# Pub. L. 106-170: changes to the Internal Revenue Code 1999-12-17, 113 Stat. 1919. Source: . ## Legislative history - Bill: [H.R. 1180](https://www.congress.gov/bill/106th-congress/house-bill/1180) - House report: [H. Rept. 106-220](https://www.govinfo.gov/content/pkg/CRPT-106hrpt220/html/CRPT-106hrpt220.htm) - Senate report: [S. Rept. 106-37](https://www.govinfo.gov/content/pkg/CRPT-106srpt37/html/CRPT-106srpt37.htm) - Conference report: [H. Rept. 106-478](https://www.govinfo.gov/content/pkg/CRPT-106hrpt478/html/CRPT-106hrpt478.htm) - Bluebook: [JCT general explanation (2001)](https://www.govinfo.gov/app/details/CPRT-107JPRT72236) ## § 24: Child tax credit - § 24(d)(2): Pub. L. 106–170 substituted “2001” for “1998” in introductory provisions. ## § 26: Limitation based on tax liability; definition of tax liability - § 26(a): Pub. L. 106–170 reenacted subsec. heading without change and amended text generally. Prior to amendment, text read as follows: “The aggregate amount of credits allowed by this subpart for the taxable year shall not exceed the excess (if any) of— ## § 32: Earned income - § 32(c)(3)(B): Pub. L. 106–170 added subcl. (I) and redesignated former subcls. (I) and (II) as (II) and (III), respectively. ## § 41: Credit for increasing research activities - § 41(c)(4)(A): Pub. L. 106–170, § 502(b)(1)(A), substituted “2.65 percent” for “1.65 percent”. - § 41(c)(4)(A): Pub. L. 106–170, § 502(b)(1)(B), substituted “3.2 percent” for “2.2 percent”. - § 41(c)(4)(A): Pub. L. 106–170, § 502(b)(1)(C), substituted “3.75 percent” for “2.75 percent”. - § 41(c)(6), § 41(d)(4)(F): Pub. L. 106–170, § 502(c)(1), inserted “, the Commonwealth of Puerto Rico, or any possession of the United States” before period at end. - § 41(h)(1): Pub. L. 106–170, § 502(a)(1)(B), struck out concluding provisions which read as follows: “Notwithstanding the preceding sentence, in the case of a taxpayer making an election under subsection (c)(4) for its first taxable year beginning after June 30, 1996, and before July 1, 1997, this section shall apply to amounts paid or incurred during the 36-month period beginning with the first month of such year. The 36 months referred to in the preceding sentence shall be reduced by the number of full months after June 1996 (and before the first month of such first taxable year) during which the taxpayer paid or incurred any amount which is taken into account in determining the credit under this section.” - § 41(h)(1): Pub. L. 106–170, § 502(a)(1)(A), substituted “June 30, 2004” for “June 30, 1999”. ## § 45: Electricity produced from certain renewable resources, etc. - § 45(c)(1)(C): Pub. L. 106–170, § 507(b)(1), added subpar. (C). - § 45(c)(3): Pub. L. 106–170, § 507(a), reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “The term ‘qualified facility’ means any facility owned by the taxpayer which is originally placed in service after December 31, 1993 (December 31, 1992, in the case of a facility using closed-loop biomass to produce electricity), and before July 1, 1999.” - § 45(c)(4): Pub. L. 106–170, § 507(b)(2), added par. (4). - § 45(d)(6), § 45(d)(7): Pub. L. 106–170, § 507(c), added pars. (6) and (7). ## § 45C: Clinical testing expenses for certain drugs for rare diseases or conditions - § 45C(b)(1): Pub. L. 106–170 substituted “June 30, 2004” for “June 30, 1999”. ## § 51: Amount of credit - § 51(c)(4): Pub. L. 106–170, § 505(a), substituted “December 31, 2001” for “June 30, 1999”. - § 51(i)(2): Pub. L. 106–170, § 505(b), struck out “during which he was not a member of a targeted group” before period at end. ## § 127: Educational assistance programs - § 127(d): Pub. L. 106–170 substituted “December 31, 2001” for “May 31, 2000”. ## § 163: Interest - § 163(j)(3): Pub. L. 106–170 added subpar. (C). ## § 170: Charitable, etc., contributions and gifts - § 170(e)(3)(A), § 170(e)(4)(B): Pub. L. 106–170, § 532(c)(1)(A), (B), substituted “section 1221(a)” for “section 1221”. - § 170(f)(10): Pub. L. 106–170, § 537(a), added par. (10). ## § 198: Expensing of environmental remediation costs - § 198(c)(1)(A): Pub. L. 106–170, § 532(c)(2)(A), substituted “section 1221(a)(1)” for “section 1221(1)”. - § 198(h): Pub. L. 106–170, § 