AMENDMENTS RELATED TO REVENUE RECONCILIATION ACT OF 1990.

SEC. 1702. AMENDMENTS RELATED TO REVENUE RECONCILIATION ACT OF 1990. (a) Amendments Related to Subtitle A.— (1) Subparagraph (B) of section 69(j)(3) is amended by striking “section 1(i)(3)(B)” and inserting “section 1(g)(3)(B)”. (2) Clause (i) of section 151(d)(3)(C) is amended by striking “joint of a return” and inserting “joint return”. (b) Amendments Related to Subtitle B.— (1) Paragraph (1) of section 11212(e) of the Revenue Reconciliation Act of 1990 is amended by striking “Paragraph (1) of section 6724(d)” and inserting “Subparagraph (B) of section 6724(d)(1)”. (2) (A) Subparagraph (B) of section 4093(c)(2), as in effect before the amendments made by the Revenue Reconciliation Act of 1993, is amended by inserting before the period “unless such fuel is sold for exclusive use by a State or any political subdivision thereof”. (B) Paragraph (4) of section 6427(1), as in effect before the amendments made by the Revenue Reconciliation Act of 1993, is amended by inserting before the period “unless such fuel was used by a State or any political subdivision thereof”. (3) Paragraph (1) of section 6416(b) is amended by striking “chapter 32 or by section 4051” and inserting “chapter 31 or 32”. (4) Section 7012 is amended— (A) by striking “production or importation of gasoline” in paragraph (3) and inserting “taxes on gasoline and diesel fuel”, and (B) by striking paragraph (4) and redesignating paragraphs (5) and (6) as paragraphs (4) and (5), respectively. (5) Subsection (c) of section 5041 is amended by striking paragraph (6) and by inserting the following new paragraphs: “(6) Credit for transferee in bond.— If— 110 STAT. 1869 “(A) wine produced by any person would be eligible for any credit under paragraph (1) if removed by such person during the calendar year, “(B) wine produced by such person is removed during such calendar year by any other person (hereafter in this paragraph referred to as the ‘transferee’) to whom such wine was transferred in bond and who is liable for the tax imposed by this section with respect to such wine, and “(C) such producer holds title to such wine at the time of its removal and provides to the transferee such information as is necessary to properly determine the transferee’s credit under this paragraph, then, the transferee (and not the producer) shall be allowed the credit under paragraph (1) which would be allowed to the producer if the wine removed by the transferee had been removed by the producer on that date. “(7) Regulations.— The Secretary may prescribe such regulations as may be necessary to carry out the purposes of this subsection, including regulations— “(A) to prevent the credit provided in this subsection from benefiting any person who produces more than 250,000 wine gallons of wine during a calendar year, and “(B) to assure proper reduction of such credit for persons producing more than 150,000 wine gallons of wine during a calendar year.”. (6) Paragraph (3) of section 5061(b) is amended to read as follows: “(3) section 5041(f),”. (7) Section 5354 is amended by inserting “(taking into account the appropriate amount of credit with respect to such wine under section 5041(c))” after “any one time”. (c) Amendments Related to Subtitle C.— (1) Paragraph (4) of section 56(g) is amended by redesignating subparagraphs (I) and (J) as subparagraphs (H) and (I), respectively. (2) Subparagraph (B) of section 6724(d)(1) is amended— (A) by striking “or” at the end of clause (xii), and (B) by striking the period at the end of clause (xiii) and inserting “, or”. (3) Subsection (g) of section 6302 is amended by inserting “, 22,” after “chapters 21”. (4) The earnings and profits of any insurance company to which section 11305(c)(3) of the Revenue Reconciliation Act of 1990 applies shall be determined without regard to any deduction allowed under such section; except that, for purposes of applying sections 56 and 902, and subpart F of part III of subchapter N of chapter 1 of the Internal Revenue Code of 1986, such deduction shall be taken into account. (5) Subparagraph (D) of section 6038A(e)(4) is amended— (A) by striking “any transaction to which the summons relates” and inserting “any affected taxable year”, and (B) by adding at the end thereof the following new sentence: “For purposes of this subparagraph, the term ‘affected taxable year’ means any taxable year if the determination of the amount of tax imposed for such taxable110 STAT. 1870 year is affected by the treatment of the transaction to which the summons relates.”. (6) Subparagraph (A) of section 6621(c)(2) is amended by adding at the end thereof the following new flush sentence: “The preceding sentence shall be applied without regard to any such letter or notice which is withdrawn by the Secretary.”