § 447: Pub. L. 100–647, § 1008(b)(6), substituted “qualified farming trade or business” for “trade or business of farming” in subpar. (A) and in concluding provisions. ## § 448: Limitation on use of cash method of accounting - § 448(c)(3)(D): Pub. L. 100–647, § 1008(a)(9), added subpar. (D). - § 448(d)(2): Pub. L. 100–647, § 6032(a), inserted at end “To the extent provided in regulations which shall be prescribed by the Secretary, indirect holdings through a trust shall be taken into account under subparagraph (B).” - § 448(d)(2)(B): Pub. L. 100–647, § 1008(a)(1)(A), substituted “(or indirectly through 1 or more partnerships, S corporations, or qualified personal service corporations not described in paragraph (2) or (3) of subsection (a))” for “or indirectly”. - § 448(d)(3): Pub. L. 100–647, § 1008(a)(7), inserted sentence at end relating to treatment of S corporation as tax shelter. - § 448(d)(4)(C): Pub. L. 100–647, § 1008(a)(8), substituted “90 percent or more of” for “substantially all of”. - § 448(d)(4)(C): Pub. L. 100–647, § 1008(a)(2), substituted “such group” for “all such members”. - § 448(d)(8): Pub. L. 100–647, § 1008(a)(1)(B), added par. (8). ## § 451: General rule for taxable year of inclusion - § 451(d): Pub. L. 100–647, § 6033(a), inserted “or title II of the Disaster Assistance Act of 1988,” after “the Agricultural Act of 1949, as amended,”. - § 451(e): Pub. L. 100–647, § 6030(a), struck out “(other than livestock described in section 1231(b)(3))” after “exchange of livestock”. - § 451(f), § 451(g): Pub. L. 100–647, § 1009(d)(3), redesignated subsec. (f), relating to treatment of interest on frozen deposits in certain financial institutions, as (g). ## § 453: Installment method - § 453(f)(1): Pub. L. 100–647, § 1018(u)(25), substituted “subsections (g)” for “subsection (g)”. - § 453(f)(8): Pub. L. 100–647, § 1018(u)(26), substituted “payments to be” for “payment to be”. - § 453(g)(1): Pub. L. 100–647, § 1006(i)(2)(B), struck out “(within the meaning of section 1239(b))” after “between related persons”. - § 453(g)(1): Pub. L. 100–647, § 1006(i)(1), added subpars. (A) to (C) and struck out former subpars. (A) and (B) which read as follows: - § 453(g)(3): Pub. L. 100–647, § 1006(i)(2)(A), added par. (3). - § 453(h)(1)(B): Pub. L. 100–647, § 1006(e)(7)(A), substituted “to 1 person in 1 transaction” for “to one person” in concluding provisions. - § 453(h)(1)(E): Pub. L. 100–647, § 1006(e)(7)(B), substituted “section 368(c)” for “section 368(c)(1)”. - § 453(j): Pub. L. 100–647, § 1008(g)(1), redesignated subsec. (j), relating to current inclusion in case of revolving credit plans, etc., as (k). - § 453(k): Pub. L. 100–647, § 2004(d)(5), struck out “and section 453A” after “subsection (a)” in second sentence. - § 453(k): Pub. L. 100–647, § 1008(g)(1), redesignated subsec. (j), relating to current inclusion in case of revolving credit plans, etc., as (k). - § 453(l)(1)(A): Pub. L. 100–647, § 2004(d)(1), inserted “of the same type” after “disposes of personal property”. ## § 453A: Special rules for nondealers - § 453A: Pub. L. 100–647, § 5076(b)(1), struck out “of real property” after “rules for nondealers” in section catchline. - § 453A(b)(1): Pub. L. 100–647, § 5076(a), amended par. (1) generally. Prior to amendment, par. (1) read as follows: “This section shall apply to any obligation which arises from the disposition of real property under the installment method which is property used in the taxpayer’s trade or business or property held for the production of rental income, but only if the sales price of such property exceeds $150,000.” - § 453A(b)(2): Pub. L. 100–647, § 2004(d)(7), inserted “and subsection (c)(4)” after “of this paragraph” in last sentence. - § 453A(b)(3): Pub. L. 100–647, § 2004(d)(8), substituted “farm property” for “personal use and farm property” in heading and amended text generally. Prior to amendment, text read as follows: “An installment obligation shall not be treated as described in paragraph (1) if it arises from the disposition— - § 453A(c): Pub. L. 100–647, § 1008(g)(2), substituted “453(k)” for “453(j)” in subsec. (c) as in effect on date before the date of enactment of Pub. L. 100–203 (Dec. 22, 1987). - § 453A(e): Pub. L. 100–647, § 2004(d)(2), added subsec. (e). ## § 453B: Gain or loss on disposition of installment obligations - § 453B(h): Pub. L. 100–647 added subsec. (h). ## § 457: Deferred compensation plans of State and local governments and tax-exempt organizations - § 457(c): Pub. L. 100–647, § 1011(e)(1), struck out “and paragraphs (2) and (3) of subsection (b)” after “of this subsection”. - § 457(c): Pub. L. 100–647, § 6071(c), substituted “rural cooperative plan” for “rural electric cooperative plan” in last sentence. - § 457(d)(1)(A): Pub. L. 100–647, § 1011(e)(2), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “the plan provides that amounts payable under the plan will be made available to participants or other beneficiaries not earlier than when the participant is separated from service with the employer or is faced with an unforeseeable emergency (determined in the manner prescribed by the Secretary by regulation), and”. - § 457(d)(2): Pub. L. 100–647, § 1011(e)(10), amended subcl. (I) generally. Prior to amendment, subcl. (I) read as follows: “at least ⅔ of the total amount payable with respect to the participant will be paid during the life expectancy of such participant (determined as of the commencement of the distribution), and”. - § 457(d): Pub. L. 100–647, § 6064(a)(2), amended subsec. (d), as in effect on the day before the date of enactment of Pub. L. 99–514 (Oct. 22, 1986), by adding par. (10) reading as follows: “Certain plans excepted.—Any bona fide vacation leave, sick leave, compensatory time, severance pay, disability pay, or death benefit plan shall be treated as a plan not providing for the deferral of compensation.” - § 457(d): Pub. L. 100–647, § 6064(b)(2), amended subsec. (d), as in effect on the day before the date of enactment of Pub. L. 99–514 (Oct. 22, 1986), by adding par. (11) reading as follows: “Exception for nonelective deferred compensation of nonemployees.— - § 457(e)(9): Pub. L. 100–647, § 1011(e)(9), inserted “after separation from service and” after “lump sum payable” in concluding provisions. - § 457(e)(11): Pub. L. 100–647, § 6064(a)(1), added par. (11). - § 457(e)(12): Pub. L. 100–647, § 6064(b)(1), added par. (12). - § 457(e)(13): Pub. L. 100–647, § 6064(c), added par. (13). ## § 460: Special rules for long-term contracts - § 460(a): Pub. L. 100–647, § 5041(a)(1), substituted “90” for “70”. - § 460(a): Pub. L. 100–647, § 5041(a)(2), substituted “10” for “30”. - § 460(a): Pub. L. 100–647, § 5041(a)(1), substituted “90” for “70” in heading and in text. - § 460(b)(2): Pub. L. 100–647, § 1008(c)(2)(B), substituted “Except as provided in paragraph (4), in” for “In”. - § 460(b)(2)(B): Pub. L. 100–647, § 1008(c)(4)(B), inserted “(or, with respect to any amount received or accrued after completion of the contract, when such amount is so received or accrued)” after “contract”. - § 460(b)(3): Pub. L. 100–647, § 1008(c)(4)(A), inserted at end “For purposes of the preceding sentence, any amount received or accrued after completion of the contract shall be taken into account by discounting (using the Federal mid-term rate determined under section 1274(d) as of the time such amount was received or accrued) such amount to its value as of the completion of the contract. The taxpayer may elect with respect to any contract to have the preceding sentence not apply to such contract.” - § 460(b)(3): Pub. L. 100–647, § 1008(c)(1)(A), substituted “paragraph” for “subparagraph”. - § 460(b)(3)(B): Pub. L. 100–647, § 1008(c)(1)(B), substituted “subparagraph (A)” for “paragraph (1)” in two places. - § 460(b)(3): Pub. L. 100–647, § 1008(c)(1)(C), substituted “subparagraph (B)” for “paragraph (1)”. - § 460(b)(4): Pub. L. 100–647, § 1008(c)(2)(A), added par. (4). - § 460(b)(5): Pub. L. 100–647, § 5041(d), added par. (5). - § 460(e)(1): Pub. L. 100–647, § 5041(b)(1), amended par. (1) generally. Prior to amendment, par. (1) read as follows: “Subsections (a), (b), and (c)(1) and (2) shall not apply to any construction contract entered into by a taxpayer— - § 460(e): Pub. L. 100–647, § 5041(b)(2), added par. (5). - § 460(e): Pub. L. 100–647, § 5041(b)(3), added par. (6). - § 460(h): Pub. L. 100–647, § 5041(c), added subsec. (h). ## § 461: General rule for taxable year of deduction - § 461(h)(5): Pub. L. 100–647, § 1018(u)(5), amended Pub. L. 99–514, § 823(b)(1). See 1986 Amendment note below. - § 461(i)(2): Pub. L. 100–647, § 1008(a)(3), amended par. (2) generally. Prior to amendment, par. (2) read as follows: “In the case of a tax shelter, economic performance with respect to the act of drilling an oil or gas well shall be treated as having occurred within a taxable year if drilling of the well commences before the close of the 90th day after the close of the taxable year.” ## § 464: Limitations on deductions for certain farming expenses - § 464: Pub. L. 100–647 added subsec. (g). ## § 467: Certain payments for the use of property or services - § 467(c)(5)(C): Pub. L. 100–647, § 1005(c)(10), made technical correction to directory language of Pub. L. 99–514, § 511(d)(2)(A). See 1986 Amendment note below. - § 467(e)(3)(A): Pub. L. 100–647, § 1002(i)(2)(H), at end of table inserted item relating to any railroad grading or tunnel bore. ## § 468B: Special rules for designated settlement funds - § 468B(b)(2): Pub. L. 100–647, § 1018(f)(4)(B), substituted “No other” for “no other” in concluding provisions. - § 468B(b)(2)(B): Pub. L. 100–647, § 1018(f)(4)(A), substituted “a corporation.” for “the corporation,”. - § 468B(d)(1)(A): Pub. L. 100–647, § 1018(f)(1), inserted “(or any related person)” after “taxpayer”. - § 468B(d)(2)(A): Pub. L. 100–647, § 1018(f)(2), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “which is established pursuant to a court order,”. - § 468B(d)(2)(E): Pub. L. 100–647, § 1018(f)(1), inserted “(or any related person)” after “taxpayer”. - § 468B(g): Pub. L. 100–647, § 1018(f)(5)(A), added subsec. (g). ## § 469: Passive activity losses and credits limited - § 469(e)(1)(A)(ii): Pub. L. 100–647, § 1005(a)(1), inserted “not derived in the ordinary course of a trade or business which is” after “gain or loss”. - § 469(g)(1)(A): Pub. L. 100–647, § 1005(a)(2)(A), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “If all gain or loss realized on such disposition is recognized, any loss from such activity which has not previously been allowed as a deduction (and in the case of a passive activity for the taxable year, any loss realized on such disposition) shall not be treated as a passive activity loss and shall be allowable as a deduction against income in the following order: - § 469(g)(1)(C): Pub. L. 100–647, § 1005(a)(2)(B), substituted “Income from prior years” for “Coordination with section 1211” in heading and amended text generally. Prior to amendment, text read as follows: “In the case of any loss realized on the disposition of an interest in a passive activity, section 1211 shall be applied before subparagraph (A) is applied.” - § 469(g)(2)(A): Pub. L. 100–647, § 1005(a)(3), substituted “paragraph (1)(A)” for “paragraph (1)” and “to losses described in paragraph (1)(A)” for “to such losses”. - § 469(g)(3): Pub. L. 100–647, § 1005(a)(4), substituted “(realized or to be realized” for “realized (or to be realized)” and “is completed)” for “is completed”. - § 469(h)(4): Pub. L. 100–647, § 1005(a)(5), inserted “only” before “if”. - § 469(i)(1): Pub. L. 100–647, § 1005(a)(6), substituted “in such taxable year (and if any portion of such loss or credit arose in another taxable year, in such other taxable year)” for “in the taxable year in which such portion of such loss or credit arose”. - § 469(i)(3)(D): Pub. L. 100–647, § 6009(c)(3), added cl. (ii) and redesignated former cls. (ii) and (iii) as (iii) and (iv), respectively. - § 469(i)(6)(C): Pub. L. 100–647, § 1005(a)(7), substituted “Except as provided in regulations, no” for “No”. - § 469(j)(6)(A): Pub. L. 100–647, § 1005(a)(8), inserted “with respect to which a deduction has not been allowed by reason of subsection (a)” after “to such interest”. - § 469(j)(10), § 469(j)(11): Pub. L. 100–647, § 1005(a)(9), added pars. (10) and (11). - § 469(j)(12): Pub. L. 100–647, § 1005(a)(11), added par. (12). - § 469(k)(3): Pub. L. 100–647, § 2004(g), added par. (3). - § 469: Pub. L. 100–647, § 1005(a)(12), substituted “interest” for “interests” in heading. - § 469: Pub. L. 100–647, § 1005(a)(12), added par. (1) and struck out former par. (1) which read as follows: “In the case of any passive activity loss or credit for any taxable year beginning in calendar years 1987 through 1990 which— - § 469: Pub. L. 100–647, § 1005(a)(12), added par. (2) and struck out former par. (2) which resulted in substituting “65”, “40”, “20”, and “10” for “35”, “60”, “80”, and “90”, respectively, in second column. - § 469: Pub. L. 100–647, § 1005(a)(12), added subpar. (A) and struck out former subpar. (A) which read as follows: “The portion of the passive activity loss for any taxable year which is attributable to pre-enactment interests shall be equal to the lesser of— ## § 501: Exemption from tax on corporations, certain trusts, etc. - § 501(c)(1): Pub. L. 100–647, § 1018(u)(15), substituted “Any” for “any”. - § 501(c)(12)(B)(iv): Pub. L. 100–647, § 2003(a)(1), added cl. (iv). - § 501(c)(12)(C): Pub. L. 100–647, § 2003(a)(2), amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: “In the case of a mutual or cooperative electric company, subparagraph (A) shall be applied without taking into account any income received or accrued from qualified pole rentals.” - § 501(c)(17)(A)(ii), § 501(c)(17)(A)(iii), § 501(c)(18)(B), § 501(c)(18)(C): Pub. L. 100–647, § 1018(u)(34), made technical amendments to Pub. L. 99–154, § 1114(b)(14). See 1986 Amendment note below. - § 501(c)(18)(D)(iv): Pub. L. 100–647, § 1011(c)(7)(D), added cl. (iv). - § 501(c)(23): Pub. L. 100–647, § 1018(u)(14), substituted “Any” for “any”. - § 501(c)(25)(A): Pub. L. 100–647, § 1016(a)(1)(A), inserted at end “For purposes of clause (iii), the term ‘real property’ shall not include any interest as a tenant in common (or similar interest) and shall not include any indirect interest.” - § 501(c)(25)(C): Pub. L. 100–647, § 1016(a)(3)(B), struck out cl. (v) which read as follows: “any organization described in this paragraph.” - § 501(c)(25)(D): Pub. L. 100–647, § 1016(a)(2), substituted “A corporation or trust shall in no event be treated as described in subparagraph (A) unless such corporation or trust permits its shareholders or beneficiaries” for “A corporation or trust described in this paragraph must permit its shareholders or beneficiaries” in introductory text. - § 501(c)(25)(E), § 501(c)(25)(F): Pub. L. 100–647, § 1016(a)(3)(A), (4), added subpars. (E) and (F). - § 501(e)(1)(A): Pub. L. 100–647, § 6202(a), inserted “(including the purchasing of insurance on a group basis)” after “purchasing”. - § 501(m)(3)(E): Pub. L. 100–647, § 1010(b)(4)(A), added subpar. (E). - § 501(m)(5): Pub. L. 100–647, § 1010(b)(4)(B), added par. (5). ## § 505: Additional requirements for organizations described in paragraph (9) or (17) of section 501(c) - § 505(a)(1): Pub. L. 100–647, § 1011B(a)(27)(C), inserted at end “This paragraph shall not apply to any organization by reason of a failure to meet the requirements of subsection (b) with respect to a benefit to which section 89 applies.” - § 505(b)(2): Pub. L. 100–647, § 1011B(a)(31)(B), substituted “there shall be” for “there may be” and “who are” for “who may be”. - § 505(b)(7): Pub. L. 100–647, § 1011B(a)(32), added par. (7). ## § 511: Imposition of tax on unrelated business income of charitable, etc., organizations - § 511: Pub. L. 100–647 struck out subsec. (d) which read as follows: “Tax Preferences.— ## § 512: Unrelated business taxable income - § 512(a)(3)(E)(ii)(II): Pub. L. 100–647 substituted “subclause (I)” for “subclause (II)” and a period for comma at end. ## § 514: Unrelated debt-financed income - § 514(c)(9)(B): Pub. L. 100–647, § 1016(a)(6), substituted “this paragraph” for “clause (vi)” in last sentence. - § 514(c)(9)(B): Pub. L. 100–647, § 1018(u)(13)(A), amended directory language of Pub. L. 99–514, § 1878(e)(1), (3), to clarify that general amendment by section 1878(e)(3) included concluding provision as well as cl. (vi) and that amendment by section 1878(e)(1) should have been to the concluding provisions as amended by section 1878(e)(3). - § 514(c)(9)(E): Pub. L. 100–647, § 1016(a)(5)(A), added subpar. (E) relating to special rules for organizations described in section 501(c)(25). - § 514(c)(9)(E)(i): Pub. L. 100–647, § 2004(h)(2), in subsec. (c)(9)(E), relating to certain allocations permitted, redesignated subcls. (II) and (III) as (I) and (II), respectively, and struck out former subcl. (I) which read as follows: “the allocation of items to any partner other than a qualified organization cannot result in such partner having a share of the overall partnership loss for any taxable year greater than such partner’s share of the overall partnership income for the taxable year for which such partner’s income share will be the smallest,”. - § 514(c)(9)(E)(iii): Pub. L. 100–647, § 2004(h)(1), in subsec. (c)(9)(E) relating to certain allocations permitted, added cl. (iii). ## § 527: Political organizations - § 527(e)(2): Pub. L. 100–647 inserted at end “Such term includes the making of expenditures relating to an office described in the preceding sentence which, if incurred by the individual, would be allowable as a deduction under section 162(a).” ## § 531: Imposition of accumulated earnings tax - § 531: Pub. L. 100–647 amended section generally. Prior to amendment, section read as follows: “In addition to other taxes imposed by this chapter, there is hereby imposed for each taxable year on the accumulated taxable income (as defined in section 535) of every corporation described in section 532, an accumulated earnings tax equal to the sum of— ## § 543: Personal holding company income - § 543(a)(1)(D): Pub. L. 100–647, § 6279(a), added subpar. (D). - § 543(c): Pub. L. 100–647, § 1010(f)(5), substituted “other than life insurance companies” for “other than life or mutual” in heading and “other than a life insurance company” for “other than life or mutual” in text. ## § 582: Bad debts, losses, and gains with respect to securities held by financial institutions - § 582(a): Pub. L. 100–647 substituted “subsections (a) and (b) of section 166” for “subsections (a), (b), and (c) of section 166”. ## § 584: Common trust funds - § 584(h): Pub. L. 100–647 added subsec. (h). ## § 585: Reserves for losses on loans of banks - § 585(c)(3)(A)(iii)(I): Pub. L. 100–647, § 1009(a)(2)(B), substituted “such higher percentage of such net amount as the taxpayer may elect” for “such greater amount as the taxpayer may designate”. - § 585(c)(3)(B)(ii): Pub. L. 100–647, § 1009(a)(2)(C), substituted “elects a higher percentage” for “designates an amount”. - § 585(c)(4): Pub. L. 100–647, § 1009(a)(3), inserted at end “If the amount of the reserve referred to in subparagraph (B) as of the close of any taxable year exceeds the outstanding balance (as of such time) of the loans referred to in subparagraph (B), such excess shall be included in gross income for such taxable year.” - § 585(c)(5)(C): Pub. L. 100–647, § 1009(a)(2)(A), added subpar. (C). ## § 593: Reserves for losses on loans - § 593(b)(2)(D)(v): Pub. L. 100–647, § 1003(c)(3), added cl. (v). - § 593(d)(4): Pub. L. 100–647, § 1006(t)(25)(B), inserted at end “For purposes of determining whether any interest in a REMIC qualifies under the preceding sentence, any interest in another REMIC held by such REMIC shall be treated as a qualifying real property loan under principles similar to the principles of the preceding sentence, except that if such REMIC’s are part of a tiered structure, they shall be treated as 1 REMIC for purposes of this paragraph.” ## § 597: Treatment of transactions in which Federal financial assistance provided - § 597: Pub. L. 100–647, § 4012(b)(2)(D)(i), substituted “FSLIC or FDIC” for “FSLIC” in section catchline. - § 597(a): Pub. L. 100–647, § 4012(b)(2)(A), inserted at end “Gross income of a bank does not include any amount of money or other property received from the Federal Deposit Insurance Corporation pursuant to sections 13(c), 15(c)(1), and 15(c)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1821(f) and 1823(c)(1) and (c)(2)), regardless of whether any note or other instrument is issued in exchange therefor.” - § 597(b): Pub. L. 100–647, § 4012(b)(2)(C), substituted “association or bank” for “association”. - § 