511, substituted “2001” for “2000”. ## § 263A: Capitalization and inclusion in inventory costs of certain expenses - § 263A(b)(2): Pub. L. 106–170 substituted “1221(a)(1)” for “1221(1)”. ## § 267: Losses, expenses, and interest with respect to transactions between related taxpayers - § 267(f)(3)(B)(i), § 267(f)(3)(B)(iii): Pub. L. 106–170 substituted “1221(a)(1)” for “1221(1)”. ## § 280C: Certain expenses for which credits are allowable - § 280C(c)(1): Pub. L. 106–170 inserted “or credit” after “deduction” in two places. ## § 367: Foreign corporations - § 367(a)(3): Pub. L. 106–170 substituted “section 1221(a)” for “section 1221”. ## § 420: Transfers of excess pension assets to retiree health accounts - § 420(b)(1)(C)(iii): Pub. L. 106–170, § 535(b)(2)(A), substituted “cost” for “benefits”. - § 420(b): Pub. L. 106–170, § 535(a)(1), substituted “made after December 31, 2005” for “in any taxable year beginning after December 31, 2000”. - § 420(c)(3): Pub. L. 106–170, § 535(b)(1), amended heading and text of par. (3) generally, substituting present provisions for provisions relating to maintenance of benefit requirements. - § 420(e)(1)(D): Pub. L. 106–170, § 535(b)(2)(B), substituted “or in calculating applicable employer cost under subsection (c)(3)(B)” for “and shall not be subject to the minimum benefit requirements of subsection (c)(3)”. ## § 453: Installment method - § 453(a): Pub. L. 106–170, § 536(a)(1), which substituted “Use of installment method” for “General rule” in subsec. heading, designated existing provisions as par. (1) and inserted heading, and added heading and text of par. (2), text of which read as follows: “(2) Accrual method taxpayer.—The installment method shall not apply to income from an installment sale if such income would be reported under an accrual method of accounting without regard to this section. The preceding sentence shall not apply to a disposition described in subparagraph (A) or (B) of subsection (l)(2).”, was repealed by Pub. L. 106–573, § 2(a). See Effective Date and Construction of 2000 Amendment note below. - § 453(d)(1), § 453(i)(1), § 453(k): Pub. L. 106–170, § 536(a)(2), which substituted “(a)(1)” for “(a)” wherever appearing, was repealed by Pub. L. 106–573. See Effective Date and Construction of 2000 Amendment note below. ## § 453A: Special rules for nondealers - § 453A(d)(4): Pub. L. 106–170 inserted at end “A payment shall be treated as directly secured by an interest in an installment obligation to the extent an arrangement allows the taxpayer to satisfy all or a portion of the indebtedness with the installment obligation.” ## § 475: Mark to market accounting method for dealers in securities - § 475(c)(3): Pub. L. 106–170 substituted “manages” for “reduces”. ## § 543: Personal holding company income - § 543(a)(1)(D): Pub. L. 106–170 substituted “1221(a)(1)” for “1221(1)”. ## § 613A: Limitations on percentage depletion in case of oil and gas wells - § 613A(c)(6): Pub. L. 106–170 substituted “January 1, 2002” for “January 1, 2000”. ## § 732: Basis of distributed property other than money - § 732(f): Pub. L. 106–170 added subsec. (f). ## § 751: Unrealized receivables and inventory items - § 751(d)(1): Pub. L. 106–170 substituted “section 1221(a)(1)” for “section 1221(1)”. ## § 818: Other definitions and special rules - § 818(b)(2): Pub. L. 106–170, § 532(c)(3), substituted “section 1221(a)(2)” for “section 1221(2)”. - § 818(c)(3): Pub. L. 106–170, § 532(c)(1)(D), substituted “section 1221(a)” for “section 1221”. ## § 852: Taxation of regulated investment companies and their shareholders - § 852(c)(3): Pub. L. 106–170, § 566(a)(1), added par. (3). - § 852(e)(1): Pub. L. 106–170, § 566(c), inserted at end “If the determination under subparagraph (A) is solely as a result of the failure to meet the requirements of subsection (a)(2), the preceding sentence shall also apply for purposes of applying subsection (a)(2) to the non-RIC year and the amount referred to in paragraph (2)(A)(i) shall be the portion of the accumulated earnings and profits which resulted in such failure.” ## § 856: Definition of real estate investment trust - § 856(c)(2)(D), § 856(c)(3)(C): Pub. L. 106–170, § 532(c)(2)(H), (I), substituted “section 1221(a)(1)” for “section 1221(1)”. - § 856(c)(4)(B): Pub. L. 106–170, § 541(a), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “not more than 25 percent of the value of its total assets is represented by securities (other than those includible under subparagraph (A)) for purposes of this calculation limited in respect of any one issuer to an amount not greater in value than 5 percent of the value of the total assets of the trust and to not more than 10 percent of the outstanding voting securities of such issuer.” - § 856(c)(7): Pub. L. 106–170, § 541(b), added par. (7). - § 856(d)(1): Pub. L. 106–170, § 542(b)(3)(A)(i), substituted “fair market values” for “adjusted bases” in two places in concluding provisions. - § 856(d)(2)(B): Pub. L. 106–170, § 542(b)(2), inserted “except as provided in paragraph (8),” after “(B)” in introductory provisions. - § 856(d)(2)(B)(i): Pub. L. 106–170, § 542(b)(3)(B)(i), substituted “value” for “number”. - § 856(d)(3): Pub. L. 106–170, § 561(a), inserted concluding provisions. - § 856(d)(7)(C)(i): Pub. L. 106–170, § 542(a), inserted “or through a taxable REIT subsidiary of such trust” after “income”. - § 856(d)(8), § 856(d)(9): Pub. L. 106–170, § 542(b)(1), added pars. (8) and (9). - § 856(e)(1): Pub. L. 106–170, § 532(c)(2)(J), substituted “section 1221(a)(1)” for “section 1221(1)”. - § 856(e)(6): Pub. L. 106–170, § 551(a), added par. (6). - § 856(i)(2): Pub. L. 106–170, § 543(b), inserted at end “Such term shall not include a taxable REIT subsidiary.” - § 856(j)(2)(B): Pub. L. 106–170, § 532(c)(2)(K), substituted “section 1221(a)(1)” for “section 1221(1)”. - § 856(l): Pub. L. 106–170, § 543(a), added subsec. (l). ## § 857: Taxation of real estate investment trusts and their beneficiaries - § 857(a)(1)(A)(i), § 857(a)(1)(A)(ii): Pub. L. 106–170, § 556(a), substituted “90 percent” for “95 percent (90 percent for taxable years beginning before January 1, 1980)”. - § 857(b)(2)(E): Pub. L. 106–170, § 545(b), substituted “paragraphs (5) and (7)” for “paragraph (5)”. - § 857(b)(4)(B)(i): Pub. L. 106–170, § 532(c)(2)(L), substituted “section 1221(a)(1)” for “section 1221(1)”. - § 857(b)(5)(A)(i): Pub. L. 106–170, § 556(b), substituted “90 percent” for “95 percent (90 percent in the case of taxable years beginning before January 1, 1980)”. - § 857(b)(6)(B)(iii): Pub. L. 106–170, § 532(c)(2)(M), substituted “section 1221(a)(1)” for “section 1221(1)”. - § 857(b)(7), § 857(b)(8), § 857(b)(9): Pub. L. 106–170, § 545(a), added par. (7) and redesignated former pars. (7) and (8) as (8) and (9), respectively. - § 857(d)(3)(A): Pub. L. 106–170, § 566(a)(2), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “shall be treated for purposes of this subsection and subsection (a)(2)(B) as made from the earliest earnings and profits accumulated in any taxable year to which the provisions of this part did not apply rather than the most recently accumulated earnings and profits, and”. - § 857(d)(3)(B): Pub. L. 106–170, § 566(b), inserted “and section 858” before period at end. ## § 864: Definitions and special rules - § 864(c)(4)(B)(iii), § 864(d)(3)(A), § 864(d)(6)(A): Pub. L. 106–170 substituted “section 1221(a)(1)” for “section 1221(1)”. ## § 865: Source rules for personal property sales - § 865(i)(1): Pub. L. 106–170 substituted “section 1221(a)” for “section 1221”. ## § 871: Tax on nonresident alien individuals - § 871(h)(4)(C)(iv): Pub. L. 106–170 substituted “to manage” for “to reduce”. ## § 904: Limitation on credit - § 904(h): Pub. L. 106–170 inserted at end “This subsection shall not apply to taxable years beginning during 2000 or 2001.” ## § 953: Insurance income - § 953(e)(10): Pub. L. 106–170 substituted “taxable years” for “the first taxable year”, “January 1, 2002” for “January 1, 2000”, and “within which any such” for “within which such”, and inserted at end “If this subsection does not apply to a taxable year of a foreign corporation beginning after December 31, 2001 (and taxable years of United States shareholders ending with or within such taxable year), then, notwithstanding the preceding sentence, subsection (a) shall be applied to such taxable years in the same manner as it would