EXCISE TAX.

SEC. 1605. EXCISE TAX. (a) Imposition of Tax.— Subtitle D (relating to miscellaneous excise taxes) is amended by adding at the end thereof the following new chapter: “CHAPTER 44— REAL ESTATE INVESTMENT TRUSTS “Sec. 4981. Excise tax based on certain real estate investment trust taxable income not distributed during the taxable year. “SEC. 4981. EXCISE TAX BASED ON CERTAIN REAL ESTATE INVESTMENT TRUST TAXABLE INCOME NOT DISTRIBUTED DURING THE TAXABLE YEAR. “Effective with respect to taxable years beginning after December 31, 1979, there is hereby imposed on each real estate investment trust for the taxable year a tax equal to 3 percent of the amount (if any) by which 75 percent of the real estate investment trust taxable income (as defined in section 857(b)(2), but determined without regard to section 857 (b)(2)(B), and by excluding any net capital gain for the taxable year) exceeds the amount of the dividends paid deduction (as defined in section 561, but computed without regard to capital gains dividends as defined in section 857(b)(3)(C) and without regard to any dividend paid after the close of the taxable year) for the taxable year. For purposes of the preceding sentence, the determination of the real estate investment trust taxable income shall be made by taking into account only the amount and character of the items of income and deduction as reported by such trust in its return for the taxable year.” (b) Technical Amendments.— (1) Paragraph (6) of section 275(a) (relating to denial of deduction for certain taxes) is amended by striking out “and chapter 43.” and inserting in lieu thereof “, chapter 43, and chapter 44.” (2) Section 857 (relating to taxation of real estate investment trusts and their beneficiaries) is amended by adding at the end thereof the following new subsection: “(e) Cross Reference.— “For provisions relating to excise tax based on certain real estate investment trust taxable income not distributed during the taxable year, see section 4981.” (3) Section 6161(b)(1) relating to extensions of time for payment of tax), as amended by this Act, is amended by striking out “42 or 43” and inserting in lieu thereof “42, 43, or 44”. The second sentence of section 6161 (b) is amended by striking out “or chapter 43” and inserting in lieu thereof “43, or 44”. (4) Section 6211 (defining deficiency) is amended— (A) by striking out “and 43” in subsection (a) and inserting in lieu thereof “43, and 44”, (B) by striking out “or 43” in subsection (a) and inserting in lieu thereof “43, or 44”, and (C) by striking out “or 43” in subsection (b)(2) and inserting in lieu thereof “43, or 44”. (5) Section 6212 (relating to notice of deficiency) is amended— (A) by striking out “or 43” in subsection (a) and inserting in lieu thereof “43, or 44”, 90 STAT. 1755 (B) by striking out “or chapter 43” in subsection (b)(1) and inserting in lieu thereof “chapter 43, or chapter 44”, (C) by striking out “chapter 43, and this chapter” in subsection (b)(1) anti inserting in lieu thereof “chapter 43, chapter 44, and this chapter”, and (D) by striking out “of chapter 43 tax for the same taxable years,” in subsection (c)(1) and inserting in lieu thereof “of chapter 43 tax for the same taxable years, of chapter 44 tax for the same taxable years,”. (6) Section 6213(a) (relating to restrictions applicable to deficiencies and petition to Tax Court) is amended by striking out “or 43” and inserting in lieu thereof “43, or 44”. (7) Section 6214 (relating to determinations by Tax Court) is amended— (A) by striking out “or 43” in the heading of subsection (c) and inserting in lieu thereof “43, or 44”, and (B) by striking out “or 43” each place it appears in subsection (c) and inserting in lieu thereof “43, or 44”, and (C) by striking out “or 43” hi subsection (d) and inserting in lieu thereof “43, or 44”. (8) Section 6344(a)(1) (relating to cross references) is amended by striking out “or 43” and inserting in lieu thereof “43, or 44”, (9) Section 6512 (relating to limitations in case of petition to Tax Court) is amended by sticking out “or 43” each place it appears and inserting in lieu thereof “43, or 44”. (10) Section 6601 (c) (relating to suspension of interest in certain income, etc. tax cases) is amended by striking out in the heading thereof “or 43” and inserting in lieu thereof “43. or 44”. (11) Section 7422 (relating to civil actions for refund) is amended by striking out “or 43” in subsection (e) and inserting in lieu thereof “43, or 44”. (c) Clerical Amendment.— The table of chapters for subtitle D is amended by adding at the end thereof the following: “Chapter 44. Real estate Investment trusts.”