597(c): Pub. L. 100–647, § 4012(c)(1), added subsec. (c). - § 597(d): Pub. L. 100–647, § 4012(b)(2)(B), which directed amendment of section 597(b), as amended by section 4012(c)(1) of Pub. L. 100–647, by adding at the end thereof subsec. (d), was executed by adding subsec. (d) at the end of section 597, as amended by section 4012(c)(1) of Pub. L. 100–647, as the probable intent of Congress. ## § 616: Development expenditures - § 616(e): Pub. L. 100–647 substituted “section 59(e)” for “section 58(i)”. ## § 617: Deduction and recapture of certain mining exploration expenditures - § 617: Pub. L. 100–647 substituted “section 59(e)” for “section 58(i)”. ## § 643: Definitions applicable to subparts A, B, C, and D - § 643(g)(1): Pub. L. 100–647, § 1014(d)(3)(A), struck out at end “The preceding sentence shall apply only to the extent the payments of estimated tax made by the trust for the taxable year exceed the tax imposed by this chapter shown on its return for the taxable year.” - § 643(g)(2): Pub. L. 100–647, § 1014(d)(3)(B), amended par. (2) generally. Prior to amendment, par. (2) read as follows: “An election under paragraph (1) may be made— - § 643(g)(3): Pub. L. 100–647, § 1014(d)(4), added par. (3). ## § 672: Definitions and rules - § 672(e): Pub. L. 100–647 amended subsec. (e) generally. Prior to amendment, subsec. (e) read as follows: “For purposes of this subpart, if a grantor’s spouse is living with the grantor at the time of the creation of any power or interest held by such spouse, the grantor shall be treated as holding such power or interest.” ## § 673: Reversionary interests - § 673(c), § 673(d): Pub. L. 100–647 added subsecs. (c) and (d). ## § 674: Power to control beneficial enjoyment - § 674(c): Pub. L. 100–647 inserted at end “For periods during which an individual is the spouse of the grantor (within the meaning of section 672(e)(2)), any reference in this subsection to the grantor shall be treated as including a reference to such individual.” ## § 675: Administrative powers - § 675(3): Pub. L. 100–647 inserted at end “For periods during which an individual is the spouse of the grantor (within the meaning of section 672(e)(2)), any reference in this paragraph to the grantor shall be treated as including a reference to such individual.” ## § 691: Recipients of income in respect of decedents - § 691(c)(1): Pub. L. 100–647 added subpar. (C). ## § 703: Partnership computations - § 703(b)(1): Pub. L. 100–647 substituted “subsection (b)(5)” for “subsection (b)(5) or (d)(4)”. ## § 706: Taxable years of partner and partnership - § 706(b)(1)(B)(i): Pub. L. 100–647, § 1008(e)(1)(A), amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “the taxable year of 1 or more of its partners who have an aggregate interest in partnership profits and capital of greater than 50 percent,”. - § 706(b)(1)(B)(iii): Pub. L. 100–647, § 1008(e)(2), substituted “unless the Secretary by regulations prescribes another period” for “or such other period as the Secretary may prescribe in regulations”. - § 706(b)(4): Pub. L. 100–647, § 1008(e)(1)(B), substituted “Majority interest taxable year; limitation on required changes” for “Application of majority interest rule” in heading and amended text generally. Prior to amendment, text read as follows: “Clause (i) of paragraph (1)(B) shall not apply to any taxable year of a partnership unless the period which constitutes the taxable year of 1 or more of its partners who have an aggregate interest in partnership profits and capital of greater than 50 percent has been the same for— - § 706(b)(5): Pub. L. 100–647, § 1008(e)(3), added par. (5). ## § 811: Accounting provisions - § 811(d)(1): Pub. L. 100–647 substituted “the greater of the prevailing State assumed interest rate or applicable Federal interest rate in effect under section 807 for the contract” for “the prevailing State assumed interest rate for the contract”. ## § 812: Definition of company’s share and policyholder’s share - § 812(b): Pub. L. 100–647, § 2004(p)(2), substituted “In any case where neither the prevailing State assumed interest rate nor the applicable Federal interest rate is used, another appropriate rate shall be used for purposes of subparagraph (A).” for “In any case where the prevailing State assumed rate is not used, another appropriate rate shall be treated as the prevailing State assumed rate for purposes of subparagraph (A).” - § 812: Pub. L. 100–647, § 1018(h)(1), amended subsec. (e) generally. Prior to amendment, subsec. (e) read as follows: “For purposes of this section, the term ‘gross investment income’ shall not include any dividend received by the life insurance company which is a 100-percent dividend (as defined in section 805(a)(4)(C)). Such term also shall not include any dividend described in section 805(a)(4)(D) (relating to certain dividends in the case of foreign corporations).” ## § 816: Life insurance company defined - § 816(g): Pub. L. 100–647, § 1010(f)(6), substituted “section 831” for “section 821 or section 831”. - § 816(h): Pub. L. 100–647, § 2004(q)(1), substituted “section 842(b)(2)(B)(i)” for “section 842(c)(1)(A)”. ## § 817: Treatment of variable contracts - § 817(h)(6): Pub. L. 100–647 added par. (6). ## § 818: Other definitions and special rules - § 818(a)(6): Pub. L. 100–647, § 1011(e)(5)(A), in subpar. (A) substituted “eligible deferred compensation plan” for “eligible State deferred compensation plan”, and in subpar. (B), inserted “or any organization (other than a governmental unit) exempt from tax under this subtitle,” after “foregoing,” and substituted “agency or instrumentality, or organization” for “or agency or instrumentality”. - § 818(f)(3): Pub. L. 100–647, § 1010(k), added par. (3). ## § 831: Tax on insurance companies other than life insurance companies - § 831(b)(2)(A): Pub. L. 100–647, § 1010(f)(1), inserted at end “The election under clause (ii) shall apply to the taxable year for which made and for all subsequent taxable years for which the requirements of clause (i) are met. Such an election, once made, may be revoked only with the consent of the Secretary.” - § 831(b)(3): Pub. L. 100–647, § 1010(f)(9), added par. (3). ## § 832: Insurance company taxable income - § 832(b)(5)(B)(ii)(II): Pub. L. 100–647, § 1010(d)(2), inserted “(directly or indirectly)” after “attributable”. - § 832(b)(7)(C): Pub. L. 100–647, § 1010(c)(1), substituted “insurance company taxable under section 831(a)” for “nonlife insurance company” in heading and “section 831(a)” for “this part” in text. - § 832(b)(7)(D), § 832(b)(7)(E): Pub. L. 100–647, § 1010(c)(2), added subpars. (D) and (E). - § 832(e)(5)(A): Pub. L. 100–647, § 1010(c)(3), struck out “and” after “preceding taxable year,”. - § 832(e)(5)(B): Pub. L. 100–647, § 1010(c)(3), which directed amendment of subpar. (B) by substituting a comma for the period at end, could not be executed because there was no period at end of subpar. (B). - § 832(g): Pub. L. 100–647, § 1010(d)(1), added subsec. (g). ## § 835: Election by reciprocal - § 835(a): Pub. L. 100–647, § 1010(f)(2), substituted “section 831(a)” for “section 821(a)”. - § 835(f): Pub. L. 100–647, § 1010(f)(3), substituted “subsection (d)” for “subsection (e)”. ## § 842: Foreign companies carrying on insurance business - § 842(b)(3)(B): Pub. L. 100–647, § 2004(q)(2)(A), struck out “held for the production of such income” after “same companies”. - § 842(b)(4)(B)(ii): Pub. L. 100–647, § 2004(q)(2)(B), struck out “held for the production of investment income” after “United States)”. - § 842(d)(4): Pub. L. 100–647, § 2004(q)(3), added par. (4). ## § 846: Discounted unpaid losses defined - § 846(f): Pub. L. 100–647, § 1010(e)(1), substituted “paid in the middle of the year” for “paid during the year”. - § 846: Pub. L. 100–647, § 1010(e)(2), added par. (3). ## § 851: Definition of regulated investment company - § 851(a)(1): Pub. L. 100–647, § 1006(m)(1), amended par. (1) generally. Prior to amendment, par. (1) read as follows: “which, at all times during the taxable year, is registered under the Investment Company Act of 1940, as amended (15 U.S.C. 80a–1 to 80b–2), as a management company, business development company, or unit investment trust, or”. - § 851(b): Pub. L. 100–647, § 1006(n)(1), (5), inserted at end “Income derived from a partnership or trust shall be treated as described in paragraph (2) only to the extent such income is attributable to items of income of the partnership or trust (as the case may be) which would be described in paragraph (2) if realized by the regulated investment company in the same manner as realized by the partnership or trust. In the case of the taxable year in which a regulated investment company is completely liquidated, there shall not be taken into account under paragraph (3) any gain from the sale, exchange, or distribution of any property after the adoption of the plan of complete liquidation.” - § 851(b): Pub. L. 100–647, § 1006(n)(2)(B), substituted “which are not directly related” for “which are not ancillary” in last sentence. - § 851(b)(3): Pub. L. 100–647, § 1006(n)(2)(A), amended par. (3) generally. Prior to amendment, par. (3) read as follows: “less than 30 percent of its gross income is derived from the sale or other disposition of stock or securities held for less than 3 months; and”. - § 851(e)(1): Pub. L. 100–647, § 1006(m)(2), substituted “a management company or a business development company described in subsection (a)(1)” for “a registered management company or registered business development company”. - § 851(g)(2): Pub. L. 100–647, § 1006(n)(4), substituted “contractual obligation” for “contractual option”. - § 851(h): Pub. L. 100–647, § 1006(o)(1), redesignated subsec. (q) as (h). - § 851(h): Pub. L. 100–647, § 1006(o)(2), added par. (3). - § 851: Pub. L. 100–647, § 1006(o)(1), redesignated subsec. (q) as (h). ## § 852: Taxation of regulated investment companies and their shareholders - § 852(a): Pub. L. 100–647, § 1006(l)(8), inserted at end “The Secretary may waive the requirements of paragraph (1) for any taxable year if the regulated investment company establishes to the satisfaction of the Secretary that it was unable to meet such requirements by reason of distributions previously made to meet the requirements of section 4982.” - § 852(b)(3)(C): Pub. L. 100–647, § 1006(l)(4), substituted “net capital loss or net long-term capital loss” for “net capital loss” in two places in third sentence, and “computing the taxable income of the regulated investment company” for “computing regulated investment company taxable income” in fourth sentence. - § 852(b)(5): Pub. L. 100–647, § 1011B(h)(4), substituted “section” for “paragraph”. - § 852(b)(6): Pub. L. 100–647, § 1006(l)(1)(A), redesignated par. (6), relating to time certain dividends are taken into account, as (7). - § 852(b)(7): Pub. L. 100–647, § 1006(l)(9), substituted “in October, November, or December” for “in December” and “in such a month” for “in such month”, in introductory text, “on December 31 of such calendar year” for “on such date” in subpars. (A) an (B), and “during January” for “before February 1” in last sentence. - § 852(b)(7): Pub. L. 100–647, § 1006(l)(1)(A), redesignated par. (6), relating to time certain dividends are taken into account, as (7). - § 852(b)(8): Pub. L. 100–647, § 1006(l)(7), added par. (8). - § 852(c)(2): Pub. L. 100–647, § 1006(l)(3), amended par. (2) generally. Prior to amendment, par. (2) read as follows: “A regulated investment company shall be treated as having sufficient earnings and profits to treat as a dividend any distribution (other than in a redemption to which section 302(a) applies) which is treated as a dividend by such company. The preceding sentence shall not apply to the extent that the amount distributed during any calendar year by the company exceeds the required distribution for such calendar year (as determined under section 4982).” - § 852(e)(1): Pub. L. 100–647, §§ 1006(l)(10), 1018(p), amended par. (1) identically, substituting “subsection (a)(2)” for “subsection (a)(3)” in last sentence. ## § 854: Limitations applicable to dividends received from regulated investment company - § 854(b)(3): Pub. L. 100–647 substituted “Aggregate dividends” for “Definitions” in heading and amended text generally, substituting subpars. (A) to (C) for former subpars. (A) and (B). ## § 855: Dividends paid by regulated investment company after close of taxable year - § 855(b): Pub. L. 100–647 substituted “section 852(b)(7)” for “section 852(b)(6)”. ## § 856: Definition of real estate investment trust - § 856(c)(6): Pub. L. 100–647, § 1006(t)(11), struck out subpar. (D), as added by Pub. L. 99–514, § 671(b)(1), which read as follows: “A regular or residual interest in a REMIC shall be treated as an interest in real property, and any amount includible in gross income with respect to such an interest shall be treated as interest; except that, if less than 95 percent of the assets of such REMIC are interests in real property (determined as if the taxpayer held such assets), such interest shall be so treated only in the proportion which the assets of the REMIC consist of such interests.” - § 856(c)(6): Pub. L. 100–647, § 1006(p)(1), substituted “debt instrument (within the meaning of section 1275(a)(1))” for “debt instrument”. - § 856(c)(6): Pub. L. 100–647, § 1006(p)(5), substituted “stock (or certificates of beneficial interests) in such trust” for “stock in such trust”. - § 856(c)(6): Pub. L. 100–647, § 1006(t)(11), added subpar. (E) and redesignated former subpar. (E) as (F). - § 856(c)(6): Pub. L. 100–647, § 1006(p)(4)(A), added subpar. (G). - § 856(c)(8): Pub. L. 100–647, § 1006(p)(3), added par. (8). - § 856(d)(6)(A): Pub. L. 100–647, § 1006(q)(1), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “If— - § 856(f): Pub. L. 100–647, § 1006(q)(2), amended subsec. (f) generally, making changes in content and structure. ## § 857: Taxation of real estate investment trusts and their beneficiaries - § 857(a): Pub. L. 100–647, § 1006(s)(4), inserted at end “The Secretary may waive the requirements of paragraph (1) for any taxable year if the real estate investment trust establishes to the satisfaction of the Secretary that it was unable to meet such requirements by reason of distributions previously made to meet the requirements of section 4981.” - § 857(b)(3)(C): Pub. L. 100–647, § 1018(u)(28), as amended by Pub. L. 101–508, substituted “such net capital loss shall” for “such net capital loss such”. - § 857(b)(3)(C): Pub. L. 100–647, § 1006(s)(2), substituted “the taxable income of the real estate investment trust” for “real estate investment trust taxable income”. - § 857(b)(8): Pub. L. 100–647, § 1006(s)(5), substituted “in October, November, or December” for “in December” and “in such a month” for “in such month” in introductory text, “on December 31 of such calendar year” for “on such date”, in subpars. (A) and (B), and “during January” for “before February 1” in last sentence. - § 857(e)(2)(B)(i): Pub. L. 100–647, § 1006(r), substituted “with respect to instruments” for “as original issue discount on instruments”. ## § 858: Dividends paid by real estate investment trust after close of taxable year - § 858(b): Pub. L. 100–647, § 1018(u)(27), made technical correction to directory language of Pub. L. 99–514, see 1986 Amendment note below. ## § 860A: Taxation of REMIC’s - § 860A(a): Pub. L. 100–647 substituted “this subtitle” for “this chapter” in two places. ## § 860C: Taxation of residual interests - § 860C(b)(1): Pub. L. 100–647, § 1006(t)(21), substituted “and, except as provided in regulations, in the same manner” for “and in the same manner” in introductory provisions. - § 860C(b)(1)(E): Pub. L. 100–647, § 1006(t)(8)(C), added subpar. (E). - § 860C(e)(1): Pub. L. 100–647, § 1006(t)(1), substituted “ordinary” for “ordinary income” in heading and amended text generally. Prior to amendment, text read as follows: “Any amount included in the gross income of any holder of a residual interest in a REMIC by reason of subsection (a) shall be treated as ordinary income.” ## § 860D: REMIC defined - § 860D(a): Pub. L. 100–647, § 1006(t)(19), inserted at end “In the case of a qualified liquidation (as defined in section 860F(a)(4)(A)), paragraph (4) shall not apply during the liquidation period (as defined in section 860F(a)(4)(B).” - § 860D(a)(4): Pub. L. 100–647, § 1006(t)(2)(A)(i), substituted “3rd month beginning after” for “4th month ending after”. - § 860D(a)(4): Pub. L. 100–647, § 1006(t)(2)(A)(ii), substituted “and at all times thereafter” for “and each quarter ending thereafter”. - § 860D(a)(6): Pub. L. 100–647, § 1006(t)(16)(A), added par. (6). ## § 860E: Treatment of income in excess of daily accruals on residual interests - § 860E(a)(3), § 860E(a)(4): Pub. L. 100–647, § 1006(t)(15), added pars. (3) and (4). - § 860E(a): Pub. L. 100–647, § 1006(t)(27), added par. (5). - § 860E(c)(2)(B): Pub. L. 100–647, § 1006(t)(13), (17), substituted “issue price of the residual interest (adjusted for contributions)” for “issue price of residual interest” in introductory text, and in cl. (ii) inserted “(but not below zero)” after “decreased”. - § 860E(d): Pub. L. 100–647, § 1006(t)(23), inserted at end “Rules similar to the rules of the preceding sentence shall apply also in the case of regulated investment companies, common trust funds, and organizations to which part I of subchapter T applies.” - § 860E(e): Pub. L. 100–647, § 1006(t)(16)(B), added subsec. (e). - § 860E(f): Pub. L. 100–647, § 1006(t)(26), added subsec. (f). ## § 860F: Other rules - § 860F(a)(2)(A): Pub. L. 100–647, § 1006(t)(3)(B)(i), struck out at end “Notwithstanding the preceding sentence, the term ‘prohibited transaction’ shall not include any disposition required to prevent default on a regular interest where the threatened default resulted from a default on 1 or more qualified mortgages.” - § 860F(a)(2)(A)(i): Pub. L. 100–647, § 1006(t)(3)(A), amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “the substitution of a qualified replacement mortgage for a qualified mortgage,”. - § 860F(a)(2)(A)(iii): Pub. L. 100–647, § 1006(t)(22)(B), (C), substituted “REMIC” for “real estate mortgage pool”. - § 860F(a)(2)(D): Pub. L. 100–647, § 1006(t)(3)(C), struck out “described in subsection (b)” before period at end. - § 860F(a)(5): Pub. L. 100–647, § 1006(t)(3)(B)(ii), added par. (5). - § 860F(b)(1)(A): Pub. L. 100–647, § 1006(t)(4), substituted “the transfer of any property to a REMIC in exchange for regular or residual interests in such REMIC” for “the transfer of any property to a REMIC”. - § 860F(b)(1)(C)(ii): Pub. L. 100–647, § 1006(t)(22)(D), substituted “REMIC” for “real estate mortgage pool”. - § 860F(b)(1)(D)(ii): Pub. L. 100–647, § 1006(t)(14), (22)(E), amended cl. (ii) identically, substituting “REMIC” for “real estate mortgage pool”. - § 860F(e): Pub. L. 100–647, § 1006(t)(18)(A), inserted at end “Such return shall be filed by the REMIC. The determination of who may sign such return shall be made without regard to the first sentence of this subsection.” ## § 860G: Other definitions and special rules - § 860G(a)(1): Pub. L. 100–647, § 1006(t)(5)(A), amended par. (1) generally. Prior to amendment, par. (1) read as follows: “The term ‘regular interest’ means an interest in a REMIC the terms of which are fixed on the startup day, and which— - § 860G(a)(2): Pub. L. 100–647, § 1006(t)(5)(B), amended par. (2) generally. Prior to amendment, par. (2) read as follows: “The term ‘residual interest’ means an interest in a REMIC which is not a regular interest and is designated as a residual interest.” - § 860G(a)(3): Pub. L. 100–647, § 1006(t)(6)(B), inserted at end “For purposes of this subparagraph, any obligation secured by stock held by a person as a tenant-stockholder (as defined in section 216) in a cooperative housing corporation (as so defined) shall be treated as secured by an interest in real property.” - § 860G(a)(3)(A): Pub. L. 100–647, § 1006(t)(6)(A), struck out “directly or indirectly,”. - § 860G(a)(3)(A)(i): Pub. L. 100–647, § 1006(t)(5)(C)(i), substituted “on the startup day in exchange for regular or residual interests in the REMIC” for “on or before the startup day”. - § 860G(a)(3)(A)(ii): Pub. L. 100–647, § 1006(t)(5)(C)(ii), inserted before comma at end “if, except as provided in regulations, such purchase is pursuant to a fixed-price contract in effect on the startup day”. - § 860G(a)(3)(C): Pub. L. 100–647, § 1006(t)(5)(C)(iii), substituted “on the startup day in exchange for regular or residual interests in the REMIC” for “on or before the startup day”. - § 860G(a)(4)(A): Pub. L. 100–647, § 1006(t)(5)(D), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “which would be described in paragraph (3)(A) if it were transferred to the REMIC on or before