. (7) Clause (i) of section 6621(c)(2)(B) is amended by striking “this subtitle” and inserting “this title”. (d) Amendments Related to Subtitle D.— (1) Notwithstanding section 11402(c) of the Revenue Reconciliation Act of 1990, the amendment made by section 11402(b)(1) of such Act shall apply to taxable years ending after December 31, 1989. (2) Clause (ii) of section 143(m)(4)(C) is amended— (A) by striking “any month of the 10-year period” and inserting “any year of the 4-year period”, (B) by striking “succeeding months” and inserting “succeeding years”, and (C) by striking “over the remainder of such period (or, if lesser, 5 years)” and inserting “to zero over the succeeding 5 years”. (e) Amendments Related to Subtitle E.— (1) (A) Clause (ii) of section 56(d)(1)(B) is amended to read as follows: “(ii) appropriate adjustments in the application of section 172(b)(2) shall be made to take into account the limitation of subparagraph (A).”. (B) For purposes of applying sections 56(g)(1) and 56(g)(3) of the Internal Revenue Code of 1986 with respect to taxable years beginning in 1991and 1992, the reference in such sections to the alternative tax net operating loss deduction shall be treated as including a reference to the deduction under section 56(h) of such Code as in effect before the amendments made by section 1915 of the Energy Policy Act of 1992. (2) Clause (i) of section 613A(c)(3)(A) is amended by striking “the table contained in”. (3) Section 6501 is amended— (A) by striking subsection (m) (relating to deficiency attributable to election under section 44B) and by redesignating subsections (n) and (o) as subsections (m) and (n), respectively, and (B) by striking “section 40(f) or 51(j)” in subsection (m) (as redesignated by subparagraph (A)) and inserting “section 40(f), 43, or 51(j)”. (4) Subparagraph (C) of section 38(c)(2) (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) is amended by inserting before the period at the end of the first sentence the following: “and without regard to the deduction under section 56(h)”. (5) The amendment made by section 1913(b)(2)(C)(i) of the Energy Policy Act of 1992 shall apply to taxable years beginning after December 31, 1990. (f) Amendments Related to Subtitle F.— (1) (A) Section 2701(a)(3) is amended by adding at the end thereof the following new subparagraph: 110 STAT. 1871 “(C) Valuation of qualified payments where no liquidation, etc. rights.— In the case of an applicable retained interest which is described in subparagraph (B)(i) but not subparagraph (B)(ii), the value of the distribution right shall be determined without regard to this section.”. (B) Section 2701(a)(3)(B) is amended by inserting “certain” before “qualified” in the heading thereof. (C) Sections 2701 (d)(1) and (d)(4) are each amended by striking “subsection (a)(3)(B)” and inserting “subsection (a)(3)(B) or (C)”. (2) Clause (i) of section 2701(a)(4)(B) is amended by inserting “(or, to the extent provided in regulations, the rights as to either income or capital)” after “income and capital”. (3) (A) Section 2701(b)(2) is amended by adding at the end thereof the following new subparagraph: “(C) Applicable family member.— For purposes of this subsection, the term ‘applicable family member’ includes any lineal descendant of any parent of the transferor or the transferor’s spouse.”. (B) Section 2701(e)(3) is amended— (i) by striking subparagraph (B), and (ii) by striking so much of paragraph (3) as precedes “shall be treated as holding” and inserting: “(3) Attribution of indirect holdings and transfers.— An individual”. (C) Section 2704(c)(3) is amended by striking “section 2701(e)(3)(A)” and inserting “section 2701(e)(3)”. (4) Clause (i) of section 2701(c)(1)(B) is amended to read as follows: “(i) a right to distributions with respect to any interest which is junior to the rights of the transferred interest,”. (5) (A) Clause (i) of section 2701(c)(3)(C) is amended to read as follows: “(i) In general.— Payments under any interest held by a transferor which (without regard to this subparagraph) are qualified payments shall be treated as qualified payments unless the transferor elects not to treat such payments as qualified payments. Payments described in the preceding sentence which are held by an applicable family member shall be treated as qualified payments only if such member elects to treat such payments as qualified payments.”