CERTAIN UNIT INVESTMENT TRUSTS.

SEC. 908. CERTAIN UNIT INVESTMENT TRUSTS. (a) Not To Be Treated as Separate Taxpayer.—Section 851 (relating to definition of regulated investment company) is amended by adding at the end thereof the following new subsection: “(f) Certain Unit Investment Trusts.—For purposes of this title— “(1) A unit investment trust (as defined in the Investment Company Act of 1940)— “(A) which is registered under such Act and issues periodic payment plan certificates (as defined in such Act) in one or more series, “(B) substantially all of the assets of which, as to all such series, consist of (i) securities issued by a single management company (as defined in such Act) and securities acquired pursuant to subparagraph (C), or (ii) securities issued by a single other corporation, and “(C) which has no power to invest in any other securities except securities issued by a single other management company, when permitted by such Act or the rules and regulations of the Securities and Exchange Commission, shall not be treated as a person. “(2) In the case of a unit investment trust described in paragraph (1)— “(A) each holder of an interest in such trust shall, to the extent of such interest, be treated as owning a proportionate share of the assets of such trust; 83 Stat. 718 “(B) the basis of the assets of such trust which are treated under subparagraph (A) as being owned by a holder of an interest in such trust shall be the same as the basis of his interest in such trust; and “(C) in determining the period for which the holder of an interest in such trust has held the assets of the trust which are treated under subparagraph (A) as being owned by him, there shall be included the period for which such holder has held his interest in such trust. This subsection shall not apply in the case of a unit investment trust which is a segregated asset account under the insurance laws or regulations of a State.” (b) Effective Date.—The amendment made by subsection (a) shall apply to taxable years of unit investment trusts ending after December 31, 1968, and to taxable years of holders of interests in such trusts ending with or within such taxable years of such trusts. The enactment of this section shall not be construed to result in the realization of gain or loss by any unit investment trust or by any holder of an interest in a unit investment trust.