the startup day, and”. - § 860G(a)(7)(B): Pub. L. 100–647, § 1006(t)(7), inserted before period at end of first sentence “or lower than expected returns on cash flow investments”. - § 860G(a)(8): Pub. L. 100–647, § 1006(t)(8)(A), substituted “section 856(e) (without regard to paragraph (5) thereof)” for “section 856(e)” in subpar. (A) and amended last sentence generally. Prior to amendment, last sentence read as follows: “Property shall cease to be foreclosure property with respect to the REMIC on the date which is 1 year after the date such real estate mortgage pool acquired such property.” - § 860G(a)(9): Pub. L. 100–647, § 1006(t)(5)(E), amended par. (9) generally. Prior to amendment, par. (9) read as follows: “The term ‘startup day’ means any day selected by a REMIC which is on or before the 1st day on which interests in such REMIC are issued.” - § 860G(c): Pub. L. 100–647, § 1006(t)(8)(B), added subsec. (c). Former subsec. (c) redesignated (d). - § 860G(d): Pub. L. 100–647, § 1006(t)(9)(A), added subsec. (d). Former subsec. (d) redesignated (e). - § 860G(d): Pub. L. 100–647, § 1006(t)(8)(B), redesignated former subsec. (c) as (d). - § 860G(e): Pub. L. 100–647, § 1006(t)(9)(A), redesignated former subsec. (d) as (e). - § 860G(e)(4), § 860G(e)(5): Pub. L. 100–647, § 1006(t)(10), added pars. (4) and (5). ## § 861: Income from sources within the United States - § 861(a)(2)(B): Pub. L. 100–647, § 1012(q)(7), substituted “other than income described in section 884(d)(2)” for “other than under section 884(d)(2)” in two places. - § 861(a)(2)(C): Pub. L. 100–647, § 1012(q)(15), substituted “section 243(e)” for “section 243(d)”. - § 861(a)(6): Pub. L. 100–647, § 1018(u)(39), substituted “inventory property” for “personal property” in heading. - § 861(a)(7): Pub. L. 100–647, § 1012(i)(10), amended par. (7) generally. Prior to amendment, par. (7) read as follows: “Amounts received as underwriting income (as defined in section 832(b)(3)) derived from the insurance of United States risks (as defined in section 953(a)).” - § 861(c): Pub. L. 100–647, § 1012(g)(3), inserted “or, in the case of a corporation, is attributable to income so derived by a subsidiary of such corporation” after parenthetical in cl. (i), struck out “or chain of subsidiaries of such corporation” after “by a subsidiary” in cl. (ii), and inserted sentence at end defining “subsidiary”. - § 861(c): Pub. L. 100–647, § 1012(i)(14)(B), amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “such section shall be applied by substituting ‘10 percent’ for ‘50 percent’ each place it appears.” - § 861: Pub. L. 100–647, § 1012(g)(9), added subsec. (f). ## § 862: Income from sources without the United States - § 862: Pub. L. 100–647 repealed subsec. (c) which read as follows: ## § 863: Special rules for determining source - § 863: Pub. L. 100–647, § 1012(e)(3)(A), substituted “Special rules for determining source” for “Item not specified in section 861 or 862” in section catchline. - § 863(e)(2): Pub. L. 100–647, § 1012(f), substituted “foreign country (or possession of the United States)” for “foreign country” in two places. ## § 864: Definitions and special rules - § 864(b)(2)(A)(ii): Pub. L. 100–647, § 1012(p)(30), substituted “section 542(c)(7), 542(c)(10),” for “section 542(c)(7)”. - § 864(c)(2): Pub. L. 100–647, § 1012(g)(5), struck out at end “In applying this paragraph and paragraph (4), interest referred to in section 861(a)(1)(A) shall be considered income from sources within the United States.” - § 864(c)(4)(B)(i), § 864(c)(4)(B)(ii): Pub. L. 100–647, § 1012(d)(10), struck out “(including any gain or loss realized on the sale or exchange of such property)” after “section 862(a)(4)” in cl. (i) and “, or gain or loss from the sale or exchange of stock or notes, bonds, or other evidences of indebtedness” after “dividends or interest” in cl. (ii). - § 864(c)(4)(B)(iii): Pub. L. 100–647, § 1012(d)(7), added cl. (iii). - § 864(c)(6): Pub. L. 100–647, § 1012(r)(2), amended par. (6) generally. Prior to amendment, par. (6) read as follows: “For purposes of this title, any income or gain of a nonresident alien individual or a foreign corporation for any taxable year which is attributable to a sale or exchange of property or the performance of services (or any other transaction) in any other taxable year shall be treated as effectively connected with the conduct of a trade or business within the United States if it would have been so treated if such income or gain were taken into account in such other taxable year.” - § 864(c)(7): Pub. L. 100–647, § 1012(r)(1), amended par. (7) generally. Prior to amendment, par. (7) read as follows: “For purposes of this title, if any property ceases to be used or held for use in connection with the conduct of a trade or business within the United States, the determination of whether any income or gain attributable to a sale or exchange of such property occurring within 10 years after such cessation is effectively connected with the conduct of a trade or business within the United States shall be made as if such sale or exchange occurred immediately before such cessation.” - § 864(d)(5)(A): Pub. L. 100–647, § 1012(a)(1)(B), substituted “(C)(iii)(III)” for “(C)(iii)”. - § 864(e): Pub. L. 100–647, § 1012(h)(6)(B), struck out “(except as provided in regulations)” after “subchapter”. - § 864(e)(1): Pub. L. 100–647, § 1012(h)(2)(A), struck out “from sources outside the United States” after “affiliated group”. - § 864(e)(3): Pub. L. 100–647, § 1012(h)(3), inserted sentence at end and struck out former last sentence which read as follows: “A similar rule shall apply in the case of any dividend (other than a qualifying dividend as defined in section 243(b)) for which a deduction is allowable under section 243 or 245(a) and any stock the dividends on which would be so deductible and would not be qualifying dividends (as so defined).” - § 864(e)(4): Pub. L. 100–647, § 1012(h)(1), substituted “nonaffiliated 10-percent owned corporations” for “certain corporations” in heading and amended text generally. Prior to amendment, text read as follows: “For purposes of allocating and apportioning expenses on the basis of assets, the adjusted basis of any asset which is stock in a corporation which is not included in the affiliated group and in which members of the affiliated group own 10 percent or more of the total combined voting power of all classes of stock entitled to vote in such corporation shall be— - § 864(e)(5)(B): Pub. L. 100–647, § 1012(h)(4)(B), inserted at end “This subparagraph shall not apply for purposes of paragraph (6).” - § 864(e)(5)(D): Pub. L. 100–647, § 1012(h)(4)(A), added subpar. (D). - § 864(e)(6): Pub. L. 100–647, § 1012(h)(5), substituted “directly allocable or apportioned” for “directly allocable and apportioned”. - § 864(e)(7)(D), § 864(e)(7)(E), § 864(e)(7)(F): Pub. L. 100–647, § 1012(h)(6)(A), added subpars. (D) to (F). ## § 865: Source rules for personal property sales - § 865(d)(2): Pub. L. 100–647, § 1012(d)(12), inserted “franchise,” after “trade brand,”. - § 865(d)(4): Pub. L. 100–647, § 1012(d)(1), added par. (4). - § 865(e)(1)(A): Pub. L. 100–647, § 1012(d)(2), (9), substituted “(d)(1)(B) or (3)” for “(d)” and “in a foreign country” for first reference to “outside the United States”. - § 865(e)(2)(B): Pub. L. 100–647, § 1012(d)(5), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “Subparagraph (A) shall not apply to— - § 865(f): Pub. L. 100–647, § 1012(d)(4), amended subsec. (f) generally. Prior to amendment, subsec. (f) read as follows: “If— - § 865(g)(1)(A)(i): Pub. L. 100–647, § 1012(d)(11), amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “any individual who has a tax home (as defined in section 911(d)(3)) in the United States, and”. - § 865(g)(1)(A)(ii): Pub. L. 100–647, § 1012(d)(3)(A), struck out “partnership,” after “corporation,”. - § 865(g)(3): Pub. L. 100–647, § 1012(d)(6)(A), added par. (3). - § 865(h): Pub. L. 100–647, § 1012(d)(8), added subsec. (h) and redesignated former subsec. (h) as (i). - § 865(h): Pub. L. 100–647, § 1012(d)(3)(B), added par. (5) to subsec. (h) prior to redesignation as subsec. (i). - § 865(i): Pub. L. 100–647, § 1012(d)(8), redesignated former subsec. (h) as (i). Former subsec. (i) redesignated (j). - § 865(i): Pub. L. 100–647, § 1012(d)(6)(B), added par. (3) to subsec. (i) prior to redesignation as subsec. (j). - § 865(i)(5): Pub. L. 100–647, § 1012(d)(3)(B), added par. (5) to subsec. (h) prior to redesignation as subsec. (i). - § 865(j): Pub. L. 100–647, § 1012(d)(8), redesignated former subsec. (i) as (j). Former subsec. (j) redesignated (k). - § 865(j)(3): Pub. L. 100–647, § 1012(d)(6)(B), added par. (3) to subsec. (i) prior to redesignation as subsec. (j). - § 865(k): Pub. L. 100–647, § 1012(d)(8), redesignated former subsec. (j) as (k). ## § 871: Tax on nonresident alien individuals - § 871(c): Pub. L. 100–647, § 1001(d)(2)(B), substituted “the second sentence of section 1441(b)” for “section 1441(b)(1) or (2)”, and “(F), (J), or (M)” for “(F) or (J)” in two places. - § 871(j), § 871(k): Pub. L. 100–647, § 6134(a)(1), added subsec. (j) and redesignated former subsec. (j) as (k). ## § 872: Gross income - § 872(a): Pub. L. 100–647, § 1012(s)(2)(A), inserted “, except where the context clearly indicates otherwise” after “individual”. - § 872(b)(1), § 872(b)(2): Pub. L. 100–647, § 1012(e)(2)(B), (5), substituted “to individual residents of the United States” for “to citizens of the United States and to corporations organized in the United States” and “international operation” for “operation”. ## § 881: Tax on income of foreign corporations not connected with United States business - § 881(c)(4): Pub. L. 100–647 added cls. (ii) and (iii) and struck out former cls. (ii) to (v), which read as follows: ## § 882: Tax on income of foreign corporations connected with United States business - § 882(a)(1): Pub. L. 100–647, § 2001(c)(2), inserted reference to section 59A. - § 882(b): Pub. L. 100–647, § 1012(s)(2)(B), inserted “, except where the context clearly indicates otherwise” after “foreign corporation”. - § 882(e): Pub. L. 100–647, § 6133(a), substituted “interest on obligations of the United States which is not portfolio interest (as defined in section 881(c)(2))” for “interest on obligations of the United States”, and struck out at end “The preceding sentence shall not apply to any Guam corporation which is treated as not being a foreign corporation by section 881(b)(1) for the taxable year.” ## § 883: Exclusions from gross income - § 883(a)(1), § 883(a)(2): Pub. L. 100–647, § 1012(e)(2)(A), (5), struck out “to citizens of the United States and” after “exemption” and substituted “international operation” for “operation”. - § 883(c)(1): Pub. L. 100–647, § 1012(e)(1)(B), substituted “Paragraph (1) or (2) of subsection (a) (as the case may be)” for “Paragraphs (1) and (2) of subsection (a)” and “such paragraph” for “such paragraphs (1) and (2)”. - § 883(c)(3): Pub. L. 100–647, § 1012(e)(1)(A), substituted “Special rules” for “Exception” in heading and amended text generally. Prior to amendment, text read as follows: “Paragraph (1) shall not apply to any foreign corporation— ## § 884: Branch profits tax - § 884(b)(2)(B): Pub. L. 100–647, § 1012(q)(1)(A), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “The increase under subparagraph (A) for any taxable year shall not exceed the aggregate reductions under paragraph (1) for prior taxable years to the extent not previously taken into account under subparagraph (A).” - § 884(d)(2)(E): Pub. L. 100–647, § 6133(b), added subpar. (E). - § 884(e)(1): Pub. L. 100–647, § 1012(q)(2)(A), amended par. (1) generally. Prior to amendment, par. (1) read as follows: “No income tax treaty between the United States and a foreign country shall exempt any foreign corporation from the tax imposed by subsection (a) (or reduce the amount thereof) unless— - § 884(e)(3): Pub. L. 100–647, § 1012(q)(2)(B), substituted “withholding tax” for “2nd tier withholding tax” in heading and amended text generally. Prior to amendment, text read as follows: - § 884(e)(4)(A)(i), § 884(e)(4)(A)(ii): Pub. L. 100–647, § 1012(q)(5), substituted “50 percent or more” for “more than 50 percent” in cl. (i) and “citizens or residents of the United States” for “the United States” in cl. (ii). - § 884(e)(4)(C), § 884(e)(4)(D): Pub. L. 100–647, § 1012(q)(4), added subpar. (C) and redesignated former subpar. (C) as (D). - § 884(e)(5): Pub. L. 100–647, § 1012(q)(6), added par. (5). - § 884(f)(1): Pub. L. 100–647, § 1012(f)(3)(A), (14), substituted “this subtitle” for “sections 871, 881, 1441, and 1442” and inserted “(or having gross income treated as effectively connected with the conduct of a trade or business in the United States)” after “United States”. - § 884(f)(1): Pub. L. 100–647, § 1012(q)(2)(C)(i), (3)(B), inserted sentence at end and struck out former last sentence which read as follows: “Rules similar to the rules of subsection (e)(3)(B) shall apply to interest described in the preceding sentence.” - § 884(f)(3): Pub. L. 100–647, § 1012(q)(2)(C)(ii), added par. (3). ## § 887: Imposition of tax on gross transportation income of nonresident aliens and foreign corporations - § 887(b)(1): Pub. L. 100–647 substituted “under section 863(c)(2)” for “under section 863(c)” and inserted at end “To the extent provided in regulations, such term does not include any income of a kind to which an exemption under paragraph (1) or (2) of section 883(a) would not apply.” ## § 892: Income of foreign governments and of international organizations - § 892(a)(2)(A): Pub. L. 100–647, § 1012(t)(1), (2), as amended by Pub. L. 101–508, amended cl. (ii) generally and added cl. (iii). Prior to amendment, cl. (ii) read as follows: “received from or by a controlled commercial entity.” - § 892(a)(3): Pub. L. 100–647, § 1012(t)(3), added par. (3). ## § 893: Compensation of employees of foreign governments or international organizations - § 893(c): Pub. L. 100–647 added subsec. (c). ## § 894: Income affected by treaty - § 894(a): Pub. L. 100–647 substituted “Treaty provisions” for “Income affected by treaty” in heading and amended text generally. Prior to amendment, text read as follows: “Income of any kind, to the extent required by any treaty obligation of the United States, shall not be included in gross income and shall be exempt from taxation under this subtitle.” ## § 897: Disposition of investment in United States real property - § 897(l): Pub. L. 100–647 struck out subsec. (l) which provided special rule for certain United States shareholders of liquidating foreign corporations. ## § 901: Taxes of foreign countries and of possessions of United States - § 901(g)(2): Pub. L. 100–647, § 1012(j), inserted “(as in effect on the day before the date of the enactment of the Tax Reform Act of 1986)” after “section 957(c)”. - § 901(j)(3): Pub. L. 100–647, § 2003(c)(1), inserted “, etc.” at end of heading and substituted “Sections 275 and 78” for “Section 275” in text. ## § 903: Credit for taxes in lieu of income, etc., taxes - § 903: Pub. L. 100–647 substituted “this part” for “this subpart”. ## § 904: Limitation on credit - § 904(b)(2): Pub. L. 100–647, § 1003(b)(2)(A), amended par. (2) generally, substituting general provisions and provisions setting special rules where there is a capital gain rate differential for provisions for corporations and for other taxpayers. - § 904(b)(3)(D): Pub. L. 100–647, § 1003(b)(2)(B), added subpar. (D) and struck out former subpar. (D), Rate differential portion, which read as follows: “The ‘rate differential portion’ of foreign source net capital gain, net capital gain, or the excess of net capital gain from sources within the United States over net capital gain, as the case may be, is the same proportion of such amount as the excess of the highest rate of tax specified in section 11(b) over the alternative rate of tax under section 1201(a) bears to the highest rate of tax specified in section 11(b).” - § 904(b)(3)(D): Pub. L. 100–647, § 2004(l), substituted “section 11(b)(1)” for “section 11(b)”. - § 904(b)(3)(E): Pub. L. 100–647, § 1003(b)(2)(B), added subpar. (E). - § 904(d)(1): Pub. L. 100–647, § 1012(a)(11), inserted “in the case of a corporation,” before “dividends”. - § 904(d)(2)(A)(ii): Pub. L. 100–647, § 1012(a)(6)(A), (p)(29)(A), substituted “Except as provided in clause (iii), the term” for “The term” and “or, except as provided in subparagraph (E)(iii) or paragraph (3)(I), section 1293” for “or section 1293”. - § 904(d)(2)(A): Pub. L. 100–647, § 1012(a)(6)(B), added cl. (iv). - § 904(d)(2)(B)(iii): Pub. L. 100–647, § 1012(a)(8), amended cl. (iii) generally. Prior to amendment, cl. (iii) read as follows: “The Secretary may by regulations provide that amounts (not otherwise high withholding tax interest) shall be treated as high withholding tax interest where necessary to prevent avoidance of the purposes of this subparagraph.” - § 904(d)(2)(C): Pub. L. 100–647, § 1012(a)(1)(A), amended subpar. (C) generally, revising and restating as cls. (i) to (iii) provisions of former cls. (i) to (iv). - § 904(d)(2)(D): Pub. L. 100–647, § 1012(a)(2), provided for exclusion from term “shipping income” any dividend from a noncontrolled section 902 corporation and any financial services income. - § 904(d)(2)(E)(i): Pub. L. 100–647, § 1012(a)(10), inserted “and except as provided in regulations, the taxpayer was a United States shareholder in such corporation” before period at end. - § 904(d)(2)(E): Pub. L. 100–647, § 1012(p)(29)(B), added cl. (iii). - § 904(d)(2)(I): Pub. L. 100–647, § 1012(a)(9), substituted “except that—” for “except to the extent that—”, added subcls. (I) to (III), and struck out former subcls. (I) and (II) which read as follows: - § 904(d)(3)(E): Pub. L. 100–647, § 1012(a)(4), inserted first sentence, struck out former first sentence which read “If a controlled foreign corporation meets the requirements of section 954(b)(3)(A) (relating to de minimis rule) for any taxable year, for purposes of this paragraph, none of its income for such taxable year shall be treated as income in a separate category.”, and in second sentence substituted “passive income” for “income (other than high withholding tax interest and dividends from a noncontrolled section 902 corporation)”. - § 904(d)(3)(F): Pub. L. 100–647, § 1012(a)(7), amended subpar. (F) generally. Prior to amendment, subpar. (F) read as follows: “For purposes of this paragraph, the term ‘separate category’ means any category of income described in subparagraph (A), (B), (C), (D), or (E) of paragraph (1).” - § 904(d)(3)(H): Pub. L. 100–647, § 1012(a)(3), added subpar. (H). - § 904(d)(3): Pub. L. 100–647, § 1012(p)(11), added subpar. (I). - § 904(f)(5)(F): Pub. L. 100–647, § 1012(c), added subpar. (F). - § 904(g): Pub. L. 100–647, § 1012(q)(12), substituted “861(a)(1)(A)” for “861(a)(1)(B)”. - § 904(g): Pub. L. 100–647, § 1012(bb)(4)(A), added par. (10) and redesignated former par. (10) as (11). ## § 906: Nonresident alien individuals and foreign corporations - § 906(b)(6), § 906(b): Pub. L. 100–647 redesignated par. (6), relating to credit against tax imposed by section 884, as (7). ## § 907: Special rules in case of foreign oil and gas income - § 907(c)(3): Pub. L. 100–647, § 1012(g)(6)(B), struck out “and dividends described in subparagraph (B)” after “described in subparagraph (A)” in closing provisions. - § 907(c)(3)(B), § 907(c)(3)(C), § 907(c)(3): Pub. L. 100–647, § 1012(g)(6)(A), redesignated subpars. (C) and (D) as (B) and (C), respectively, and struck out former subpar. (B) which read as follows: “dividends from a domestic corporation which are treated under section 861(a)(2)(A) as income from sources without the United States,”. ## § 912: Exemption for certain allowances - § 912(2): Pub. L. 100–647 inserted “(or in the case of judicial officers or employees of the United States, in accordance with rules similar to such regulations)” after “President”. ## § 932: Coordination of United States and Virgin Islands income taxes - § 932(c)(2): Pub. L. 100–647, § 1012(w)(3), substituted “an income tax return” for “his income tax return”. - § 932(c)(4): Pub. L. 100–647, § 1012(w)(2), amended par. (4) generally. Prior to amendment, par. (4) read as follows: “In the case of an individual who is a bona fide resident of the Virgin Islands at the close of the taxable year and who, on his return of income tax to the Virgin Islands, reports income from all sources and identifies the source of each item shown on such return, for purposes of calculating income tax liability to the United States gross income shall not include any amount included in gross income on such return.” - § 932(e): Pub. L. 100–647, § 1012(w)(1), substituted current heading for “Section not to apply to tax