AMENDMENTS RELATED TO TECHNICAL AND MISCELLANEOUS REVENUE ACT OF 1988.

SEC. 11702. AMENDMENTS RELATED TO TECHNICAL AND MISCELLANEOUS REVENUE ACT OF 1988. (a) Amendments Related to Section 1006.— (1) Paragraph (5) of section 367(a) is amended by striking “section 361” and inserting “subsection (a) or (b) of section 361”. (2) Subsection (d) of section 453B is amended to read as follows: “(d) Exception for Distributions to Which Section 337(a) Applies.— Subsection (a) shall not apply to any distribution to which section 337(a) applies.” (b) Amendments Related to Section 1008.— (1) Subparagraph (B) of section 447(g)(4) is amended to read as follows: “(B) Qualified farming trade or business.— “(i) In general.— The term ‘qualified farming trade or business’ means the trade or business of farming— “(I) sugar cane, “(II) any plant with a preproductive period (as defined in section 263A(e)(3)) of 2 years or less, and “(III) any other plant (other than any citrus or almond tree) if an election by the corporation under this subparagraph is in effect. In the case of a partnership and for purposes of paragraph (3)(A), subclauses (II) and (III) shall not apply. “(ii) Effect of election.— For purposes of paragraphs (1) and (2) of section 263A(e), any election under this subparagraph shall be treated as if it were an election under subsection (d)(3) of section 263A. “(iii) Election.— Unless the Secretary otherwise consents, an election under this subparagraph may be made only for the corporation’s 1st taxable year which begins after December 31, 1986, and during which the corporation engages in a farming business. Any such election, once made, may be revoked only with the consent of the Secretary.” (2) Subparagraph (A) of section 447(g)(1) is amended by striking “qualified farming trade or business” and inserting “trade or business of farming”. (c) Amendment Related to Section 1012.— Subsection (b) of section 6114 is amended by striking “by regulations”. (d) Amendments Related to Section 1014.— (1) Subparagraph (B) of section 59(j)(1) is amended by inserting “(or, if greater, the child’s share of the unused parental minimum tax exemption)” before the period at the end thereof. (2) Subsection (j) of section 59 is amended by adding at the end thereof the following new paragraph: “(3) Unused parental minimum tax exemption.— “(A) In general.— For purposes of this subsection, the term ‘unused parental minimum tax exemption’ means the excess (if any) of— “(i) the exemption amount applicable to the parent under section 55(d), over “(ii) the parent’s alternative minimum taxable income. “(B) Certain rules made applicable.— A child’s share of any unused parental minimum tax exemption shall be 104 STAT. 1388–515determined under rules similar to the rules of section l(i)(3)(B), and rules similar to the rules of paragraphs (3)(D) and (5) of section l(i) shall apply for purposes of this paragraph.” (3) Subparagraph (D) of section 59(j)(2), is amended by striking “paragraphs (5) and (6)” and inserting “paragraphs (3)(D), (5), and (6)”. (e) Amendments Related to Section 1018.— (1) Subsection (e) of section 468B is amended by striking “This section” and inserting “This section (other than subsection (g))”. (2) Subsection (c) of section 355 is amended to read as follows: “(c) Taxability of Corporation on Distribution.— “(1) In general.— Except as provided in paragraph (2), no gain or loss shall be recognized to a corporation on any distribution to which this section (or so much of section 356 as relates to this section) applies and which is not in pursuance of a plan of reorganization. “(2) Distribution of appreciated property.— “(A) In general.— If— “(i) in a distribution referred to in paragraph (1), the corporation distributes property other than stock or securities in the controlled corporation, and “(ii) the fair market value of such property exceeds its adjusted basis (in the hands of the distributing corporation), then gain shall be recognized to the distributing corporation as if such property were sold to the distribute at its fair market value. “(B) Treatment of liabilities.— If any property distributed in the distribution referred to in paragraph (1) is subject to a liability or the shareholder assumes a liability of the distributing corporation in connection with the distribution, then, for purposes of subparagraph (A), the fair market value of such property shall be treated as not less than the amount of such liability. “(3) Coordination with sections 311 and 336(a).— Sections 311 and 336(a) shall not apply to any distribution referred to in paragraph (1).” (f) Amendment Related to Section 3011.— Paragraph (1) of section 49808(d) is amended to read as follows: “(1) any failure of a group health plan to meet the requirements of subsection (f) with respect to any qualified beneficiary if the qualifying event with respect to such beneficiary occurred during the calendar year immediately following a calendar year during which all employers maintaining such plan normally employed fewer than 20 employees on a typical business day,”. (g) Amendments Related to Section 5033.— (1) Subsection (i) of section 2523 is amended by adding at the end thereof the following new sentence: “This subsection shall not apply to any transfer resulting from the acquisition of rights under a joint and survivor annuity described in subsection (f)(6).” (2) (A) Paragraph (1) of section 2056A(a) is amended to read as follows: “(1) the trust instrument— 104 STAT. 1388–516 “(A) requires that at least 1 trustee of the trust be an individual citizen of the United States or a domestic corporation, and “(B) provides that no distribution (other than a distribution of income) may be made from the trust unless a trustee who is an individual citizen of the United States or a domestic corporation has the right to withhold from such distribution the tax imposed by this section on such distribution,”. (B) Subsection (b) of section 2056A is amended by adding at the end thereof the following new paragraphs: “(14) Coordination with terminable interest rules.— Any interest in a qualified domestic trust shall not be treated as failing to meet the requirements of paragraph (5) or (7) of section 2056(b) merely by reason of any provision of the trust instrument permitting the withholding from any distribution of an amount to pay the tax imposed by paragraph (1) on such distribution. “(15) No tax on certain distributions.— No tax shall be imposed by paragraph (1) on any distribution to the surviving spouse to the extent such distribution is to reimburse such surviving spouse for any tax imposed by subtitle A on any item of income of the trust to which such surviving spouse is not entitled under the terms of the trust.” (3) (A) Subsection (d) of section 2056A is amended by adding at the end thereof the following new sentence: “No election may be made under this section on any return if such return is filed more than one year after the time prescribed by law (including extensions) for filing such return.” (B) The amendment made by subparagraph (A) shall not apply to any election made before the date 6 months after the date of the enactment of this Act. (4) Subparagraph (A) of section 2056A(b)(10) is amended by striking “section 2032” and inserting “section 2011, 2014, 2032”. (5) Paragraph (3) of section 2056(d) is amended by striking “section 2056A(b)(6)” and inserting “section 2056A(b)(7)”- (h) Amendments Related to Section 6009.— (1) Subparagraph (B) of section 135(b)(2) is amended by striking “each dollar amount” and inserting “the $40,000 and $60,000 amounts”. (2) Subparagraph (O of section 135(b)(2) is amended by striking “(A) or”. (i) Amendments Related to Section 6282.— Subsection (e) of section 216 is amended— (1) by striking “Associations” in the subsection heading and inserting “Corporations”, and (2) by striking “association” and inserting “corporation”. (j) Effective Date.— Any amendment made by this section shall take effect as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988 to which such amendment relates.