. (B) The first sentence of section 2701(c)(3)(C)(ii) is amended to read as follows: “A transferor or applicable family member holding any distribution right which (without regard to this subparagraph) is not a qualified payment may elect to treat such right as a qualified payment, to be paid in the amounts and at the times specified in such election.”. (C) The time for making an election under the second sentence of section 2701(c)(3)(C)(i) of the Internal Revenue Code of 1986 (as amended by subparagraph (A)) shall not expire before the due date (including extensions) for filing the transferor’s return of the tax imposed by section 2501 of such Code for the first calendar year ending after the date of enactment. (6) Section 2701(d)(3)(A)(iii) is amended by striking “the period ending on the date of”. 110 STAT. 1872 (7) Subclause (I) of section 2701(d)(3)(B)(ii) is amended by inserting “or the exclusion under section 2503(b),” after “section 2523,”. (8) Section 2701(e)(5) is amended— (A) by striking “such contribution to capital or such redemption, recapitalization, or other change” in subparagraph (A) and inserting “such transaction”, and (B) by striking “the transfer” in subparagraph (B) and inserting “such transaction”. (9) Section 2701(d)(4) is amended by adding at the end thereof the following new subparagraph: “(C) Transfer to transferors.— In the case of a taxable event described in paragraph (3)(A)(ii) involving a transfer of an applicable retained interest from an applicable family member to a transferor, this subsection shall continue to apply to the transferor during any period the transferor holds such interest.”. (10) Section 2701(e)(6) is amended by inserting “or to reflect the application of subsection (d)” before the period at the end thereof. (11) (A) Section 2702(a)(3)(A) is amended— (i) by striking “to the extent” and inserting “if” in clause (i), (ii) by striking “or” at the end of clause (i), (iii) by striking the period at the end of clause (ii) and inserting “, or”, and (iv) by adding at the end thereof the following new clause: “(iii) to the extent that regulations provide that such transfer is not inconsistent with the purposes of this section.”. (B) (i) Section 2702(a)(3) is amended by striking “incomplete transfer” each place it appears and inserting “incomplete gift”. (ii) The heading for section 2702(a)(3)(B) is amended by striking “Incomplete transfer” and inserting “Incomplete gift”. (g) Amendments Related to Subtitle G.— (1) (A) Subsection (a) of section 1248 is amended— (i) by striking “, or if a United States person receives a distribution from a foreign corporation which, under section 302 or 331, is treated as an exchange of stock” in paragraph (1), and (ii) by adding at the end thereof the following new sentence: “For purposes of this section, a United States person shall be treated as having sold or exchanged any stock if, under any provision of this subtitle, such person is treated as realizing gain from the sale or exchange of such stock.”. (B) Paragraph (1) of section 1248(e) is amended by striking “, or receives a distribution from a domestic corporation which, under section 302 or 331, is treated as an exchange of stock”. (C) Subparagraph (B) of section 1248(f)(1) is amended by striking “or 361(c)(1)” and inserting “355(c)(1), or 361(c)(1)”. (D) Paragraph (1) of section 1248(i) is amended to read as follows: 110 STAT. 1873 “(1) In general.— If any shareholder of a 10-percent corporate shareholder of a foreign corporation exchanges stock of the 10-percent corporate shareholder for stock of the foreign corporation, such 10-percent corporate shareholder shall recognize gain in the same manner as if the stock of the foreign corporation received in such exchange had been— “(A) issued to the 10-percent corporate shareholder, and “(B) then distributed by the 10-percent corporate shareholder to such shareholder in redemption or liquidation (whichever is appropriate). The amount of gain recognized by such 10-percent corporate shareholder under the preceding sentence shall not exceed the amount treated as a dividend under this section.”. (2) Section 897 is amended by striking subsection (f). (3) Paragraph (13) of section 4976(d) is amended by striking “section 408(b)” and inserting “section 408(b)(12)”. (4) Clause (iii) of section 56(g)(4)(D) is amended by inserting “, but only with respect to taxable years beginning after December 31, 1989” before the period at the end thereof. (5) (A) Paragraph (11) of section 11701(a) of the Revenue Reconciliation Act of 1990 (and the amendment made by such paragraph) are hereby repealed, and section 7108(r)(2) of the Revenue Reconciliation Act of 1989 shall be applied as if such paragraph (and amendment) had never been enacted. (B) Subparagraph (A) shall not apply to any building if the owner of such building establishes to the satisfaction of the Secretary of the Treasury or his delegate that such owner reasonably relied on the amendment made by such paragraph (11). (h) Amendments Related to Subtitle H.