imposed in Virgin Islands” and amended text generally. Prior to amendment, text read as follows: “This section shall not apply for purposes of determining income tax liability incurred to the Virgin Islands.” ## § 951: Amounts included in gross income of United States shareholders - § 951(b): Pub. L. 100–647 substituted “section 957(c)” for “section 957(d)”. ## § 952: Subpart F income defined - § 952(c)(1)(B)(ii): Pub. L. 100–647, § 1012(i)(24), inserted at end “In determining the deficit attributable to qualified activities described in clause (iii)(III) or (IV), deficits in earnings and profits (to the extent not previously taken into account under this section) for taxable years beginning after 1962 and before 1987 also shall be taken into account. In the case of the qualified activity described in clause (iii)(II), the rule of the preceding sentence shall apply, except that ‘1982’ shall be substituted for ‘1962’.” - § 952(c)(1)(B)(iii)(III), § 952(c)(1)(B)(iii)(IV), § 952(c)(1)(B)(iii): Pub. L. 100–647, § 1012(i)(22), (23), added subcls. (III) and (IV), redesignated former subcl. (III) as (V) and substituted “insurance income or foreign personal holding company income,” for “insurance income”, and redesignated former subcl. (IV) as (VI). - § 952(c)(1)(B)(vii): Pub. L. 100–647, § 6131(a), added cl. (vii). - § 952(c)(1)(C): Pub. L. 100–647, § 1012(i)(25)(A), added subpar. (C). - § 952(c)(3): Pub. L. 100–647, § 1012(i)(16), added par. (3). ## § 953: Insurance income - § 953(b)(1): Pub. L. 100–647, § 1012(i)(7)(A), redesignated par. (2) as (1) and struck out former par. (1) which read as follows: “A corporation which would, if it were a domestic insurance corporation, be taxable under part II of subchapter L shall apply subsection (a) as if it were taxable under part III of subchapter L.” - § 953(b)(1)(A): Pub. L. 100–647, § 1012(i)(7)(B), added subpar. (A) and struck out former subpar. (A) which read as follows: “The special life insurance company deduction and the small life insurance company deduction.” - § 953(b)(2), § 953(b)(3), § 953(b)(4): Pub. L. 100–647, § 1012(i)(7)(A), (C), redesignated pars. (3) and (4) as (2) and (3), respectively, and struck out “(other than those taken into account under paragraph (3))” after “and deductions” in par. (3). Former par. (2) redesignated (1). - § 953(c)(1)(C): Pub. L. 100–647, § 1012(i)(2)(A), added subpar. (C). - § 953(c)(2): Pub. L. 100–647, § 1012(i)(3)(A), (4)(B), (5), substituted “insurance income (within the meaning of subsection (a)) attributable” for “insurance income attributable”, “with respect to which the person (directly or indirectly) insured is” for “with respect to which the primary insured is”, and “related person” for “related person (within the meaning of section 954(d)(3))”. - § 953(c)(3)(A): Pub. L. 100–647, § 1012(i)(3)(B), (4)(B), substituted “persons who are (directly or indirectly) insured” for “persons who are the primary insured” and “to any such person” for “(within the meaning of section 954(d)(3)) to any such primary insured”. - § 953(c)(3)(B): Pub. L. 100–647, § 1012(i)(8), substituted “related person insurance income (determined on a gross basis)” for “related person insurance income” and “its insurance income (as so determined)” for “its insurance income”. - § 953(c)(3)(C): Pub. L. 100–647, § 1012(i)(1)(A), (9), substituted “all benefits (other than with respect to section 884)” for “all benefits” and “granted by the United States under any treaty” for “under any income tax treaty” in cl. (i)(II) and inserted at end “An election under this subparagraph made for any taxable year shall not be effective if the corporation (or any predecessor thereof) was a disqualified corporation for the taxable year for which the election was made or for any prior taxable year beginning after 1986.” - § 953(c)(3)(D)(i): Pub. L. 100–647, § 1012(i)(1)(B), substituted “Period during which election in effect” for “Election irrevocable” in heading and amended text generally. Prior to amendment, text read as follows: “Any election under subparagraph (C) shall apply to the taxable year for which made and all subsequent taxable years unless revoked with the consent of the Secretary.” - § 953(c)(3)(E): Pub. L. 100–647, § 1012(i)(1)(C), added subpar. (E). - § 953(c)(5): Pub. L. 100–647, § 1012(i)(2)(B), added par. (5) and redesignated former par. (5) as (6). - § 953(c)(6): Pub. L. 100–647, § 1012(i)(4)(A), added par. (6) and redesignated former par. (6) as (7). - § 953(c)(6): Pub. L. 100–647, § 1012(i)(2)(B), redesignated former par. (5) as (6). - § 953(c)(7): Pub. L. 100–647, § 1012(i)(21), added par. (7) and struck out former par. (7) “Regulations”, which read as follows: “The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this subsection, including regulations preventing the avoidance of this subsection through cross insurance arrangements or otherwise.” - § 953(c)(7): Pub. L. 100–647, § 1012(i)(4)(A), redesignated former par. (6) as (7). - § 953(c)(8): Pub. L. 100–647, § 1012(i)(21), added par. (8). - § 953(d): Pub. L. 100–647, § 6135(a), added subsec. (d). ## § 954: Foreign base company income - § 954(b): Pub. L. 100–647, § 1012(i)(12), struck out “(determined without regard to the exclusion under paragraph (2) of this subsection)” after “paragraph (4) of subsection (a)”. - § 954(c)(1)(B): Pub. L. 100–647, § 1012(i)(18), (20), added cl. (ii), redesignated former cl. (ii) as (iii), added closing provisions, and struck out former closing provisions which read as follows: “This subparagraph shall not apply to gain from the sale or exchange of any property which, in the hands of the taxpayer, is property described in section 1221(1) or to gain from the sale or exchange of any property by a regular dealer in such property.” - § 954(c)(3)(B): Pub. L. 100–647, § 1012(i)(25)(B), inserted before period at end “or creates (or increases) a deficit which under section 952(c) may reduce the subpart F income of the payor or another controlled foreign corporation”. - § 954(d)(3): Pub. L. 100–647, § 1012(i)(14)(A), substituted “more than 50 percent” for “50 percent or more” in last two sentences. - § 954(e): Pub. L. 100–647, § 1018(u)(38), related to execution of amendment by Pub. L. 99–514, § 1221(b)(3)(B), see 1986 Amendment note below. ## § 959: Exclusion from gross income of previously taxed earnings and profits - § 959(e): Pub. L. 100–647 substituted “such person (or, in any case to which section 1248(e) applies, of the domestic corporation referred to in section 1248(e)(2)) under” for “such person under”. ## § 962: Election by individuals to be subject to tax at corporate rates - § 962(a)(1): Pub. L. 100–647 substituted “sections 1 and 55” and “sections 11 and 55” for “section 1” and “section 11”, respectively. ## § 964: Miscellaneous provisions - § 964(d): Pub. L. 100–647 added subsec. (d). ## § 986: Determination of foreign taxes and foreign corporation’s earnings and profits - § 986: Pub. L. 100–647 substituted “foreign taxes and foreign corporation’s earnings and profits” for “foreign corporation’s earnings and profits and foreign taxes” in heading, and revised and restructured the provisions of subsecs. (a) and (b). ## § 987: Branch transactions - § 987: Pub. L. 100–647 struck out par. (4) which provided for translation of foreign income taxes paid by each qualified business unit of the taxpayer in the same manner as provided under section 986(b). ## § 988: Treatment of certain foreign currency transactions - § 988(a)(3)(B)(i): Pub. L. 100–647, § 1012(v)(8), inserted at end “If an individual does not have a tax home (as so defined), the residence of such individual shall be the United States if such individual is a United States citizen or a resident alien and shall be a country other than the United States if such individual is not a United States citizen or a resident alien.” - § 988(a)(3)(B)(iii): Pub. L. 100–647, § 1012(v)(7), added cl. (iii). - § 988(b)(3): Pub. L. 100–647, § 1012(v)(3)(A), added par. (3). - § 988(c)(1)(B)(iii): Pub. L. 100–647, § 6130(a), struck out “unless such instrument would be marked to market under section 1256 if held on the last day of the taxable year” after “similar financial instrument”. - § 988(c)(1)(B)(iii): Pub. L. 100–647, § 1012(v)(6), amended cl. (iii) generally. Prior to amendment, cl. (iii) read as follows: “Entering into or acquiring any forward contract, futures contract, option, or similar financial instrument if such instrument is not marked to market at the close of the taxable year under section 1256.” - § 988(c)(1)(C)(i)(II): Pub. L. 100–647, § 1012(v)(3)(B), amended subcl. (II) generally. Prior to amendment, subcl. (II) read as follows: “for purposes of determining the foreign currency gain or loss from such transaction, paragraphs (1) and (2) of subsection (b) shall be applied by substituting ‘acquisition date’ for ‘booking date’ and ‘disposition’ for ‘payment date’.” - § 988(c)(1)(D), § 988(c)(1)(E): Pub. L. 100–647, § 6130(b), added subpars. (D) and (E). - § 988(c)(2): Pub. L. 100–647, § 1012(v)(3)(C), struck out subpar. (C) which defined “booking date” in the case of a transaction described in par. (1)(B)(iii) as the date on which the position is entered into or acquired. - § 988(c)(3): Pub. L. 100–647, § 1012(v)(3)(D), amended par. (3) generally. Prior to amendment, par. (3) read as follows: “The term ‘payment date’ means— - § 988(c)(5): Pub. L. 100–647, § 1012(v)(2)(A), added par. (5). - § 988(d)(1): Pub. L. 100–647, § 1012(v)(4), substituted “this subtitle” for “this section”. ## § 989: Other definitions and special rules - § 989(b): Pub. L. 100–647 substituted in par. (3) “section 951(a)(1)(A)” for “section 951(a)” and inserted at end “For purposes of the preceding sentence, any amount included in income under section 951(a)(1)(B) shall be treated as an actual distribution made on the last day of the taxable year for which such amount was so included.” ## § 995: Taxation of DISC income to shareholders - § 995(c)(1): Pub. L. 100–647, § 1006(e)(15), struck out subpar. (C) and last sentence which read as follows: - § 995(g): Pub. L. 100–647, § 1012(bb)(6)(A), added subsec. (g). ## § 1016: Adjustments to basis - § 1016(a)(5): Pub. L. 100–647, § 1006(j)(1)(B), inserted “(or the amount applied to reduce interest payments under section 171(e)(2))” after “allowable pursuant to section 171(a)(1)”. - § 1016(a)(21), § 1016(a)(22), § 1016(a)(23), § 1016(a)(24), § 1016(a)(25), § 1016(a)(26): Pub. L. 100–647, § 1018(u)(22), added pars. (21) to (24) and struck out former pars. (23) to (26) which read as follows: ## § 1017: Discharge of indebtedness - § 1017(b)(4): Pub. L. 100–647 substituted “Special rules for” for “Ordering rule in the case of” in heading, and amended text generally. Prior to amendment, text read as follows: “Any amount which is excluded from gross income under section 108(a) by reason of the discharge of qualified farm indebtedness (within the meaning of section 108(g)(2)) and which under subsection (b) of section 108 is to be applied to reduce basis shall be applied— ## § 1041: Transfers of property between spouses or incident to divorce - § 1041(d): Pub. L. 100–647 substituted “Subsection (a)” for “Paragraph (1) of subsection (a)” and “the spouse (or former spouse)” for “the spouse”. ## § 1042: Sales of stock to employee stock ownership plans or certain cooperatives - § 1042(b)(3), § 1042(b)(4): Pub. L. 100–647, § 1018(t)(4)(F), made technical correction to Pub. L. 99–514, § 1854(a)(3)(B), see 1986 Amendment notes below. - § 1042(c)(4)(A): Pub. L. 100–647, § 1018(t)(4)(D), inserted “(as in effect immediately before the Tax Reform Act of 1986)” after “section 954(c)(3)” in last sentence. - § 1042(c)(4)(B)(i): Pub. L. 100–647, § 1018(t)(4)(E), substituted “replacement period” for “placement period”. ## § 1059: Corporate shareholder’s basis in stock reduced by nontaxed portion of extraordinary dividends - § 1059(d)(5): Pub. L. 100–647, § 1006(c)(2), inserted “amount or” after “agrees to the”. - § 1059(d)(5): Pub. L. 100–647, § 1006(c)(1), redesignated par. (6) as (5) and struck out former par. (5) which related to extension to certain property distributions. - § 1059(d)(6): Pub. L. 100–647, § 1006(c)(3), amended par. (6) generally. Prior to amendment, par. (6) read as follows: “Subsection (a) shall not apply to any extraordinary dividend with respect to any share of stock of a corporation if— - § 1059(d)(6): Pub. L. 100–647, § 1006(c)(1), redesignated par. (7) as (6). Former par. (6) redesignated (5). - § 1059(d): Pub. L. 100–647, § 1006(c)(1), redesignated par. (7) as (6). - § 1059(e)(1): Pub. L. 100–647, § 1006(c)(4), substituted “to which paragraphs (1) and (2) of subsection (a) apply without regard to the period the taxpayer held such stock” for “for purposes of this section (without regard to the holding period of the stock)”. - § 1059(e)(2): Pub. L. 100–647, § 1006(c)(5), amended par. (2) generally. Prior to amendment, par. (2) read as follows: “Except as provided in regulations, the term ‘extraordinary dividend’ shall not include any qualifying dividend (within the meaning of section 243(b)(1)).” - § 1059(e)(3)(A): Pub. L. 100–647, § 1006(c)(6), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “A qualified preferred dividend shall be treated as an extraordinary dividend— - § 1059(e)(3)(B): Pub. L. 100–647, § 1006(c)(8)(A), which directed the amendment of subpar. (B) “by striking out ‘subparagraph (A)’ and the material preceding clause (i) and inserting in lieu thereof ‘this paragraph’ ”, was executed by striking out “subparagraph (A)” in the material preceding clause (i) and inserting in lieu thereof “this paragraph”, to reflect the probable intent of Congress. - § 1059(e)(3)(B)(ii): Pub. L. 100–647, § 1006(c)(8)(B), substituted “clause (i)(II)” for “subparagraph (B)(i)(II)”. - § 1059(e)(3)(C)(i): Pub. L. 100–647, § 1006(c)(7), inserted “fixed” before “dividend payable” in introductory provisions and inserted at end “Such term shall not include any dividend payable with respect to any share of stock if the actual rate of return on such stock exceeds 15 percent.” - § 1059(f): Pub. L. 100–647, § 1006(c)(9), inserted “and in the case of stock held by pass-thru entities” after “other similar transactions”. ## § 1060: Special allocation rules for certain asset acquisitions - § 1060(b)(3): Pub. L. 100–647, § 1006(h)(1), substituted “deems” for “may find”. - § 1060(d): Pub. L. 100–647, § 1006(h)(2), added subsec. (d). - § 1060(e): Pub. L. 100–647, § 1006(h)(3)(B), added subsec. (e). ## § 1091: Loss from wash sales of stock or securities - § 1091(a): Pub. L. 100–647 inserted sentence at end defining “stock or securities”. ## § 1092: Straddles - § 1092(b)(2)(D): Pub. L. 100–647 added subpar. (D). ## § 1212: Capital loss carrybacks and carryovers - § 1212(b)(2): Pub. L. 100–647 substituted “Treatment of amounts allowed under section 1211(b)(1) or (2)” for “Special rule” as heading and amended text generally. Prior to amendment, text read as follows: “For purposes of determining the excess referred to in subparagraph (A) or (B) of paragraph (1), an amount equal to the amount allowed for the taxable year under paragraph (1) or (2) of section 1211(b) shall be treated as a short-term capital gain in such year.” ## § 1223: Holding period of property - § 1223(14): Pub. L. 100–647 amended par. (14) generally, substituting “reference” for “references” in heading, striking out “(A)” before “For special holding”, and striking out subpar. (B) which related to distributions of appreciated property to corporations. ## § 1245: Gain from dispositions of certain depreciable property - § 1245(a)(3)(F): Pub. L. 100–647 added subpar. (F). ## § 1248: Gain from certain sales or exchanges of stock in certain foreign corporations - § 1248(d)(2): Pub. L. 100–647, § 1006(e)(14)(A), struck out par. (2) which related to gain realized from sale or exchange of property in pursuance of plan of complete liquidation. - § 1248(d): Pub. L. 100–647, § 1012(p)(19), added par. (7). - § 1248(f): Pub. L. 100–647, § 1006(e)(14)(E), substituted “nonrecognition” for “section 311, 336, or 337” in heading. - § 1248(f)(1): Pub. L. 100–647, § 1006(e)(14)(C), struck out “, sale, or exchange” after “(h), a distribution” in last sentence. - § 1248(f)(1)(B): Pub. L. 100–647, § 1006(e)(14)(B), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “such domestic corporation distributes, sells, or exchanges stock of such foreign corporation in a transaction to which section 311, 336, or 337 applies,”. - § 1248(f)(3), § 1248(f): Pub. L. 100–647, § 1006(e)(14)(D), redesignated par. (4) as (3) and struck out former par. (3) which related to nonapplication of paragraph (1) in certain cases. ## § 1250: Gain from dispositions of certain depreciable realty - § 1250(d): Pub. L. 100–647 struck out par. (11) which related to section 1245 recovery property. ## § 1254: Gain from disposition of interest in oil, gas, geothermal, or other mineral properties - § 1254(a)(4): Pub. L. 100–647 added par. (4). ## § 1255: Gain from disposition of section 126 property - § 1255(b)(2): Pub. L. 100–647 amended Pub. L. 99–514, § 511(d)(2)(A), see 1986 Amendment note below. ## § 1271: Treatment of amounts received on retirement or sale or exchange of debt instruments - § 1271(a)(2)(A)(ii): Pub. L. 100–647 substituted “subsection (a)(7)” for “subsection (a)(6)”. ## § 1275: Other definitions and special rules - § 1275(a)(4): Pub. L. 100–647 substituted “subsection (a)(7)” for “subsection (a)(6)”. ## § 1276: Disposition gain representing accrued market discount treated as ordinary income - § 1276(b)(3): Pub. L. 100–647 designated paragraph relating to special rule where there are partial principal payments as par. (3) and inserted period at end. ## § 1277: Deferral of interest deduction allocable to accrued market discount - § 1277(c): Pub. L. 100–647 inserted a closing parenthesis after “section 585(a)(2)”. ## § 1278: Definitions and special rules - § 1278(a)(4)(B): Pub. L. 100–647, § 1006(u)(2), substituted “section 1272(a)(7)” for “section 1272(a)(6)”. - § 1278(b)(4): Pub. L. 100–647, § 1018(c)(3), added par. (4). - § 1278(c): Pub. L. 100–647, § 1018(c)(2), inserted before period at end “, including regulations providing proper adjustments in the case of a bond the principal of which may be paid in 2 or more payments”. ## § 1286: Tax treatment of stripped bonds - § 1286(d): Pub. L. 100–647 amended subsec. (d) generally. Prior to amendment, subsec. (d) read as follows: “In the case of any tax-exempt obligation (as defined in section 1275(a)(3)) from which 1 or more coupons have been stripped— ## § 1288: Treatment of original issue discount on tax-exempt obligations - § 1288(a): Pub. L. 100–647 substituted “paragraph (7)” for “paragraph (6)” in pars. (1) and (2). ## § 1291: Interest on tax deferral - § 1291(a)(1)(B)(ii): Pub. L. 100–647, § 1012(p)(12), amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “any period in the taxpayer’s holding period before the 1st day of the 1st taxable year of the company for which it was a passive foreign investment company (or, if later, January 1, 1987), and”. - § 1291(a)(3)(A): Pub. L. 100–647, § 1012(p)(14), substituted “for purposes of applying this section to” for “in the case of”. - § 1291(a): Pub. L. 100–647, § 1012(p)(7)(A), struck out par. (4) which related to coordination with section 904, and par. (5) which related to section 902 not applying. - § 1291(b)(2)(A): Pub. L. 100–647, § 1012(p)(13), inserted at end “For purposes of clause (ii), any excess distribution received during such 3-year period shall be taken into account only to the extent it was included in gross income under subsection (a)(1)(B).” - § 1291(b)(3)(F): Pub. L. 100–647, § 1012(p)(3), added subpar. (F). - § 1291(b)(3)(G): Pub. L. 100–647, § 1012(p)(33), added subpar. (G). - § 1291(c)(1): Pub. L. 100–647, § 1012(p)(31), inserted at end “Any increase in the tax imposed by this chapter for the current year under subsection (a) to the extent attributable to the amount referred to in subparagraph (B) shall be treated as interest paid under section 6601 on the due date for the current year.” - § 1291(d)(1): Pub. L. 100–647, § 6127(b)(1), inserted “with respect to the taxpayer” after “qualified electing fund”. - § 1291(d)(1): Pub. L. 100–647, § 1012(p)(1), amended par. (1) generally. Prior to amendment, par. (1) read as follows: “This section shall not apply with respect to— - § 1291(d)(2)(A)(i): Pub. L. 100–647, § 6127(b)(2), inserted “with respect to the taxpayer” after “qualified electing fund”. - § 1291(d)(2)(B): Pub. L. 100–647, § 1012(p)(28), added subpar. (B) and struck out former subpar. (B) which related to adjustments to basis of stock to which subpar. (A) applies. - § 1291(d)(2)(B)(i)(I): Pub. L. 100–647, § 6127(b)(2), inserted “with respect to