TREATED AS BOOT UNDER SECTION 351.

SEC. 7203. SECURITIES TREATED AS BOOT UNDER SECTION 351. (a) General Rule.—Section 351(a) (relating to nonrecognition in cases of transfers to corporations controlled by transferor) is amended by striking “or securities”. (b) Conforming Amendments.— (1) Subsections (b), (d), and (e)(2) of section 351 are each amended by striking “or securities”. 103 STAT. 2334 (2) Paragraph (2) of section 351(g) is amended by striking “stock, securities, or property” and inserting “stock or property”. (c) Effective Date.— (1) In general.—Except as provided in this subsection, the amendments made by this section shall apply to transfers after October 2, 1989, in taxable years ending after such date. (2) Binding contract.—The amendments made by this section shall not apply to any transfer pursuant to a written binding contract in effect on October 2, 1989, and at all times thereafter before such transfer. (3) Corporate transfers.—In the case of property transferred (directly or indirectly through a partnership or otherwise) by a C corporation, paragraphs (1) and (2) shall be applied by substituting “July 11, 1989” for “October 2, 1989”. The preceding sentence shall not apply where the corporation meets the requirements of section 1504(a)(2) of the Internal Revenue Code of 1986 with respect to the transferee corporation (and where the transfer is not part of a plan pursuant to which the transferor subsequently fails to meet such requirements).