— (1) (A) Clause (vi) of section 168(e)(3)(B) is amended by striking “or” at the end of subclause (I), by striking the period at the end of subclause (II) and inserting “, or”, and by adding at the end thereof the following new subclause: “(III) is described in section 48(1)(3)(A)(ix) (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).”. (B) Subparagraph (B) of section 168(e)(3) (relating to 5-year property) is amended by adding at the end the following flush sentence: “Nothing in any provision of law shall be construed to treat property as not being described in clause (vi)(I) (or the corresponding provisions of prior law) by reason of being public utility property (within the meaning of section 48(a)(3)).”. (C) Subparagraph (K) of section 168(g)(4) is amended by striking “section 48(a)(3)(A)(iii)” and inserting “section 48(l)(3)(A)(ix) (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990)”. (2) Clause (ii) of section 172(b)(1)(E) is amended by striking “subsection (m)” and inserting “subsection (h)”. (3) Sections 806(a)(4)(E), 832(b)(5)(C)(ii)(II), and 832(b)(5)(D)(ii)(II) are each amended by striking “243(b)(5)” and inserting “243(b)(2)”. (4) Subparagraph (A) of section 243(b)(3) is amended by inserting “of” after “In the case”. 110 STAT. 1874 (5) The subsection heading for subsection (a) of section 280F is amended by striking “Investment Tax credit and”. (6) Clause (i) of section 1504(c)(2)(B) is amended by inserting “section” before “243(b)(2)”. (7) Paragraph (3) of section 341(f) is amended by striking “351, 361, 371(a), or 374(a)” and inserting “351, or 361”. (8) Paragraph (2) of section 243(b) is amended to read as follows: “(2) Affiliated group.— For purposes of this subsection: “(A) In general.— The term ‘affiliated group’ has the meaning given such term by section 1504(a), except that for such purposes sections 1504(b)(2), 1504(b)(4), and 1504(c) shall not apply. “(B) Group must be consistent in foreign tax treatment.— The requirements of paragraph (1)(A) shall not be treated as being met with respect to any dividend received by a corporation if, for any taxable year which includes the day on which such dividend is received— “(i) 1 or more members of the affiliated group referred to in paragraph (1)(A) choose to any extent to take the benefits of section 901, and “(ii) 1 or more other members of such group claim to any extent a deduction for taxes otherwise creditable under section 901.”. (9) The amendment made by section 11813(b)(17) of the Revenue Reconciliation Act of 1990 shall be applied as if the material stricken by such amendment included the closing parenthesis after “section 48(a)(5)”. (10) Paragraph (1) of section 179(d) is amended by striking “in a trade or business” and inserting “a trade or business”. (11) Subparagraph (E) of section 50(a)(2) is amended by striking “section 48(a)(5)(A)” and inserting “section 48(a)(5)”. (12) The amendment made by section 11801(c)(9)(G)(ii) of the Revenue Reconciliation Act of 1990 shall be applied as if it struck “Section 422A(c)(2)” and inserted “Section 422(c)(2)”. (13) Subparagraph (B) of section 424(c)(3) is amended by striking “a qualified stock option, an incentive stock option, an option granted under an employee stock purchase plan, or a restricted stock option” and inserting “an incentive stock option or an option granted under an employee stock purchase plan”. (14) Subparagraph (E) of section 1367(a)(2) is amended by striking “section 613A(c)(l3)(B)” and inserting “section 613A(c)(11)(B)”. (15) Subparagraph (B) of section 460(e)(6) is amended by striking “section 167(k)” and inserting “section 168(e)(2)(A)(ii)”. (16) Subparagraph (C) of section 172(h)(4) is amended by striking “subsection (b)(1)(M)” and inserting “subsection (b)(1)(E)”. (17) Section 6503 is amended— (A) by redesignating the subsection relating to extension in case of certain summonses as subsection (j), and (B) by redesignating the subsection relating to cross references as subsection (k). (18) Paragraph (4) of section 1250(e) is hereby repealed. (19) Paragraph (1) of section 179(d) is amended by adding at the end the following new sentence: “Such term shall not110 STAT. 1875 include any property described in section 50(b) and shall not include air conditioning or heating units.”. “(i) Effective Date.— Except as otherwise expressly provided, any amendment made by this section shall take effect as if included in the provision of the Revenue Reconciliation Act of 1990 to which such amendment relates.”.