the taxpayer” after “qualified electing fund”. - § 1291(d)(2)(C): Pub. L. 100–647, § 1012(p)(28), added subpar. (C). - § 1291(e): Pub. L. 100–647, § 1012(p)(6)(B), substituted “Except to the extent inconsistent with the regulations prescribed under subsection (f), rules similar”. - § 1291(e)(2): Pub. L. 100–647, § 1012(p)(9), struck out “not” before “a nonresident”. - § 1291(f): Pub. L. 100–647, § 1012(p)(6)(A), amended subsec. (f) generally. Prior to amendment, subsec. (f), “Nonrecognition provisions”, read as follows: “To the extent provided in regulations, gain shall be recognized on any disposition of stock in a passive foreign investment company.” - § 1291(g): Pub. L. 100–647, § 1012(p)(7)(B), added subsec. (g). ## § 1293: Current taxation of income from qualified electing funds - § 1293(b): Pub. L. 100–647, § 1012(p)(15), inserted at end “To the extent provided in regulations, if the fund establishes to the satisfaction of the Secretary that it uses a shorter period than the taxable year to determine shareholders’ interests in the earnings of such fund, pro rata shares may be determined by using such shorter period.” - § 1293(c): Pub. L. 100–647, § 1012(p)(23), inserted “, for purposes of this chapter,” after “shall be treated”, and “; except that such distribution shall immediately reduce earnings and profits” after “is not a dividend”. - § 1293(e)(3): Pub. L. 100–647, § 1012(p)(18), added par. (3). - § 1293(g): Pub. L. 100–647, § 1012(p)(32), added subsec. (g). ## § 1294: Election to extend time for payment of tax on undistributed earnings - § 1294(c)(2): Pub. L. 100–647, § 1012(p)(4), (34), substituted “Transfers” for “Dispositions” in heading and “is transferred” for “is disposed of” in subpar. (A), and in closing provisions substituted “such transfer” for “such disposition” in two places and inserted at end “To the extent provided in regulations, the preceding sentence shall not apply in the case of a transfer in a transaction with respect to which gain or loss is not recognized (in whole or in part), and the transferee in such transaction shall succeed to the treatment under this section of the transferor.” - § 1294(f): Pub. L. 100–647, § 1012(p)(25), added subsec. (f). - § 1294(g): Pub. L. 100–647, § 1012(p)(8), added subsec. (g). ## § 1295: Qualified electing fund - § 1295(a): Pub. L. 100–647, § 6127(a), amended subsec. (a) generally. Prior to amendment, subsec. (a) read as follows: “For purposes of this part, the term ‘qualified electing fund’ means any passive foreign investment company if— - § 1295(b): Pub. L. 100–647, § 6127(a), amended subsec. (b) generally. Prior to amendment, subsec. (b) read as follows: - § 1295(b): Pub. L. 100–647, § 1012(p)(37)(A), inserted sentence at end of par. (2) permitting a later election when a company reasonably believed it was not a passive foreign investment company. ## § 1297: Passive foreign investment company - § 1297(a): Pub. L. 100–647, § 1018(u)(40), inserted a comma after “subpart”. - § 1297(a): Pub. L. 100–647, § 1012(p)(27), inserted at end “A foreign corporation may elect to have the determination under paragraph (2) based on the adjusted bases of its assets in lieu of their value. Such an election, once made, may be revoked only with the consent of the Secretary.” - § 1297(b)(1): Pub. L. 100–647, § 1012(p)(5), amended par. (1) generally. Prior to amendment, par. (1) read as follows: “Except as provided in paragraph (2), the term ‘passive income’ has the meaning given such term by section 904(d)(2)(A) without regard to the exceptions contained in clause (iii) thereof.” - § 1297(b)(2): Pub. L. 100–647, § 1012(p)(26), substituted “Exceptions” for “Exception for certain banks and insurance companies” in heading, and inserted sentence at end defining “related person”. - § 1297(b)(2)(B): Pub. L. 100–647, § 1012(p)(16), inserted “is predominantly engaged in an insurance business and which” after “a corporation which”. - § 1297(b)(2)(C): Pub. L. 100–647, § 1012(p)(26)(A), added subpar. (C). - § 1297(c): Pub. L. 100–647, § 1012(p)(2), inserted “(directly or indirectly)” after “foreign corporation owns”. ## § 1298: Special rules - § 1298(a)(4): Pub. L. 100–647, § 1012(p)(10)(A), added par. (4). Former par. (4) redesignated (5). - § 1298(a)(5): Pub. L. 100–647, § 1012(p)(10), redesignated par. (4) as (5) and substituted “paragraph (2), (3), or (4)” for “paragraph (2) or (3)”. - § 1298(b)(1): Pub. L. 100–647, § 1012(p)(36), substituted “investment company which” for “investment corporation which”. - § 1298(b)(3)(A): Pub. L. 100–647, § 1012(p)(22), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “such corporation (and any predecessor) was not a passive foreign investment corporation for any prior taxable year,”. - § 1298(b)(5): Pub. L. 100–647, § 1012(p)(17), substituted “part where held” for “section where stock held” in heading, and amended text generally. Prior to amendment, text read as follows: “Under regulations, in any case in which a United States person is treated as holding stock in a passive foreign investment company by reason of subsection (a), any disposition by the United States person or the person holding such stock which results in the United States person being treated as no longer holding such stock, shall be treated as a disposition by the United States person with respect to stock in the passive foreign investment company.” - § 1298(b)(6): Pub. L. 100–647, § 1012(p)(20), substituted “Except as provided in regulations, if a” for “If a”. - § 1298(b)(8): Pub. L. 100–647, § 1012(p)(24), added par. (8). - § 1298(c), § 1298(d): Pub. L. 100–647, § 1012(p)(35), added subsec. (c) and redesignated former subsec. (c) as (d). ## § 1361: S corporation defined - § 1361(d)(3): Pub. L. 100–647 substituted “within the meaning of” for “treated as a separate trust under” in last sentence. ## § 1362: Election; revocation; termination - § 1362(d)(3): Pub. L. 100–647, § 1006(f)(6)(A), struck out cl. (v) which related to special rule for options and commodities dealers. - § 1362(d)(3): Pub. L. 100–647, § 1006(f)(6)(B), added subpar. (E). - § 1362(e)(5)(B): Pub. L. 100–647, § 1007(g)(9), substituted “Subsection (d)” for “Subsection (d)(2)”. ## § 1363: Effect of election on corporation - § 1363(d): Pub. L. 100–647, § 1006(f)(7), struck out subsec. (d) which related to distributions of appreciated property. - § 1363(d)(4)(D): Pub. L. 100–647, § 2004(n), added subpar. (D). - § 1363: Pub. L. 100–647, § 1006(f)(7), struck out subsec. (e) which provided that subsec. (d) not apply to reorganizations, etc. ## § 1366: Pass-thru of items to shareholders - § 1366(f)(2): Pub. L. 100–647 substituted “within the meaning of section 1374” for “as defined in section 1374(d)(2)”. ## § 1374: Tax imposed on certain built-in gains - § 1374(a): Pub. L. 100–647, § 1006(f)(1), inserted “net” before “recognized”. - § 1374(b)(1): Pub. L. 100–647, § 1006(f)(2), added par. (1) and struck out former par. (1) which read as follows: “The tax imposed by subsection (a) shall be a tax computed by applying the highest rate of tax specified in section 11(b) to the lesser of— - § 1374(b)(2): Pub. L. 100–647, § 1006(f)(2), added par. (2) and struck out former par. (2) which read as follows: “Notwithstanding section 1371(b)(1), any net operating loss carryforward arising in a taxable year for which the corporation was a C corporation shall be allowed as a deduction against the lesser of the amounts referred to in subparagraph (A) or (B) of paragraph (1). For purposes of determining the amount of any such loss which may be carried to subsequent taxable years, the lesser of the amounts referred to in subparagraph (A) or (B) of paragraph (1) shall be treated as taxable income.” - § 1374(b): Pub. L. 100–647, § 1006(f)(3), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “the lower of the amounts specified in subparagraphs (A) and (B) of paragraph (1) shall be treated as the taxable income.” - § 1374(c)(2): Pub. L. 100–647, § 1006(f)(4), which directed amendment of par. (2) by substituting “net recognized built-in gain” for “recognized built-in gains” wherever appearing, was executed by making the substitution in heading as well as in introductory provisions and in subpar. (B), to reflect the probable intent of Congress. - § 1374(d)(2), § 1374(d)(3), § 1374(d)(4), § 1374(d)(5), § 1374(d)(6), § 1374(d)(7), § 1374(d)(8), § 1374(d)(9): Pub. L. 100–647, § 1006(f)(5)(A), added pars. (2) to (9) and struck out former pars. (2), (3), and (4), which related to recognized built-in gain, recognition period, and taxable income, respectively. - § 1374(e): Pub. L. 100–647, § 1006(f)(5)(A), added subsec. (e). ## § 1375: Tax imposed when passive investment income of corporation having accumulated earnings and profits exceeds 25 percent of gross receipts - § 1375(b)(1)(B): Pub. L. 100–647, § 1006(f)(5)(B), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “The amount of the excess net passive income for any taxable year shall not exceed the corporation’s taxable income for the taxable year (determined in accordance with section 1374(d)(4)).” - § 1375(b)(4): Pub. L. 100–647, § 1006(f)(5)(C), added par. (4). - § 1375(c): Pub. L. 100–647, § 1006(f)(5)(D), amended subsec. (c) generally, in heading substituting “Credits not allowable” for “Special rules”, and in text substituting “No credit” for “(1) Disallowance of credit.—No credit”, and striking out par. (2) which related to coordination with section 1374. ## § 1402: Definitions - § 1402(a)(15): Pub. L. 100–647, § 3043(c)(1), added par. (15). - § 1402(g)(2), § 1402(g)(3), § 1402(g): Pub. L. 100–647, § 8007(c), struck out par. (2) which related to time for filing applications, struck out par. (4) which related to application by fiduciaries or survivors, and redesignated pars. (3) and (5) as (2) and (3), respectively. ## § 1441: Withholding of tax on nonresident aliens - § 1441(b): Pub. L. 100–647, § 1001(d)(2)(A), amended second sentence generally. Prior to amendment, second sentence read as follows: “The items of income referred to in subsection (a) from which tax shall be deducted and withheld at the rate of 14 percent are amounts which are received by a nonresident alien individual who is temporarily present in the United States as a nonimmigrant under subparagraph (F) or (J) of section 101(a)(15) of the Immigration and Nationality Act and which are incident to a qualified scholarship to which section 117(a) applies, but only to the extent such amounts are includible in gross income.” - § 1441(c)(11): Pub. L. 100–647, § 6134(a)(2), added par. (11). ## § 1442: Withholding of tax on foreign corporations - § 1442(a): Pub. L. 100–647 struck out “and” after “to section 881(a)(3),” and inserted before period at end “, and the reference in section 1441(c)(10) to section 871(i)(2) shall be treated as referring to section 881(d)”. ## § 1444: Withholding on Virgin Islands source income - § 1444: Pub. L. 100–647 struck out “(as modified by section 934A)” before “shall not exceed”. ## § 1445: Withholding of tax on dispositions of United States real property interests - § 1445(e)(1): Pub. L. 100–647 inserted “(or, to the extent provided in regulations, 28 percent)” after “to 34 percent”. ## § 1446: Withholding of tax on foreign partners’ share of effectively connected income - § 1446: Pub. L. 100–647 amended section generally, substituting provisions relating to withholding tax on foreign partners’ share of effectively connected income for provisions which related to withholding tax on amounts paid by partnerships to foreign partners. ## § 1503: Computation and payment of tax - § 1503(d)(3), § 1503(d)(4): Pub. L. 100–647, § 1012(u), added pars. (3) and (4). - § 1503(e)(1): Pub. L. 100–647, § 2004(j)(1)(A), amended introductory provisions generally. Prior to amendment, introductory provisions read as follows: “Solely for purposes of determining gain or loss on the disposition of intragroup stock, in determining the adjustments to the basis of such intragroup stock on account of the earnings and profits of any member of an affiliated group for any consolidated year—”. - § 1503(e)(2)(C): Pub. L. 100–647, § 2004(j)(3)(A), added subpar. (C). - § 1503(e)(3): Pub. L. 100–647, § 2004(j)(2), added par. (3). ## § 1504: Definitions - § 1504(b): Pub. L. 100–647, § 1018(d)(10)(A), amended par. (7) generally, striking out “, or any other corporation which has accumulated DISC income which is derived after December 31, 1984” after “in section 992(a)(1))”. - § 1504(f): Pub. L. 100–647, § 1018(d)(10)(B), added subsec. (f). ## § 1561: Limitation on accumulated earnings credit in the case of certain controlled corporations - § 1561(a): Pub. L. 100–647 substituted “section 11(b)(1)” for “section 11(b)” in par. (1) and in penultimate sentence. ## § 1563: Definitions and special rules - § 1563(d)(1)(B): Pub. L. 100–647 substituted “paragraphs (1), (2), and (3) of subsection (e)” for “subsection (e)(1)”. ## § 2013: Credit for tax on prior transfers - § 2013: Pub. L. 100–647 added subsec. (g). ## § 2032A: Valuation of certain farm, etc., real property - § 2032A(b)(5)(A): Pub. L. 100–647 inserted at end “For purposes of subsection (c), such surviving spouse shall not be treated as failing to use such property in a qualified use solely because such spouse rents such property to a member of such spouse’s family on a net cash basis.” ## § 2036: Transfers with retained life estate - § 2036(c): Pub. L. 100–647, § 3031(e), substituted “an interest” for “a disproportionately large share” after “whole retaining”. - § 2036(c): Pub. L. 100–647, § 3031(g)(1), substituted “consideration furnished by” for “sales to” in heading, and amended text generally. Prior to amendment, text read as follows: “The exception contained in subsection (a) for a bona fide sale shall not apply to a transfer described in paragraph (1) if such transfer is to a member of the transferor’s family.” - § 2036(c): Pub. L. 100–647, § 3031(d), substituted “Except as provided in regulations, an” for “An”. - § 2036(c): Pub. L. 100–647, § 3031(a)(1), amended par. (4) generally, substituting provisions relating to treatment of certain transfers for provisions relating to coordination with section 2035. - § 2036(c): Pub. L. 100–647, § 3031(g)(2), amended par. (5) generally, substituting provisions relating to the making of appropriate adjustments in amounts included in gross estate for provisions relating to coordination with section 2043. - § 2036(c): Pub. L. 100–647, § 3031(b), added par. (6). - § 2036(c): Pub. L. 100–647, § 3031(b)[(c)], added pars. (7) and (8). ## § 2053: Expenses, indebtedness, and taxes - § 2053(c)(1)(B): Pub. L. 100–647, inserted at end “This subparagraph shall not apply to any increase in the tax imposed by this chapter by reason of section 4980A(d).” ## § 2056: Bequests, etc., to surviving spouse - § 2056(b)(7)(C): Pub. L. 100–647, § 6152(a), added subpar. (C). - § 2056(d): Pub. L. 100–647, § 5033(a)(1), added subsec. (d). ## § 2056A: Qualified domestic trust - Enacted 26 U.S.C. § 2056A. ## § 2101: Tax imposed - § 2101(b): Pub. L. 100–647, § 5032(a), substituted “a tentative tax computed under section 2001(c)” for “a tentative tax computed in accordance with the rate schedule set forth in subsection (d)” in pars. (1) and (2). - § 2101: Pub. L. 100–647, § 5032(c), struck out subsec. (d) which provided a rate schedule. ## § 2102: Credits against tax - § 2102: Pub. L. 100–647, § 5032(b)(1)(A), substituted “$13,000” for “$3,600”. - § 2102: Pub. L. 100–647, § 5032(b)(1), substituted “$13,000” for “$3,600” in subpar. (A) and “$46,800” for “$15,075” in subpar. (B). - § 2102: Pub. L. 100–647, § 5032(b)(2), amended par. (3) generally, substituting provision relating to special rules for coordination with treaties and with gift tax unified tax credit for provision relating to a phase-in of the par. (2)(B) amount for decedents dying during 1977, 1978, 1979, and 1980. ## § 2104: Property within the United States - § 2104(c): Pub. L. 100–647 substituted “subparagraph (A), (C), or (D) of section 861(a)(1)” for “section 861(a)(1)(B), section 861(a)(1)(G), or section 861(a)(1)(H)”. ## § 2105: Property without the United States - § 2105(b)(1): Pub. L. 100–647 substituted “section 871(i)(3), if any interest thereon would not be subject to tax by reason of section 871(i)(1)” for “section 861(c), if any interest thereon would be treated by reason of section 861(a)(1)(A) as income from sources without the United States”. ## § 2106: Taxable estate - § 2106(a)(3): Pub. L. 100–647 added par. (3). ## § 2207B: Right of recovery where decedent retained interest - Enacted 26 U.S.C. § 2207B. ## § 2501: Imposition of tax - § 2501(d): Pub. L. 100–647 added par. (3). ## § 2503: Taxable gifts - § 2503(e)(2)(B): Pub. L. 100–647, § 1018(u)(52), substituted “section 213(d)” for “section 213(e)”. - § 2503(f): Pub. L. 100–647, § 1018(s)(2)(A), added subsec. (f) relating to treatment of certain loans of artworks. ## § 2523: Gift to spouse - § 2523(f)(6): Pub. L. 100–647, § 6152(b), added par. (6). - § 2523(i): Pub. L. 100–647, § 5033(b), added subsec. (i). ## § 2611: Generation-skipping transfer defined - § 2611(a): Pub. L. 100–647, §§ 1014(g)(1), 1018(u)(43), substituted “generation-skipping transfer” for “generation-skipping transfers” and “means” for “mean”. - § 2611(b): Pub. L. 100–647, § 1014(g)(2), redesignated pars. (2) and (3) as (1) and (2), respectively, and struck out former par. (1) which read as follows: “any transfer (other than a direct skip) from a trust, to the extent such transfer is subject to a tax imposed by chapter 11 or 12 with respect to a person in the 1st generation below that of the grantor, and”. ## § 2612: Taxable termination; taxable distribution; direct skip - § 2612(a)(2): Pub. L. 100–647, § 1014(g)(15), amended par. (2) generally. Prior to amendment, par. (2) read as follows: “If, upon the termination of an interest in property held in a trust, a specified portion of the trust assets are distributed to skip persons who are lineal descendants of the holder of such interest (or to 1 or more trusts for the exclusive benefit of such persons), such termination shall constitute a taxable termination with respect to such portion of the trust property.” - § 2612(c)(2): Pub. L. 100–647, § 1014(g)(7), in closing provisions, inserted at end “If any transfer of property to a trust would be a direct skip but for this paragraph, any generation assignment under this paragraph shall apply also for purposes of applying this chapter to transfers from the portion of the trust attributable to such property.” - § 2612(c): Pub. L. 100–647, § 1014(g)(5)(B), added par. (3). ## § 2613: Skip person and non-skip person defined - § 2613(a)(1): Pub. L. 100–647 inserted “natural” before “person”. ## § 2632: Special rules for allocation of GST exemption - § 2632(b)(2): Pub. L. 100–647 substituted “paragraph (1) with respect to a prior direct skip)” for “paragraph (1)) with respect to a prior direct skip”. ## § 2642: Inclusion ratio - § 2642(a)(2): Pub. L. 100–647, § 1014(g)(4)(B), struck out at end “Except as provided in paragraphs (3) and (4) of subsection (b), the value determined under subparagraph (B)(i) shall be of the property as of the time of the transfer to the trust (or the direct skip).” - § 2642(b): Pub. L. 100–647, § 1014(g)(4)(D), inserted “Except as provided in subsection (f)—” as introductory provision. - § 2642(b)(2)(A): Pub. L. 100–647, § 1014(g)(4)(C), inserted before period at end “; except that, if the requirements prescribed by the Secretary respecting allocation of post-death changes in value are not met, the value of such property shall be determined as of the time of the distribution concerned.” - § 2642(b)(2)(B): Pub. L. 100–647, § 1014(g)(4)(E), substituted “to property transferred at death” for “at or after death” in heading and “to property transferred as a result of the death of the transferor” for “at or after the death of the transferor” in text. - § 2642(b)(3): Pub. L. 100–647, § 1014(g)(4)(F)(ii), as amended by Pub. L. 101–508, § 11704(a)(36), substituted “Allocations to inter vivos transfers” for “Inter vivos allocations” in heading. - § 2642(b)(3): Pub. L. 100–647, § 1014(g)(4)(F)(i), substituted “to any property not transferred as a result of the death of the transferor is” for “to any property is made during the life of the transferor but is”. - § 2642(c): Pub. L. 100–647, § 1014(g)(17)(A), inserted “direct skips which are” in heading and amended text generally. Prior to amendment, text read as follows: - § 2642(d)(1): Pub. L. 100–647, § 1014(g)(17)(B), struck out “(other than a nontaxable gift)” after “transfer of property”. - § 2642(d)(2)(B)(i): Pub. L. 100–647, § 1014(g)(18), amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “the value of the property involved in such transfer, reduced by any