EXCLUSION FROM UNRELATED BUSINESS TAX OF GAINS FROM CERTAIN PROPERTY.

SEC. 13147. EXCLUSION FROM UNRELATED BUSINESS TAX OF GAINS FROM CERTAIN PROPERTY. (a) General Rule.— Subsection (b) of section 512 (relating to modifications) is amended by adding at the end thereof the following new paragraph: “(16) (A) Notwithstanding paragraph (5)(B), there shall be excluded all gains or losses from the sale, exchange, or other disposition of any real property described in subparagraph (B) if— “(i) such property was acquired by the organization from— “(I) a financial institution described in section 581 or 591(a) which is in conservatorship or receivership, or 107 STAT. 444 “(II) the conservator or receiver of such an institution (or any government agency or corporation succeeding to the rights or interests of the conservator or receiver), “(ii) such property is designated by the organization within the 9-month period beginning on the date of its acquisition as property held for sale, except that not more than one-half (by value determined as of such date) of property acquired in a single transaction may be so designated, “(iii) such sale, exchange, or disposition occurs before the later of— “(I) the date which is 30 months after the date of the acquisition of such property, or “(II) the date specified by the Secretary in order to assure an orderly disposition of property held by persons described in subparagraph (A), and “(iv) while such property was held by the organization, the aggregate expenditures on improvements and development activities included in the basis of the property are (or were) not in excess of 20 percent of the net selling price of such property. “(B) Property is described in this subparagraph if it is real property which— “(i) was held by the financial institution at the time it entered into conservatorship or receivership, or “(ii) was foreclosure property (as defined in section 514(c)(9)(H)(v)) which secured indebtedness held by the financial institution at such time. For purposes of this subparagraph, real property includes an interest in a mortgage.” (b) Effective Date.— The amendment made by subsection (a) shall apply to property acquired on or after January 1, 1994.