if the taxable year of the foreign corporation began in 1998.” ## § 954: Foreign base company income - § 954(c)(1)(B): Pub. L. 106–170, § 532(c)(2)(Q), as amended by Pub. L. 107–147, § 417(24)(B)(ii), substituted “section 1221(a)(1)” for “section 1221(1)” in concluding provisions. - § 954(h): Pub. L. 106–170, § 503(a), substituted “taxable years” for “the first taxable year”, “January 1, 2002” for “January 1, 2000”, and “within which any such” for “within which such”. ## § 988: Treatment of certain foreign currency transactions - § 988(d)(2)(A)(i), § 988(d)(2)(A)(ii): Pub. L. 106–170 substituted “to manage” for “to reduce”. ## § 995: Taxation of DISC income to shareholders - § 995(b)(1)(C): Pub. L. 106–170 substituted “1221(a)(1)” for “1221(1)”. ## § 1017: Discharge of indebtedness - § 1017(b)(3)(E)(i): Pub. L. 106–170 substituted “1221(a)(1)” for “1221(1)”. ## § 1092: Straddles - § 1092(a)(3)(B): Pub. L. 106–170 substituted “1221(a)” for “1221”. ## § 1221: Capital asset defined - § 1221: Pub. L. 106–170 designated existing provisions as subsec. (a), inserted heading, and added pars. (6) to (8) and subsec. (b). ## § 1231: Property used in the trade or business and involuntary conversions - § 1231(b)(1)(C), § 1231(b)(1)(D): Pub. L. 106–170 substituted “section 1221(a)” for “section 1221”. ## § 1234: Options to buy or sell - § 1234(a)(3)(A): Pub. L. 106–170 substituted “section 1221(a)” for “section 1221”. ## § 1256: Section 1256 contracts marked to market - § 1256(e)(2): Pub. L. 106–170 reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “For purposes of this subsection, the term ‘hedging transaction’ means any transaction if— ## § 1260: Gains from constructive ownership transactions - Enacted 26 U.S.C. § 1260. ## § 1362: Election; revocation; termination - § 1362(d)(3)(C)(ii): Pub. L. 106–170 substituted “section 1221(a)(1)” for “section 1221(1)”. ## § 1397C: Enterprise zone business defined - § 1397C(e)(2): Pub. L. 106–170 substituted “section 1221(a)(4)” for “section 1221(4)”. ## § 4132: Definitions and special rules - § 4132(a)(1)(K): Pub. L. 106–170, § 523(b)(1), repealed Pub. L. 105–277, § 1503(a). See 1998 Amendment note below. - § 4132(a)(1)(L): Pub. L. 106–170, § 523(a)(1), added subpar. (L). ## § 4662: Definitions and special rules - § 4662(c)(2)(C): Pub. L. 106–170 substituted “section 1221(a)(1)” for “section 1221(1)”. ## § 6050P: Returns relating to the cancellation of indebtedness by certain entities - § 6050P(c)(2)(D): Pub. L. 106–170 added subpar. (D). ## § 6103: Confidentiality and disclosure of returns and return information - § 6103(b)(2)(C): Pub. L. 106–170 added subpar. (C). ## § 6110: Public inspection of written determinations - § 6110(b)(1): Pub. L. 106–170 inserted at end “Such term shall not include any advance pricing agreement entered into by a taxpayer and the Secretary and any background information related to such agreement or any application for an advance pricing agreement.” ## § 6654: Failure by individual to pay estimated income tax - § 6654(d)(1)(C)(i): Pub. L. 106–170 in table substituted items assigning applicable percentages of 108.6 for 1999 and 110 for 2000 for item assigning applicable percentage of 106 for 1999 or 2000. ## § 6655: Failure by corporation to pay estimated income tax - § 6655(e)(5): Pub. L. 106–170 added par. (5). ## § 7652: Shipments to the United States - § 7652(f)(1): Pub. L. 106–170 amended par. (1) generally. Prior to amendment, par. (1) read as follows: “$10.50 ($11.30 in the case of distilled spirits brought into the United States during the 5-year period beginning on October 1, 1993), or.” ## § 7704: Certain publicly traded partnerships treated as corporations - § 7704(c)(3), § 7704(d)(1)(D), § 7704(d)(1)(G), § 7704(d)(5): Pub. L. 106–170 substituted “section 1221(a)(1)” for “section 1221(1)”. ## § 9510: Vaccine Injury Compensation Trust Fund - § 9510(b)(3): Pub. L. 106–170, § 523(b)(1), repealed Pub. L. 105–277, § 1504(a)(2). See 1998 Amendment note below. - § 9510(c)(1): Pub. L. 106–170, § 523(b)(1), repealed Pub. L. 105–277, § 1504(a)(1). See 1998 Amendment note below. - § 9510(c)(1)(A): Pub. L. 106–170, § 523(b)(2), substituted “December 31, 1999” for “August 5, 1997”.