charitable deduction allowed under section 2055 or 2522 with respect to such property, and”. - § 2642(e): Pub. L. 100–647, § 1014(g)(3)(A), added subsec. (e). - § 2642(f): Pub. L. 100–647, § 1014(g)(4)(A), added subsec. (f). ## § 2651: Generation assignment - § 2651(b)(2): Pub. L. 100–647, § 1014(g)(19), inserted “(or former spouse)” after “a spouse”. - § 2651(e): Pub. L. 100–647, § 1014(g)(11), amended par. (3) generally, including governmental entities among the organizations to be assigned to transferor’s generation. ## § 2652: Other definitions - § 2652(a)(1): Pub. L. 100–647, § 1014(g)(9), substituted “any property” for “a transfer of a kind” in subpars. (A) and (B) and inserted at end “An individual shall be treated as transferring any property with respect to which such individual is the transferor.” - § 2652(a)(3): Pub. L. 100–647, § 1014(g)(14), substituted “any trust” for “any property” in subpars. (A) and (B) and “may elect to treat all of the property in such trust” for “may elect to treat such property” in closing provisions. - § 2652(c)(2): Pub. L. 100–647, § 1014(g)(8), struck out “nominal” before “interests” in heading and substituted “any tax” for “the tax” in text. - § 2652(c)(3): Pub. L. 100–647, § 1014(g)(6), added par. (3). - § 2652(d): Pub. L. 100–647, § 1014(g)(20), added subsec. (d). ## § 2654: Special rules - § 2654(a)(2): Pub. L. 100–647, § 1014(g)(12), inserted “or decrease” after “any increase” and “or decrease (as the case may be)” after “such increase”. - § 2654(b): Pub. L. 100–647, § 1014(g)(13), substituted “Certain trusts” for “Separate shares” in heading and amended text generally. Prior to amendment, text read as follows: “Substantially separate and independent shares of different beneficiaries in a trust shall be treated as separate trusts.” ## § 2663: Regulations - § 2663(3): Pub. L. 100–647 added par. (3). ## § 3111: Rate of tax - § 3111(a), § 3111(b): Pub. L. 100–647 made technical correction to directory language of Pub. L. 100–203, § 9006(b)(1), see 1987 Amendment note below. ## § 3121: Definitions - § 3121(a)(5)(G): Pub. L. 100–647, § 1011B(a)(23)(A), inserted “if such payment would not be treated as wages without regard to such plan and it is reasonable to believe that (if section 125 applied for purposes of this section) section 125 would not treat any wages as constructively received” after “section 125)”. - § 3121(a)(8)(B): Pub. L. 100–647, § 8017(b), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “cash remuneration paid by an employer in any calendar year to an employee for agricultural labor unless (i) the cash remuneration paid in such year by the employer to the employee for such labor is $150 or more, or (ii) the employer’s expenditures for agricultural labor in such year equal or exceed $2,500;”. - § 3121(a)(11): Pub. L. 100–647, § 1001(g)(4)(B)(i), inserted “(determined without regard to section 274(n))” after “section 217”. - § 3121(a)(21): Pub. L. 100–647, § 3043(c)(2), added par. (21). - § 3121(b)(5): Pub. L. 100–647, § 8015(c)(2), inserted “any such service performed on or after any date on which such individual performs” after “with respect to” in provision preceding subpar. (C). - § 3121(b)(5)(H): Pub. L. 100–647, § 8015(b)(2), amended subpar. (H) generally. Prior to amendment, subparagraph (H) read as follows: “service performed by an individual on or after the effective date of an election by such individual under section 301(a) of the Federal Employees’ Retirement System Act of 1986, or under regulations issued under section 860 of the Foreign Service Act of 1980 or section 307 of the Central Intelligence Agency Retirement Act of 1964 for Certain Employees, to become subject to chapter 84 of title 5, United States Code;”. - § 3121(b)(19): Pub. L. 100–647, § 1001(d)(2)(C)(i), substituted “(F), (J), or (M)” for “(F) or (J)” in two places. - § 3121(b)(20): Pub. L. 100–647, § 8016(a)(4)(A), (C), made technical correction to directory language of Pub. L. 99–272, § 13303(c)(2), see 1986 Amendment note below. - § 3121(d)(3), § 3121(d)(4): Pub. L. 100–647, § 8016(a)(3)(A), redesignated par. (4) as (3) and substituted “; or” for a period at the end, and redesignated par. (3) as (4), substituted a period for “; or” at the end, and moved redesignated par. (4) to the end of the subsection. - § 3121(u)(2)(B)(ii)(VI): Pub. L. 100–647, § 1018(r)(2)(A), added subcl. (VI). - § 3121(v)(3)(A): Pub. L. 100–647, § 1011(e)(8), substituted “457(f)(1)” for “457(e)(1)”. - § 3121(v)(3)(C): Pub. L. 100–647, § 1018(u)(35), substituted “Savings” for “Saving”. - § 3121(x): Pub. L. 100–647, § 1011B(a)(22)(A), added subsec. (x) relating to benefits provided under certain employee benefit plans. ## § 3122: Federal service - § 3122: Pub. L. 100–647 struck out from first sentence “the determination whether an individual has performed service which constitutes employment as defined in section 3121(b),” after “section 3121(p) are applicable,” and “which constitutes wages as defined in section 3121(a)” after “remuneration for such service”, and inserted after first sentence “Nothing in this paragraph shall be construed to affect the Secretary’s authority to determine under subsections (a) and (b) of section 3121 whether any such service constitutes employment, the periods of such employment, and whether remuneration paid for any such service constitutes wages.” ## § 3127: Exemption for employers and their employees where both are members of religious faiths opposed to participation in Social Security Act programs - Enacted 26 U.S.C. § 3127. ## § 3128: Short title ## § 3231: Definitions - § 3231(e)(1): Pub. L. 100–647, § 1001(d)(2)(C)(ii), substituted “(F), (J), or (M)” for “(F) or (J)” in two places. - § 3231(e)(8): Pub. L. 100–647, § 1011B(a)(22)(B), added par. (8). ## § 3306: Definitions - § 3306(b)(5)(G): Pub. L. 100–647, § 1011B(a)(23)(A), inserted “if such payment would not be treated as wages without regard to such plan and it is reasonable to believe that (if section 125 applied for purposes of this section) section 125 would not treat any wages as constructively received” after “section 125)”. - § 3306(b)(9): Pub. L. 100–647, § 1001(g)(4)(B)(ii), inserted “(determined without regard to section 274(n))” after “section 217”. - § 3306(c)(1)(B): Pub. L. 100–647, § 1018(u)(50), amended Pub. L. 99–272, § 13303(a), see 1986 Amendment notes below. - § 3306(c)(19): Pub. L. 100–647, § 1001(d)(2)(C)(iii), substituted “(F), (J), or (M)” for “(F) or (J)” in three places. - § 3306(i): Pub. L. 100–647, § 8016(a)(3)(B), substituted “paragraph (4) and subparagraphs (B) and (C) of paragraph (3)” for “paragraph (3) and subparagraphs (B) and (C) of paragraph (4)”. - § 3306(t): Pub. L. 100–647, § 1011B(a)(22)(C), added subsec. (t) relating to benefits provided under certain employee benefit plans. ## § 3321: Imposition of tax - § 3321: Pub. L. 100–647, § 7106(a), amended section generally, revising and restating provisions of subsecs. (a) and (b) and specifying imposition of 4 percent tax on rail wages rather than a tax based on the “applicable percentage” of rail wages, and in subsec. (c) substituting provisions relating to termination if loans to railroad unemployment fund repaid for provisions relating to rates of tax. - § 3321: Pub. L. 100–647, § 1018(u)(17), added a period at end of par. (4). ## § 3322: Definitions - § 3322: Pub. L. 100–647 amended section generally, substituting present provisions for former provisions relating to taxable period, which had provided, in subsec. (a), for a general rule and, in subsec. (b), for earlier termination if loans to rail unemployment fund repaid. ## § 3401: Definitions - § 3401(a)(12)(C): Pub. L. 100–647, § 1011(f)(9), substituted “section 402(h)(1) and (2)” for “section 219” and “an exclusion” for “a deduction”. - § 3401(a)(15): Pub. L. 100–647, § 1001(g)(4)(B)(iii), inserted “(determined without regard to section 274(n))” after “section 217”. - § 3401(a)(19), § 3401(a)(20): Pub. L. 100–647, § 1011B(a)(33), redesignated par. (20) as (19) and struck out former par. (19) which excluded medical care reimbursement made to or for benefit of employee under self-insured medical reimbursement plan. - § 3401(g): Pub. L. 100–647, § 1011B(a)(22)(D), added subsec. (g) relating to benefits provided under certain employee benefit plans. ## § 3402: Income tax collected at source - § 3402(m)(1): Pub. L. 100–647 substituted “section 62(a) (other than paragraph (10) thereof))” for “section 62) (other than paragraph (13) thereof)”. ## § 3405: Special rules for pensions, annuities, and certain other deferred income - § 3405(d): Pub. L. 100–647, § 1012(bb)(2)(C), substituted “United States or its possessions” for “United States” in heading. - § 3405(d): Pub. L. 100–647, § 1012(bb)(2)(A), substituted “the United States and any possession of the United States” for “the United States”. - § 3405(d): Pub. L. 100–647, § 1012(bb)(2)(B), amended cl. (i) generally, substituting “or a resident alien of the United States” for “who is a bona fide resident of a foreign country”. ## § 3406: Backup withholding - § 3406(h)(5)(D): Pub. L. 100–647 inserted period at end of subpar. (D). ## § 3509: Determination of employer’s liability for certain employment taxes - § 3509(d)(3): Pub. L. 100–647 substituted “subsection (d)(4)” for “subsection (d)(3)”. ## § 4041: Imposition of tax - § 4041(b)(1)(A): Pub. L. 100–647, § 2001(d)(3)(A), inserted reference to subsection (d)(1). - § 4041(b)(1)(B): Pub. L. 100–647, § 2001(d)(3)(B), inserted “and by the corresponding provision of subsection (d)(1)” before the period. - § 4041(b)(1)(C): Pub. L. 100–647, § 1017(c)(3), substituted “section 6421(e)(2)” for “section 6421(d)(2)”. - § 4041(b)(2)(A): Pub. L. 100–647, § 2001(d)(3)(D), amended subpar. (A) generally, inserting “(i)” before “subsection (a)(2)” and adding cl. (ii). - § 4041(b): Pub. L. 100–647, § 2001(d)(3)(C), struck out par. (3) which coordinated subsec. (b) with taxes imposed by subsec. (d). - § 4041(c)(3): Pub. L. 100–647, § 2001(d)(2), substituted “the Highway Trust Fund financing rate at which” for “the rate at which”. - § 4041(f): Pub. L. 100–647, § 1017(c)(4), amended par. (3) generally, substituting “paragraph (1) shall not apply on and after October 1, 1993” for “on and after October 1, 1993, paragraph (1) shall not apply”. ## § 4042: Tax on fuel used in commercial transportation on inland waterways - § 4042(b)(2): Pub. L. 100–647 amended par. (2) generally. Prior to amendment, par. (2) read as follows: “For purposes of paragraph (1)— ## § 4052: Definitions and special rules - § 4052(a)(1): Pub. L. 100–647 substituted “production, manufacture” for “manufacture, production”. ## § 4081: Imposition of tax - § 4081(a): Pub. L. 100–647, § 1017(c)(1)(A), added pars. (1) and (2), struck out former par. (1) which imposed a tax at the rate specified in subsec. (d) on the earlier of the removal, or the sale of gasoline by the refiner or importer thereof or the terminal operator, and redesignated former par. (2) as (3). - § 4081(b)(1): Pub. L. 100–647, § 1017(c)(1)(B), substituted “subsection (a)” for “subsection (d)”. - § 4081(c): Pub. L. 100–647, § 6104(a), inserted after first sentence “Subject to such terms and conditions as the Secretary may prescribe (including the application of section 4101), the treatment under the preceding sentence also shall apply to use in producing gasohol after the time of such removal or sale.” - § 4081(c): Pub. L. 100–647, § 2001(d)(5)(A), inserted “and by substituting ‘⅑ cent’ for ‘0.1 cent’ ” before “in the case of the removal”. - § 4081(c): Pub. L. 100–647, § 1017(c)(14), substituted “3⅓ cents” for “3 cents”. - § 4081(c): Pub. L. 100–647, § 1017(c)(1)(B), substituted “subsection (a)” for “subsection (d)”. - § 4081(c): Pub. L. 100–647, § 2001(d)(5)(B), substituted “reduced by the amount of tax imposed (and not credited or refunded) on any prior removal or sale of such fuel” for “5⅔ cents a gallon”. - § 4081(d): Pub. L. 100–647, § 1017(c)(1)(D), redesignated subsec. (e) as (d) and struck out former subsec. (d) which related to the rate of tax. - § 4081(d)(1): Pub. L. 100–647, § 1017(c)(1)(C)(i), substituted “subsection (a)(2)” for “subsection (d)(2)(A)”. - § 4081(d)(2)(A): Pub. L. 100–647, § 1017(c)(1)(C)(ii), substituted “subsection (a)(2)” for “subsection (d)(2)(B)”. - § 4081(e): Pub. L. 100–647, § 1017(c)(1)(D), redesignated subsec. (e) as (d). ## § 4132: Definitions and special rules - § 4132(c): Pub. L. 100–647 added pars. (1) and (2) and redesignated former pars. (1) and (2) as (3) and (4), respectively. ## § 4222: Registration - § 4222(d): Pub. L. 100–647 substituted “4101” for “4083”. ## § 4293: Exemption for United States and possessions - § 4293: Pub. L. 100–647 inserted reference to section 4051 of this title. ## § 4373: Exemptions - § 4373(1): Pub. L. 100–647 amended par. (1) generally, substituting provisions relating to effectively connected items for provisions relating to domestic agent. ## § 4462: Definitions and special rules - § 4462(b)(1)(B): Pub. L. 100–647, § 2002(b), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “cargo loaded on a vessel in Alaska, Hawaii, or any possession of the United States for transportation to the United States mainland for ultimate use or consumption in the United States mainland,”. - § 4462(g)(3): Pub. L. 100–647, § 6110(a), added par. (3). - § 4462(h), § 4462(i): Pub. L. 100–647, § 6109(a), added subsec. (h) and redesignated former subsec. (h) as (i). ## § 4611: Imposition of tax - § 4611(f)(2): Pub. L. 100–647 substituted “December 31, 1990” for “September 1, 1987”. ## § 4662: Definitions and special rules - § 4662(b)(10)(A): Pub. L. 100–647, § 2001(a)(2), substituted “one or more” for “a mixture of”. - § 4662(e)(3), § 4662(e)(4): Pub. L. 100–647, § 2001(a)(1), added par. (3) and redesignated former par. (3) as (4). ## § 4672: Definitions and special rules - § 4672(a)(2): Pub. L. 100–647, § 2001(b)(2), inserted at end “If an importer or exporter of any substance requests that the Secretary determine whether such substance be listed as a taxable substance under paragraph (1) or be removed from such listing, the Secretary shall make such determination within 180 days after the date the request was filed.” - § 4672(a)(2)(B): Pub. L. 100–647, § 2001(b)(1), inserted “(or more than 50 percent of the value)” after “weight”. - § 4672(a)(4): Pub. L. 100–647, § 2001(b)(3), amended par. (4) generally. Prior to amendment, par. (4) read as follows: ## § 4941: Taxes on self-dealing - § 4941(d)(2)(G)(ii): Pub. L. 100–647 amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “scholarships and fellowship grants which are subject to the provisions of section 117(a) and are to be used for study at an educational organization described in section 170(b)(1)(A)(ii),”. ## § 4945: Taxes on taxable expenditures - § 4945(g)(1): Pub. L. 100–647 amended par. (1) generally. Prior to amendment, par. (1) read as follows: “the grant constitutes a scholarship or fellowship grant which is subject to the provisions of section 117(a) and is to be used for study at an educational organization described in section 170(b)(1)(A)(ii),”. ## § 4972: Tax on nondeductible contributions to qualified employer plans - § 4972(c): Pub. L. 100–647, § 1011A(e)(1), amended subsec. (c) generally, revising and restating as pars. (1) to (4) provisions of former pars. (1) and (2). - § 4972(c)(4), § 4972(c)(5): Pub. L. 100–647, § 2005(a)(1), added par. (4) and redesignated former par. (4) as (5). - § 4972(d)(1): Pub. L. 100–647, § 1011A(e)(2), amended par. (1) generally. Prior to amendment, par. (1) read as follows: “The term ‘qualified employer plan’ means— ## § 4973: Tax on excess contributions to certain tax-favored accounts and annuities - § 4973(b): Pub. L. 100–647 substituted “shall be computed without regard to section 219(g)” for “(after application of section 408(o)(2)(B)(ii)) shall be increased by the nondeductible limit under section 408(o)(2)(B)” in last sentence. ## § 4976: Taxes with respect to funded welfare benefit plans - § 4976(b): Pub. L. 100–647, § 1011B(a)(27)(B), added par. (5) relating to limitation in case of benefits to which section 89 applies. - § 4976(c): Pub. L. 100–647, § 1011B(a)(27)(A), added subsec. (c) relating to tax on funded welfare benefit funds which include discriminatory employee benefit plan. Former subsec. (c) redesignated (d). - § 4976(c): Pub. L. 100–647, § 3021(a)(1)(C)(i), substituted “any testing year (as defined in section 89(j)(13))” for “any plan year”, see Codification note above. - § 4976(c): Pub. L. 100–647, § 3021(a)(1)(C)(ii), substituted “testing” for “plan” in cls. (i) and (ii), see Codification note above. - § 4976: Pub. L. 100–647, § 1011B(a)(27)(A), redesignated former subsec. (c) as (d). ## § 4978: Tax on certain dispositions by employee stock ownership plans and certain cooperatives - § 4978(d)(4): Pub. L. 100–647 added par. (4). ## § 4979: Tax on certain excess contributions - § 4979(a)(1): Pub. L. 100–647, § 1011(l)(8), struck out “a cash or deferred arrangement which is part of” after “contributions under”. - § 4979(c): Pub. L. 100–647, § 1011(l)(9), struck out “403(b),” and substituted “408(k)(6)(C)” for “408(k)(8)(B)”. - § 4979(d): Pub. L. 100–647, § 1011(l)(10), inserted sentence at end relating to determination of excess aggregate contributions under certain annuity contracts. - § 4979(f)(2): Pub. L. 100–647, § 1011(l)(11), substituted “Year of inclusion” for “Included in prior year” as heading, and amended text generally. Prior to amendment, text read as follows: “Any amount distributed as provided in paragraph (1) shall be treated as received and earned by the recipient in his taxable year for which such contribution was made.” ## § 4980: Tax on reversion of qualified plan assets to employer - § 4980(a): Pub. L. 100–647, § 6069(a), substituted “15” for “10”. - § 4980(c)(1)(A): Pub. L. 100–647, § 1011A(f)(1), substituted “subtitle A” for “this subtitle”. - § 4980(c)(3)(A): Pub. L. 100–647, § 1011A(f)(2), inserted “or a tax credit employee stock ownership plan (as described in section 409)” after “section 4975(e)(7)” in introductory text, and “, except to the extent necessary to meet the requirements of section 401(a)(28),” after “must” in cl. (ii). - § 4980(c)(3)(C): Pub. L. 100–647, § 1011A(f)(3), struck out “(by reason of the limitations of section 415)” after “not allocated” in introductory text, and inserted sentence at end relating to minimum amount allocated in year of transfer. - § 4980(c)(3)(C): Pub. L. 100–647, § 1011A(f)(7), inserted sentence at end relating to dividends on securities held in suspense account. - § 4980(c)(3)(F), § 4980(c)(3)(G): Pub. L. 100–647, § 1011A(f)(6), added subpars. (F) and (G). - § 4980(c)(4): Pub. L. 100–647, § 5072(a), added par. (4). ## § 4980B: Failure to satisfy continuation coverage requirements of group health plans - Enacted 26 U.S.C. § 4980B. ## § 4981: Excise tax on undistributed income of real estate investment trusts - § 4981(c)(1)(A): Pub. L. 100–647, § 1006(s)(3), inserted “(but computed without regard to that portion of such deduction which is attributable to the amount excluded under section 857(b)(2)(D)” after “such calendar year”. - § 4981(e)(2): Pub. L. 100–647, § 1006(s)(1), amended par. (2) generally, designating existing provisions as subpar. (A) and adding subpars. (B) and (C). ## § 4982: Excise tax on undistributed income of regulated investment companies - § 4982(e)(2): Pub. L. 100–647, § 1006(l)(2), amended par. (2) generally. Prior to amendment, par. (2) read as follows: “The term ‘capital gain net income’ has the meaning given to such term by section 1222(9) (determined by treating the 1-year period ending on October 31 of any calendar year as the company’s taxable year).” - § 4982(e)(5): Pub. L. 100–647, § 1006(l)(5), added par. (5). - § 4982(f): Pub. L. 100–647, § 1006(l)(6), added subsec. (f). ## § 5010: Credit for wine content and for flavors content - § 5010(c)(2)(B): Pub. L. 100–647 added cl. (ii) and redesignated former cl. (ii) as (iii). ## § 5041: Imposition and rate of tax - § 5041(d), § 5041(e): Pub. L. 100–647 added subsec. (d) and redesignated former subsec. (d) as (e). ## § 5054: Determination and collection of tax on beer - § 5054(a)(2): Pub. L. 100–647 added period at end. ## § 5061: Method of collecting tax - § 5061(d)(2)(A), § 5061(d)(2)(B), § 5061(d)(3): Pub. L. 100–647 substituted “last day of the semimonthly period during” for “date on”. ## § 5701: Rate of tax - § 5701(f), § 5701(g): Pub. L. 100–647 added subsec. (f) and redesignated former subsec. (f) as (g). ## § 5702: Definitions - § 5702(c): Pub. L. 100–647, § 5061(c)(1), inserted reference to pipe tobacco. - § 5702(d): Pub. L. 100–647, § 5061(c)(2), inserted reference to pipe tobacco in introductory provisions and in par. (1). - § 5702(o): Pub. L. 100–647, § 5061(b), added subsec. (o). ## § 5703: Liability for tax and method of payment - § 5703(b)(2)(B)(i), § 5703(b)(2)(B)(ii): Pub. L. 100–647 substituted “the 14th day after the last day of the semimonthly period during which” for “the 14th day after the date on which”. ## § 5881: Greenmail - § 5881(a): Pub. L. 100–647, § 2004(o)(1)(A), substituted “gain or other income of such person by reason of such receipt” for “gain realized by such person on such receipt”. - § 5881(b): Pub. L. 100–647, § 2004(o)(1)(B)(i), substituted “a corporation (or any person acting in concert with such corporation) to directly or indirectly acquire stock of such corporation” for “a corporation to directly or indirectly acquire its stock”. - § 5881(d): Pub. L. 100–647, § 2004(o)(1)(C), substituted “amount” for “gain” in heading and inserted “or other income” after “the gain” in text. - § 5881(e): Pub. L. 100–647, § 2004(o)(2), added subsec. (e). ## § 6011: General requirement of return, statement, or list - § 6011(a): Pub. L. 100–647 substituted “or with respect to the collection thereof” for “or for the collection thereof”. ## § 6012: Persons required to make returns of income - § 6012(a)(1)(C)(i): Pub. L. 100–647 amended subcl. (I) generally, substituting “the sum of the amount in effect under section 63(c)(5)(A) plus the additional standard deduction (if any) to which the individual is entitled” for “the amount in effect under section 63(c)(5)(A) (relating to limitation on standard deduction in the case of certain dependents)”. ## § 6013: Joint returns of income tax by husband and wife - § 6013(b)(5)(A): Pub. L. 100–647 amended subpar. (A) generally. Prior to amendment, subpar. (A) related to additions to tax when amount shown as tax by husband and wife on joint return exceeds aggregate of amounts shown as tax on separate return of each spouse. ## § 6018: Estate tax returns - § 6018(a): Pub. L. 100–647 added par. (5). ## § 6031: Return of partnership income - § 6031(d): Pub. L. 100–647 added subsec. (d). ## § 6039D: Returns and records with respect to certain fringe benefit plans - § 6039D(c): Pub. L. 100–647, § 1011B(a)(24), amended directory language of Pub. L. 99–514, § 1151(h)(3), see 1986 Amendment note below. - § 6039D(d): Pub. L. 100–647, § 3021(a)(15)(A)(ii), inserted “and special rules” after “Definitions” in heading. - § 6039D(d)(3): Pub. L. 100–647, § 3021(a)(15)(A)(i), added par. (3). ## § 6039E: Information concerning resident status - § 6039E(d): Pub. L. 100–647 inserted sentence at end relating to disclosure of information subject to section 245A of the Immigration and Nationality Act. ## § 6045: Returns of brokers - § 6045(c)(1): Pub. L. 100–647, § 1015(e)(1)(A), inserted at end “A person shall not be treated as a broker with respect to activities consisting of managing a farm on behalf of another person.” - § 6045(e)(1): Pub. L. 100–647, § 1015(e)(3)(A), substituted “real estate reporting person” for “real estate broker”. - § 6045(e)(2): Pub. L. 100–647, § 1015(e)(3), substituted “estate reporting person” for “estate broker” in par. (2) heading and two places in text. - § 6045(e)(3): Pub. L. 100–647, § 4005(g)(3), added par. (3) relating to whether seller’s financing was federally-subsidized indebtedness. - § 6045(e)(3): Pub. L. 100–647, § 1015(e)(2)(A), added par. (3) relating to prohibition of separate charge for filing return. ## § 6046: Returns as to organization or reorganization of foreign corporations and as to acquisitions of their stock - § 6046(a): Pub. L. 100–647, § 1012(i)(19)(C), inserted sentence at end relating to foreign corporation with respect to which any person is treated as a United States shareholder under section 953(c). - § 6046(a): Pub. L. 100–647, § 1012(i)(19)(A), added par. (3) and redesignated former par. (3) as (4). - § 6046(b): Pub. L. 100–647, § 1012(i)(19)(B), substituted “paragraph (2) or (3) of subsection (a)” for “subsection (a)(2)”. ## § 6049: Returns regarding payments of interest - § 6049(d)(7)(A): Pub. L. 100–647, § 1006(v), inserted parenthetical phrase relating to amounts treated as paid when includible in gross income under section 860B(b). - § 6049(d)(7)(C): Pub. L. 100–647, § 1006(t)(24), substituted “the adjusted issue price” for “the issue price”. ## § 6050M: Returns relating to persons receiving contracts from Federal executive agencies - § 6050M(e): Pub. L. 100–647 added subsec. (e). ## § 6051: Receipts for employees - § 6051(a)(7): Pub. L. 100–647, § 1018(u)(33), inserted a comma at end. - § 6051(a)(9): Pub. L. 100–647, § 1011B(c)(2)(B), added par. (9). ## § 6103: Confidentiality and disclosure of returns and return information - § 6103(b)(5)(A): Pub. L. 100–647, § 1012(bb)(3)(B), substituted “and the Commonwealth of the Northern Mariana Islands” for “the Commonwealth of the Northern Mariana Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, and the Republic of Palau”. - § 6103(b)(5)(B)(i): Pub. L. 100–647, § 6251, substituted “250,000” for “2,000,000”. - § 6103(e)(1)(A): Pub. L. 100–647, § 1014(e)(4), substituted “section 1(i) or 59(j)” for “section 1(j)”. - § 6103(k)(4): Pub. L. 100–647, § 1012(bb)(3)(A), substituted “or other convention or bilateral agreement” and “such convention or bilateral agreement” for “or other convention” and “such convention”, respectively. - § 6103(m)(6): Pub. L. 100–647, § 8008(c)(1), added par. (6). - § 6103(p)(4): Pub. L. 100–647, § 8008(c)(2)(A)(ii), (iii), in concluding provisions substituted “(m)(2), (4), or (6)” for “(m)(2) or (4)” and inserted at end “For purposes of applying this paragraph in any case to which subsection (m)(6) applies, the term ‘return information’ includes related blood donor records (as defined in section 1141(h)(2) of the Social Security Act).” - § 6103(p)(4)(F)(i): Pub. L. 100–647, § 8008(c)(2)(A)(i)(I), substituted “manner,” for “manner; and”. - § 6103(p)(4)(F)(iii): Pub. L. 100–647, § 8008(c)(2)(A)(i), added cl. (iii). ## § 6114: Treaty-based return positions - Enacted 26 U.S.C. § 6114. ## § 6117: Cross reference ## § 6157: Payment of Federal unemployment tax on quarterly or other time period basis - § 6157: Pub. L. 100–647 struck out subsec. (d) which related to quarterly payment of railroad unemployment repayment tax. ## § 6159: Agreements for payment of tax liability in installments - Enacted 26 U.S.C. § 6159. ## § 6201: Assessment authority - § 6201(a)(4): Pub. L. 100–647, § 1015(r)(1), struck out par. (4) which read as follows: “If on any return or claim for refund of income taxes under subtitle A there is an overstatement of the credit allowable by section 34 (relating to certain uses of gasoline and special fuels) or section 32 (relating to earned income), the amount so overstated which is allowed against the tax shown on the return or which is allowed as a credit or refund may be assessed by the Secretary in the same manner as in the case of a mathematical or clerical error appearing upon the return, except that the provisions of section 6213(b)(2) (relating to abatement of mathematical or clerical error assessments) shall not apply with regard to any assessment under this paragraph.” - § 6201(b)(2): Pub. L. 100–647, § 7106(c)(2), struck out “or tax imposed by section 3321” after “employment tax”. ## § 6211: Definition of a deficiency - § 6211(b)(4): Pub. L. 100–647, § 1015(r)(2), amended par. (4) generally. Prior to amendment, par. (4) read as follows: “The tax imposed by subtitle A and the tax shown on the return shall both be determined without regard to the credit under section 34, unless, without regard to such credit, the tax imposed by subtitle A exceeds the excess of the amount specified in subsection (a)(1) over the amount specified in subsection (a)(2).” ## § 6212: Notice of deficiency - § 6212(d): Pub. L. 100–647 inserted sentence at end that nothing in this subsection shall affect suspension of running of period of limitations during period during which rescinded notice was outstanding. ## § 6213: Restrictions applicable to deficiencies; petition to Tax Court - § 6213(a): Pub. L. 100–647, § 6243(a), substituted for period at end “, including the Tax Court. The Tax Court shall have no jurisdiction to enjoin any action or proceeding under this subsection unless a timely petition for a redetermination of the deficiency has been filed and then only in respect of the deficiency that is the subject of such petition.” - § 6213(h)(3), § 6213(h): Pub. L. 100–647, § 1015(r)(3), as amended by Pub. L. 101–239, redesignated par. (4) as (3) and struck out former par. (3) which read as follows: “For assessment as if a mathematical error on the return, in the case of erroneous claims for credits under section 32 or 34, see section 6201(a)(4).” ## § 6214: Determinations by Tax Court - § 6214(e): Pub. L. 100–647 substituted “references” for “reference” in heading, designated existing provisions as par. (1), and added par. (2). ## § 6302: Mode or time of collection - § 6302(d): Pub. L. 100–647 substituted “Time for payment of manufacturers’ excise tax on sporting goods” for “Time for payment of manufacturers excise tax on sport fishing equipment” in heading and amended text generally. Prior to amendment, subsec. (d) read as follows: “The tax imposed by section 4161(a) (relating to manufacturers excise tax on sport fishing equipment) shall be due and payable on the date for filing the return for such tax.” ## § 6317: Payments of Federal unemployment tax for calendar quarter - § 6317: Pub. L. 100–647 struck out “or tax imposed by section 3321” after “unemployment tax” and “and 23A, as the case may be,” after “chapter 23”. ## § 6323: Validity and priority against certain persons - § 6323(f)(1)(A)(ii): Pub. L. 100–647, § 1015(s)(1)(A), inserted exception that State law merely conforming to or reenacting Federal law establishing a national filing system does not constitute a second office for filing as designated by the laws of such State. - § 6323(f)(5): Pub. L. 100–647, § 1015(s)(1)(B), added par. (5). ## § 6326: Administrative appeal of liens - Enacted 26 U.S.C. § 6326. ## § 6327: Cross references ## § 6331: Levy and distraint - § 6331(d)(2): Pub. L. 100–647, § 6236(a)(1), (2), substituted “30-day” for “10-day” in heading and “30 days” for “10 days” in text. - § 6331(d)(4): Pub. L. 100–647, § 6236(a)(3), added par. (4). - § 6331(e): Pub. L. 100–647, § 6236(b)(1), amended subsec. (e) generally. Prior to amendment, subsec. (e) consisted of two pars. relating to effect of continuing levy on salary and wages and release and notice of release of levy. - § 6331(f), § 6331(g): Pub. L. 100–647, § 6236(d), added subsecs. (f) and (g). Former subsec. (f) redesignated (h). - § 6331(h): Pub. L. 100–647, § 6236(b)(2), (d), redesignated subsec. (f) as (h) and added par. (3). ## § 6332: Surrender of property subject to levy - § 6332(a): Pub. L. 100–647, § 6236(e)(2)(A), substituted “subsections (b) and (c)” for “subsection (b)”. - § 6332(c): Pub. L. 100–647, § 6236(e)(1), added subsec. (c). Former subsec. (c) redesignated (d). - § 6332(d): Pub. L. 100–647, § 6236(e)(1), redesignated subsec. (c) as (d). Former subsec. (d) redesignated (e). - § 6332(d): Pub. L. 100–647, § 1015(t)(1), inserted “and any other person” after “delinquent taxpayer” and struck out sentence at end providing that in the case of a levy which is satisfied pursuant to subsection (b), such organization shall also be discharged from any obligation or liability to any beneficiary arising from such surrender or payment. - § 6332(e): Pub. L. 100–647, § 6236(e)(1), (2)(B), redesignated subsec. (d) as (e) and substituted “subsection (d)(1)” for “subsection (c)(1)”. Former subsec. (e) redesignated (f). - § 6332(f): Pub. L. 100–647, § 6236(e)(1), redesignated subsec. (e) as (f). ## § 6334: Property exempt from levy - § 6334(a)(2): Pub. L. 100–647, § 6236(c)(1), substituted “$1,650 ($1,550 in the case of levies issued during 1989)” for “$1,500”. - § 6334(a)(3): Pub. L. 100–647, § 6236(c)(2), substituted “$1,100 ($1,050 in the case of levies issued during 1989)” for “$1,000”. - § 6334(a)(10)(A): Pub. L. 100–647, § 1015(o)(1), substituted “III, IV, V,” for “IV” and added “or” at end. - § 6334(a)(10)(B), § 6334(a)(10): Pub. L. 100–647, § 1015(o)(2), (3), redesignated subpar. (C) as (B) and substituted “13, 21, 23” for “21”, and struck out former subpar. (B), which read as follows: “subchapter I, II, or III of chapter 19 of such title 38, or”. - § 6334(a)(11), § 6334(a)(12), § 6334(a)(13): Pub. L. 100–647, § 6236(c)(4)(A), added pars. (11) to (13). - § 6334(d)(1): Pub. L. 100–647, § 6236(c)(3)(A), amended par. (1) generally, striking out after introductory provisions the following definition of exempt amount: - § 6334(d)(2), § 6334(d)(3): Pub. L. 100–647, § 6236(c)(3)(B), added par. (2) and redesignated former par. (2) as (3). - § 6334(e): Pub. L. 100–647, § 6236(c)(4)(B), added subsec. (e). ## § 6335: Sale of seized property - § 6335(f), § 6335(g): Pub. L. 100–647 added subsec. (f) and redesignated former subsec. (f) as (g). ## § 6343: Authority to release levy and return property - § 6343(a): Pub. L. 100–647 inserted “and notice of release” after “levy” in heading and amended text generally. Prior to amendment, text read as follows: “It shall be lawful for the Secretary, under regulations prescribed by the Secretary, to release the levy upon all or part of the property or rights to property levied upon where the Secretary determines that such action will facilitate the collection of the liability, but such release shall not operate to prevent any subsequent levy.” ## § 6401: Amounts treated as overpayments - § 6401(b)(2): Pub. L. 100–647 amended last sentence generally, substituting “credit so allowed by reason of section 1446” for “amount deducted and withheld under section 1446”. ## § 6402: Authority to make credits or refunds - § 6402(i): Pub. L. 100–647 added subsec. (i). ## § 6404: Abatements - § 6404(e)(1)(B): Pub. L. 100–647, § 1015(n), inserted “error or” before “delay” and “erroneous or” before “dilatory”. - § 6404(f): Pub. L. 100–647, § 6229(a), added subsec. (f). ## § 6411: Tentative carryback and refund adjustments - § 6411(c): Pub. L. 100–647 struck out “unused research credit,” after “net capital loss,”. ## § 6416: Certain taxes on sales and services - § 6416(a)(4): Pub. L. 100–647, § 6102(a), added par. (4). - § 6416(b)(2): Pub. L. 100–647, § 2001(d)(1)(B), substituted “(or under subsection (a) or (d) of section 4041 in respect of sales or under section 4051)” for “(or under paragraph (1)(A) or (2)(A) of section 4041(a) or under paragraph (1)(A) or (2)(A) of section 4041(d) or under section 4051)”. ## § 6421: Gasoline used for certain nonhighway purposes, used by local transit systems, or sold for certain exempt purposes - § 6421(a): Pub. L. 100–647, § 2001(d)(3)(F), substituted “paragraph (2) of subsection (f)” for “paragraph (3) of subsection (e)”. - § 6421(a): Pub. L. 100–647, § 1017(c)(7), substituted “subsection (j)” for “subsection (i)”. - § 6421(b)(1): Pub. L. 100–647, § 1017(c)(7), substituted “subsection (j)” for “subsection (i)”. - § 6421(d)(3): Pub. L. 100–647, § 1017(c)(15), added par. (3). - § 6421(f)(2): Pub. L. 100–647, § 2001(d)(3)(E), added par. (2) and struck out former par. (2) which read as follows: “This section shall not apply in respect of gasoline which is used as a fuel in an aircraft in noncommercial aviation (as defined in section 4041(c)(4)).” - § 6421(f)(3): Pub. L. 100–647, § 2001(d)(3)(E), added par. (3). - § 6421(f): Pub. L. 100–647, § 2001(d)(3)(E), struck out par. (4) which read as follows: “This section shall not apply with respect to the tax imposed by section 4081 at the Leaking Underground Storage Tank Trust Fund financing rate on gasoline used in any off-highway business use other than use in a vessel employed in the fisheries or in the whaling business.” - § 6421(i): Pub. L. 100–647, § 1017(c)(6), redesignated subsec. (i), relating to income tax credit in lieu of payment, as (j). - § 6421(j): Pub. L. 100–647, § 1017(c)(6), (8), redesignated subsec. (i), relating to income tax credit in lieu of payment, as (j), and substituted “subsection (d)(2)” for “subsection (c)(2)” in par. (2). Former subsec. (j) redesignated (k). - § 6421: Pub. L. 100–647, § 1017(c)(6), redesignated former subsec. (j) as (k). ## § 6427: Fuels not used for taxable purposes - § 6427(f): Pub. L. 100–647, § 2001(d)(7)(B), substituted “regular tax rate” for “regular Highway Trust Fund financing rate” in two places and “incentive tax rate” for “incentive Highway Trust Fund Financing rate”, notwithstanding directory language that “incentive tax rate” was to be substituted for “Highway Trust Fund financing rate”. - § 6427(f): Pub. L. 100–647, § 2001(d)(7)(C), as amended by Pub. L. 101–239, § 7812(a), amended subpar. (B) generally. Prior to amendment, subpar. (B) defined “regular Highway Trust Fund financing rate” and “incentive Highway Trust Fund Financing rate”. - § 6427(i)(1): Pub. L. 100–647, § 3002(c)(1), substituted “paragraphs (2), (3), and (4)” for “paragraph (2)”. - § 6427(i)(2)(A)(i): Pub. L. 100–647, § 3002(c)(2), struck out “(l),” after “and”. - § 6427(i)(4): Pub. L. 100–647, § 3002(a), added par. (4). - § 6427(k)(2): Pub. L. 100–647, § 3002(b), substituted “paragraph (2), (3), or (4)” for “paragraph (2) or (3)”. - § 6427(k)(2): Pub. L. 100–647, § 1017(c)(10), substituted “paragraph (2) or (3) of subsection (i).” for “subsection” and all that followed, thereby effecting the purpose of the amendment contained in section 1703(e)(2)(E) of Pub. L. 99–514. See 1986 Amendment note below. - § 6427(l)(2): Pub. L. 100–647, § 2001(d)(7)(D), inserted “under section 4041” after “exempt”. - § 6427(l)(3)(B): Pub. L. 100–647, § 2004(s)(2), inserted “(except as supplies for vessels or aircraft within the meaning of section 4221(d)(3))” after “aircraft”. - § 6427(m): Pub. L. 100–647, § 1017(c)(3), substituted “6421(e)(2)” for ‘6421(d)(2)”. - § 6427(p), § 6427: Pub. L. 100–647, § 2004(s)(3), redesignated subsec. (p), relating to gasoline used in noncommercial aviation during period rate reduction in effect, as (q). Former subsec. (q), relating to cross references, redesignated (r). - § 6427: Pub. L. 100–647, § 2004(s)(3), redesignated subsec. (q), relating to cross references, as (r). ## § 6501: Limitations on assessment and collection - § 6501(n): Pub. L. 100–647, § 4008(c)(2), substituted “, 41(h), or 51(j)” for “or 51(j)”. - § 6501(o): Pub. L. 100–647, § 1008(j)(1), struck out par. (3) which read as follows: “For extension of period in the case of certain contributions in aid of construction, see section 118(c).” ## § 6502: Collection after assessment - § 6502(a): Pub. L. 100–647 amended last sentence generally. Prior to amendment, last sentence read as follows: “The period provided by this subsection during which a tax may be collected by levy shall not be extended or curtailed by reason of a judgment against the taxpayer.” ## § 6511: Limitations on credit or refund - § 6511(d)(4)(C): Pub. L. 100–647, § 1018(u)(21), made technical correction to directory language of Pub. L. 99–514, § 231(d)(3)(I), see 1986 Amendment note below. - § 6511(f): Pub. L. 100–647, § 1018(u)(51), substituted “similar taxes” for “certain chapter 43 taxes” in heading, and “section 4912, chapter 42,” for “chapter 42” in text. - § 6511(i)(6): Pub. L. 100–647, § 1017(c)(11), substituted “section 6421(d)” for “section 6421(c)”. ## § 6512: Limitations in case of petition to Tax Court - § 6512(a): Pub. L. 100–647, § 6247(b)(1), substituted “interest or section 7481(d) solely with respect to a determination of estate tax by the Tax Court)” for “interest)”. - § 6512(a): Pub. L. 100–647, § 6246(b)(1), inserted “(or 7481(c) with respect to a determination of statutory interest)” after “section 6213(a)”. - § 6512(b)(1): Pub. L. 100–647, § 6244(a), substituted “paragraph (3)” for “paragraph (2)”. - § 6512(b)(2), § 6512(b)(3): Pub. L. 100–647, § 6244(a), added par. (2) and redesignated former par. (2) as (3). - § 6512(c): Pub. L. 100–647, § 6244(b)(2), substituted “references” for “reference” in heading, designated existing provisions as par. (1), and added par. (2). ## § 6513: Time return deemed filed and tax considered paid - § 6513(e): Pub. L. 100–647 struck out last sentence which read as follows: “Notwithstanding subsection (a), for purposes of section 6511, any payment of tax imposed by chapter 23A which, pursuant to section 6157, is made for a calendar quarter within a taxable period shall, if made before the last day prescribed for filing the return for the taxable period (determined without regard to any extension of time for filing), be considered made on such last day.” ## § 6601: Interest on underpayment, nonpayment, or extensions of time for payment, of tax - § 6601(b)(1): Pub. L. 100–647, § 6234(b)(1), inserted “or any installment agreement entered into under section 6159” after “time for payment”. - § 6601(b)(2): Pub. L. 100–647, § 1018(u)(42), made technical correction to directory language of Pub. L. 99–514, § 1404(c)(3), see 1986 Amendment note below. - § 6601(e)(2)(A), § 6601(e)(2)(B): Pub. L. 100–647, § 1015(b)(2)(C), substituted “6653, 6659” for “6659”. - § 6601(i): Pub. L. 100–647, § 7106(c)(5), struck out “or 3321” after “3301”. ## § 6621: Determination of rate of interest - § 6621(a)(1)(A), § 6621(a)(2)(A): Pub. L. 100–647, § 1015(d)(1), substituted “Federal short-term” for “short-term Federal”. - § 6621(b): Pub. L. 100–647, § 1015(d)(2), substituted “Federal short-term” for “short-term Federal” in heading. - § 6621(b)(1): Pub. L. 100–647, § 1015(d)(1), substituted “Federal short-term” for “short-term Federal”. ## § 6652: Failure to file certain information returns, registration statements, etc. - § 6652(j): Pub. L. 100–647, § 1017(b), amended subsec. (j) as it existed prior to its repeal by Pub. L. 100–203, § 10502(d)(11), by inserting “(and the corresponding provision of section 4041(d)(1))” after “section 4041(a)(1)”, see 1987 Amendment note below. - § 6652(k): Pub. L. 100–647, § 3021(a)(10), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “the employer-provided benefit (within the meaning of section 89 without regard to subsection (g)(3) thereof) with respect to the employee to whom such failure relates.” See Codification note above. - § 6652(k): Pub. L. 100–647, § 1011B(a)(10), substituted “subsection (g)(3)(C)(i)” for “subsection (g)(3)”. See Codification note above. - § 6652(k): Pub. L. 100–647, § 1018(u)(36), substituted “or part II of subchapter B of this chapter” for “or section 6678”. See Codification note above. ## § 6653: Failure to pay stamp tax - § 6653: Pub. L. 100–647, § 1015(b)(2)(A), amended par. (1) generally. Prior to amendment, par. (1) read as follows: “If any part of any underpayment (as defined in subsection (c)) is due to negligence or disregard of rules or regulations, there shall be added to the tax an amount equal to the sum of— - § 6653: Pub. L. 100–647, § 1015(b)(2)(B), amended par. (1) generally. Prior to amendment, par. (1) read as follows: “If any part of any underpayment (as defined in subsection (c)) of tax required to be shown on a return is due to fraud, there shall be added to the tax an amount equal to the sum of— - § 6653: Pub. L. 100–647, § 1015(b)(3), inserted at end “If any penalty is imposed under subsection (a) by reason of the preceding sentence, only the portion of the underpayment which is attributable to the failure described in the preceding sentence shall be taken into account in determining the amount of the penalty under subsection (a).” ## § 6654: Failure by individual to pay estimated income tax - § 6654(f)(1): Pub. L. 100–647, § 4005(g)(5), inserted “(other than any increase in such tax by reason of section 143(m))” after “chapter 1”. - § 6654(l): Pub. L. 100–647, § 1014(d)(2), substituted “Estates and trusts” for “Trusts and certain estates” in heading and amended text generally. Prior to amendment, text read as follows: “This section shall apply to— - § 6654(l): Pub. L. 100–647, § 1014(d)(1), made clarifying amendment to directory language of Pub. L. 99–514, § 1404(a), to reflect prior redesignation of subsec. (k) as (l) by section 1841 of Pub. L. 99–514, see 1986 Amendment note below. ## § 6655: Failure by corporation to pay estimated income tax - § 6655(e)(1): Pub. L. 100–647, § 5001(a), struck out at end “A reduction shall be treated as recaptured for purposes of subparagraph (B) if 90 percent of the reduction is recaptured.” - § 6655(g)(3): Pub. L. 100–647, § 2004(r), inserted last sentence, and struck out former last sentence which read as follows: “In the case of any organization described in subparagraph (A), subsection (b)(2)(A) shall be applied by substituting ‘5th month’ for ‘3rd month’.” ## § 6657: Bad checks - § 6657: Pub. L. 100–647 substituted “2” for “1”, “$750” for “$500”, and “$15” for “$5”. ## § 6673: Sanctions and costs awarded by courts - § 6673: Pub. L. 100–647 struck out “Tax” after “before the” in section catchline, designated existing provisions as subsec. (a), and added subsec. (b). ## § 6693: Failure to provide reports on certain tax-favored accounts or annuities; penalties relating to designated nondeductible contributions - § 6693: Pub. L. 100–647, § 1011(b)(4)(B)(i), substituted “penalties relating to” for “overstatement of” in section catchline. - § 6693(b): Pub. L. 100–647, § 1011(b)(4)(A), substituted “Penalties relating to” for “Overstatement of designated” in heading and amended text generally. Prior to amendment, text read as follows: “Any individual who— ## § 6712: Failure to disclose treaty-based return positions - Enacted 26 U.S.C. § 6712. ## § 6713: Disclosure or use of information by preparers of returns - Enacted 26 U.S.C. § 6713. ## § 6724: Waiver; definitions and special rules - § 6724(d)(1)(B): Pub. L. 100–647, § 3001(b)(1), which directed that “or” be struck out at end of cl. (ix), “, or” be substituted for period at end of cl. (x), and cl. (xi) relating to section 4093 be added, was executed by striking out “or” at end of cl. (ix) and adding cl. (xi) in view of intervening amendments by section 1941(b)(2)(M)(i) of Pub. L. 100–418, and by section 1006(h)(3)(A) of Pub. L. 100–647. - § 6724(d)(1)(B): Pub. L. 100–647, § 1006(h)(3)(A), struck out “or” at end of cl. (ix), substituted “, or” for period at end of cl. (x), and added cl. (xi) relating to section 1060. - § 6724(d)(2): Pub. L. 100–647, § 3001(b)(2), which directed that “or” be struck out at end of subpar. (S), “, or” be substituted for period at end of subpar. (T), and subpar. (U) be added, was executed by adding subpar. (U) in view of intervening amendment by section 1941(b)(2)(M)(ii) of Pub. L. 100–418. - § 6724(d)(2)(B): Pub. L. 100–647, § 1015(a), substituted “6031(b) or (c)” for “6031(b)”. ## § 6863: Stay of collection of jeopardy assessments - § 6863(b)(3)(C): Pub. L. 100–647 added subpar. (C). ## § 6867: Presumptions where owner of large amount of cash is not identified - § 6867(b)(2): Pub. L. 100–647 substituted “the highest rate of tax specified in section 1” for “a 50-percent rate”. ## § 7210: Failure to obey summons - § 7210: Pub. L. 100–647, § 1017(c)(12), made technical correction to language of Pub. L. 99–514, § 1703(e)(2)(G), see 1986 Amendment note below. - § 7210: Pub. L. 100–647, § 1017(c)(9), substituted “6421(g)(2)” for “6421(f)(2)”. ## § 7213: Unauthorized disclosure of information - § 7213(a)(2): Pub. L. 100–647 substituted “(m)(2), (4), or (6)” for “(m)(2) or (4)”. ## § 7216: Disclosure or use of information by preparers of returns - § 7216(a): Pub. L. 100–647 substituted “and who knowingly or recklessly” for “and who”. ## § 7232: Failure to register or reregister under section 4101, false representations of registration status, etc. - § 7232: Pub. L. 100–647 substituted “, lubricating oil, diesel fuel, or aviation fuel” for “or lubricating oil” in section catchline and in text. ## § 7429: Review of jeopardy levy or assessment procedures - § 7429: Pub. L. 100–647, § 6237(e)(3), inserted “levy or” after “jeopardy” in section catchline. - § 7429(a)(1): Pub. L. 100–647, § 6237(a), inserted “or levy is made under section 6331(a) less than 30 days after notice and demand for payment is made under section 6331(a),” after “6862,” and “or levy” after “such assessment”. - § 7429(a)(3): Pub. L. 100–647, § 6237(b), amended par. (3) generally. Prior to amendment, par. (3) read as follows: “After a request for review is made under paragraph (2), the Secretary shall determine whether or not— - § 7429(b): Pub. L. 100–647, § 6237(c), amended subsec. (b) generally, substituting provisions of pars. (1) to (4) for provisions of former pars. (1) to (3) relating to actions permitted, determination by district court, and order of district court. - § 7429(c): Pub. L. 100–647, § 6237(e)(1), struck out “district” before “court”. - § 7429(e): Pub. L. 100–647, § 6237(d), amended subsec. (e) generally. Prior to amendment, subsec. (e) read as follows: “A civil action under subsection (b) shall be commenced only in the judicial district described in section 1402(a)(1) or (2) of title 28, United States Code.” - § 7429(f): Pub. L. 100–647, § 6237(e)(1), struck out “district” after “made by a”. - § 7429(g)(1): Pub. L. 100–647, § 6237(e)(2), in heading substituted “levy, termination,” for “termination” and in text substituted “a proceeding” for “an action” and inserted “the making of a levy described in subsection (a)(1) or” after “whether”. - § 7429(g)(2): Pub. L. 100–647, § 6237(e)(2)(C), substituted “a proceeding” for “an action”. ## § 7430: Awarding of costs and certain fees - § 7430: Pub. L. 100–647, § 6239(a), substituted “costs” for “court costs” in section catchline and amended text generally, revising and restating provisions so as to include costs and fees in administrative proceedings. - § 7430(c)(2)(A): Pub. L. 100–647, § 1015(i), amended cl. (iii) generally. Prior to amendment, cl. (iii) read as follows: “meets the requirements of section 504(b)(1)(B) of title 5, United States Code (as in effect on the date of the enactment of the Tax Reform Act of 1986 and applied by taking into account the commencement of the proceeding described in subsection (a) in lieu of the initiation of the adjudication referred to in such section).” ## § 7432: Civil damages for failure to release lien - Enacted 26 U.S.C. § 7432. ## § 7433: Civil damages for certain unauthorized collection actions - Enacted 26 U.S.C. § 7433. ## § 7437: Cross references ## § 7447: Retirement - § 7447(d): Pub. L. 100–647 inserted at end “In computing the rate of the retired pay under paragraph (1) of this subsection for any individual who is entitled thereto, any period during which such individual performs services under subsection (c) on a substantially full-time basis shall be treated as a period during which he has served as a judge.” ## § 7478: Declaratory judgments relating to status of certain governmental obligations - § 7478(a): Pub. L. 100–647 substituted “whether interest on prospective obligations will be excludable from gross income under section 103(a)” for “whether prospective obligations are described in section 103(a)” in par. (1) and “whether interest on such prospective obligations will be excludable from gross income under section 103(a)” for “whether such prospective obligations are described in section 103(a)” in concluding provisions. ## § 7481: Date when Tax Court decision becomes final - § 7481(a): Pub. L. 100–647, § 6247(b)(2), substituted “subsections (b), (c), and (d)” for “subsections (b) and (c)”. - § 7481(a): Pub. L. 100–647, § 6246(b)(2), substituted “subsections (b) and (c)” for “subsection (b)”. - § 7481(c): Pub. L. 100–647, § 6246(a), added subsec. (c). - § 7481(d): Pub. L. 100–647, § 6247(a), added subsec. (d). ## § 7482: Courts of review - § 7482(a)(3): Pub. L. 100–647 added par. (3). ## § 7518: Tax incentives relating to merchant marine capital construction funds - § 7518(g)(1): Pub. L. 100–647, § 1018(u)(23), substituted “not a qualified withdrawal” for “not qualified withdrawal”. - § 7518(g)(6)(A): Pub. L. 100–647, § 1002(m)(1), substituted “section 1(j)” for “section 1(i)”. ## § 7519: Required payments for entities electing not to have required taxable year - § 7519(b)(2): Pub. L. 100–647, § 2004(e)(4)(A), amended par. (2) generally. Prior to amendment, par. (2) read as follows: “the amount of the required payment for the preceding applicable election year.” - § 7519(c): Pub. L. 100–647, § 2004(e)(5), amended subsec. (c) generally. Prior to amendment, subsec. (c) read as follows: “If the amount determined under subsection (b)(2) exceeds the amount determined under subsection (b)(1), then the entity shall be entitled to a refund of such excess.” - § 7519(d)(2)(A): Pub. L. 100–647, § 2004(e)(10), substituted “(other than credits and tax-exempt income)” for “(other than credits)”. - § 7519(d)(2)(B): Pub. L. 100–647, § 2004(e)(7), (10), substituted “(other than credits and tax-exempt income)” for “(other than credits)” and inserted before period at end “(and such corporation shall be treated as an S corporation for such taxable year for purposes of paragraph (3))”. - § 7519(d)(3)(A): Pub. L. 100–647, § 2004(e)(14)(B), struck out “or incurred” after “amounts paid”. - § 7519(d)(4): Pub. L. 100–647, § 2004(e)(9), inserted at end “Notwithstanding the preceding provisions of this paragraph, for taxable years beginning after 1987, the applicable percentage for any partnership or S corporation shall be 100 percent if more than 50 percent of such entity’s net income for the short taxable year which would have resulted if the entity had not made an election under section 444 would have been allocated to partners or shareholders who would not have been entitled to the benefits of section 806(e)(2)(C) of the Tax Reform Act of 1986 with respect to such income.” - § 7519(d)(5): Pub. L. 100–647, § 2004(e)(8), added par. (5). - § 7519(e)(4): Pub. L. 100–647, § 2004(e)(4)(B), added par. (4). - § 7519(g): Pub. L. 100–647, § 2004(e)(6), substituted “including regulations providing for appropriate adjustments in the application of this section and sections 280H and 444 in cases where— ## § 7520: Valuation tables - Enacted 26 U.S.C. § 7520. ## § 7521: Procedures involving taxpayer interviews - Enacted 26 U.S.C. § 7521. ## § 7522: Content of tax due, deficiency, and other notices - Enacted 26 U.S.C. § 7522. ## § 7603: Service of summons - § 7603: Pub. L. 100–647, § 1017(c)(12), made technical correction to language of Pub. L. 99–514, § 1703(e)(2)(G), see 1986 Amendment note below. - § 7603: Pub. L. 100–647, § 1017(c)(9), substituted “6421(g)(2)” for “6421(f)(2)”. ## § 7604: Enforcement of summons - § 7604(b), § 7604(c)(2): Pub. L. 100–647, § 1017(c)(12), made technical correction to language of Pub. L. 99–514, § 1703(e)(2)(G), see 1986 Amendment note below. - § 7604(b), § 7604(c)(2): Pub. L. 100–647, § 1017(c)(9), substituted “6421(g)(2)” for “6421(f)(2)”. ## § 7605: Time and place of examination - § 7605(a): Pub. L. 100–647, § 1017(c)(12), made technical correction to language of Pub. L. 99–514, § 1703(e)(2)(G), see 1986 Amendment note below. - § 7605(a): Pub. L. 100–647, § 1017(c)(9), substituted “6421(g)(2)” for “6421(f)(2)” in two places. ## § 7609: Special procedures for third-party summonses - § 7609(c)(1): Pub. L. 100–647, § 1017(c)(12), made technical correction to language of Pub. L. 99–514, § 1703(e)(2)(G), see 1986 Amendment note below. - § 7609(c)(1): Pub. L. 100–647, § 1017(c)(9), substituted “6421(g)(2)” for “6421(f)(2)”. - § 7609(e)(2): Pub. L. 100–647, § 1015(l)(1), inserted “or the summoned party’s response to a summons described in subsection (f),” after “the summons described in subsection (c),” and substituted “the summons is issued” for “the summons is issued other”. - § 7609(i): Pub. L. 100–647, § 1015(l)(2)(B), inserted “and summoned party” after “recordkeeper” in heading. - § 7609(i)(4): Pub. L. 100–647, § 1015(l)(2)(A), substituted “the summoned party” for “the third-party recordkeeper”. ## § 7610: Fees and costs for witnesses - § 7610(c): Pub. L. 100–647, § 1017(c)(12), made technical correction to language of Pub. L. 99–514, § 1703(e)(2)(G), see 1986 Amendment note below. - § 7610(c): Pub. L. 100–647, § 1017(c)(9), substituted “6421(g)(2)” for “6421(f)(2)”. ## § 7611: Restrictions on church tax inquiries and examinations - § 7611(i)(5): Pub. L. 100–647 substituted “this title” for “the title”. ## § 7654: Coordination of United States and certain possession individual income taxes - § 7654(a): Pub. L. 100–647 substituted “an individual to whom” for “an individual to which”. ## § 7701: Definitions - § 7701(a)(19): Pub. L. 100–647, § 1006(t)(25)(A), inserted at end “For purposes of determining whether any interest in a REMIC qualifies under clause (xi), any regular interest in another REMIC held by such REMIC shall be treated as a loan described in a preceding clause under principles similar to the principles of clause (xi); except that, if such REMIC’s are part of a tiered structure, they shall be treated as 1 REMIC for purposes of clause (xi).” - § 7701(a)(19)(C)(xi): Pub. L. 100–647, § 1006(t)(12), substituted “are assets described” for “are loans described”. - § 7701(a)(20): Pub. L. 100–647, § 1011B(e), substituted “and 106” for “106, and 125” and inserted “and for purposes of applying section 125 with respect to cafeteria plans,” before “the term”. - § 7701(a)(29): Pub. L. 100–647, § 1(c), substituted “Internal Revenue Code of 1986” for “Internal Revenue Code of 1954”. - § 7701(b)(5)(A)(iv): Pub. L. 100–647, § 1018(g)(3), substituted “section 274(l)(1)(B)” for “section 274(k)(2)”. - § 7701(b)(5)(D)(i)(I): Pub. L. 100–647, § 1001(d)(2)(D), substituted “subparagraph (F) or (M)” for “subparagraph (F)”. - § 7701(e)(5): Pub. L. 100–647, § 1002(a)(2), made technical correction to language of Pub. L. 99–514, § 201(d)(14)(B), see 1986 Amendment note below. - § 7701(j)(1)(C): Pub. L. 100–647, § 1011A(m)(1), inserted “, section 401(k)(4)(B),” after “the provisions of paragraph (2)” in subpar. (C), as it read before amendment by Pub. L. 100–202. See Effective Date of 1988 Amendment note below. ## § 7702: Life insurance contract defined - § 7702(c)(3)(B)(i), § 7702(c)(3)(B)(ii): Pub. L. 100–647, § 5011(a), added cls. (i) and (ii) and struck out former cls. (i) and (ii) which read as follows: - § 7702(c)(3)(D): Pub. L. 100–647, § 5011(b), added subpar. (D). - § 7702(j), § 7702(k): Pub. L. 100–647, § 6078(a), added subsec. (j) and redesignated former subsec. (j) as (k). ## § 7702A: Modified endowment contract defined - Enacted 26 U.S.C. § 7702A. ## § 7703: Determination of marital status - § 7703(b)(1): Pub. L. 100–647 substituted “section 151(c)(3)” for “section 151(e)(3)”. ## § 7704: Certain publicly traded partnerships treated as corporations - § 7704(c)(1): Pub. L. 100–647, § 2004(f)(3), inserted at end “For purposes of the preceding sentence, a partnership shall not be treated as being in existence during any period before the 1st taxable year in which such partnership (or a predecessor) was a publicly traded partnership.” - § 7704(d)(1): Pub. L. 100–647, § 2004(f)(4), inserted at end “For purposes of subparagraph (E), the term ‘mineral or natural resource’ means any product of a character with respect to which a deduction for depletion is allowable under section 611; except that such term shall not include any product described in subparagraph (A) or (B) of section 613(b)(7).” - § 7704(d)(3): Pub. L. 100–647, § 2004(f)(5), amended par. (3) generally. Prior to amendment, par. (3) read as follows: “The term ‘real property rent’ means amounts which would qualify as rent from real property under section 856(d) if such section were applied without regard to paragraph (2)(C) thereof (relating to independent contractor requirements).” - § 7704(e)(4): Pub. L. 100–647, § 2004(f)(1), inserted “or to pay such amounts” before “as may be required”. ## § 7802: Internal Revenue Service Oversight Board - § 7802(c): Pub. L. 100–647 added subsec. (c). ## § 7805: Rules and regulations - § 7805(e), § 7805(f): Pub. L. 100–647 added subsecs. (e) and (f). ## § 7811: Taxpayer Assistance Orders - Enacted 26 U.S.C. § 7811. ## § 7852: Other applicable rules - § 7852(d): Pub. L. 100–647 amended subsec. (d) generally. Prior to amendment, subsec. (d) read as follows: “No provision of this title shall apply in any case where its application would be contrary to any treaty obligation of the United States in effect on the date of enactment of this title.” ## § 7872: Treatment of loans with below-market interest rates - § 7872(d)(1)(E)(i): Pub. L. 100–647, § 1005(c)(15), directed substitution of “section 163(d)(4)” for “section 163(d)(3)”, which substitution had been previously made by Pub. L. 99–514, § 511(d)(1). - § 7872(f)(11), § 7872(f): Pub. L. 100–647, § 1018(u)(48), redesignated former par. (11), Pub. L. 99–514, relating to special rule for certain employer security loans, as (12). ## § 7873: Income derived by Indians from exercise of fishing rights - Enacted 26 U.S.C. § 7873. ## § 8021: Powers - § 8021(a): Pub. L. 100–647 substituted “6103(f)” for “6103(d)”. ## § 9506: Inland Waterways Trust Fund - § 9506(b): Pub. L. 100–647 made technical corrections to directory language of Pub. L. 99–499, § 521(b)(3), see 1986 Amendment note below. ## § 9509: Oil Spill Liability Trust Fund - § 9509(b)(3): Pub. L. 100–647, as amended by Pub. L. 101–239, § 7811(m)(3), substituted “Deepwater” for “Deep Water” wherever appearing. ## § 9510: Vaccine Injury Compensation Trust Fund - § 9510(a): Pub. L. 100–647 inserted “appropriated or” before “credited” and “this section or” before “section 9602(b)”.