AMENDMENTS RELATED TO INTERNAL REVENUE SERVICE RESTRUCTURING AND REFORM ACT OF 1998.

SEC. 4002. AMENDMENTS RELATED TO INTERNAL REVENUE SERVICE RESTRUCTURING AND REFORM ACT OF 1998. (a) Amendment Related to Section 1101 of 1998 Act.—Paragraph (5) of section 6103(h) of the 1986 Code, as added by section 1101(b) of the 1998 Act, is redesignated as paragraph (6). (b) Amendment Related to Section 3001 of 1998 Act.—Paragraph (2) of section 7491(a) of the 1986 Code is amended by adding at the end the following flush sentence: “Subparagraph (C) shall not apply to any qualified revocable trust (as defined in section 645(b)(1)) with respect to liability for tax for any taxable year ending after the date of the decedent’s death and before the applicable date (as defined in section 645(b)(2)).”. (c) Amendments Related to Section 3201 of 1998 Act.— (1) Section 7421(a) of the 1986 Code is amended by striking “6015(d)” and inserting “6015(e)”. (2) Subparagraph (A) of section 6015(e)(3) is amended by striking “of this section” and inserting “of subsection (b) or (f)” (d) Amendment Related to Section 3301 of 1998 Act.—Paragraph (2) of section 3301(c) of the 1998 Act is amended by striking “The amendments” and inserting “Subject to any applicable 112 STAT. 2681–907statute of limitation not having expired with regard to either a tax underpayment or a tax overpayment, the amendments”. (e) Amendment Related to Section 3401 of 1998 Act.—Section 3401(c) of the 1998 Act is amended— (1) in paragraph (1), by striking “7443(b)” and inserting “7443A(b)”; and (2) in paragraph (2), by striking “7443(c)” and inserting “7443A(c)”. (f) Amendment Related to Section 3433 of 1998 Act.—Section 7421(a) of the 1986 Code is amended by inserting “6331(i),” after “6246(b)””. (g) Amendment Related to Section 3467 of 1998 Act.—The subsection (d) of section 6159 of the 1986 Code relating to cross reference is redesignated as subsection (e). (h) Amendment Related to Section 3708 of 1998 Act.—Subparagraph (A) of section 6103(p)(3) of the 1986 Code is amended by inserting “(f)(5),” after “(c), (e),”. (i) Amendments Related to Section 5001 of 1998 Act.— (1) Subparagraph (B) of section 1(h)(13) of the 1986 Code is amended by striking “paragraph (7)(A)” and inserting “paragraph (7)(A)(i)”. (2)(A) Subparagraphs (A)(i)(II), (A)(ii)(II), and (B)(ii) of section 1(h)(13) of the 1986 Code shall not apply to any distribution after December 31, 1997, by a regulated investment company or a real estate investment trust with respect to— (i) gains and losses recognized directly by such company or trust, and (ii) amounts properly taken into account by such company or trust by reason of holding (directly or indirectly) an interest in another such company or trust to the extent that such subparagraphs did not apply to such other company or trust with respect to such amounts. (B) Subparagraph (A) shall not apply to any distribution which is treated under section 852(b)(7) or 857(b)(8) of the 1986 Code as received on December 31,1997. (C) For purposes of subparagraph (A), any amount which is includible in gross income of its shareholders under section 852(b)(3)(D) or 857(b)(3)(D) of the 1986 Code after December 31, 1997, shall be treated as distributed after such date. (D)(i) For purposes of subparagraph (A), in the case of a qualified partnership with respect to which a regulated investment company meets the holding requirement of clause (iii)— (I) the subparagraphs referred to in subparagraph (A) shall not apply to gains and losses recognized directly by such partnership for purposes of determining such company’s distributive share of such gains and losses, and (II) such company’s distributive share of such gains and losses (as so determined) shall be treated as recognized directly by such company. The preceding sentence shall apply only if the qualified partnership provides the company with written documentation of such distributive share as so determined. (ii) For purposes of clause (i), the term “qualified partnership” means, with respect to a regulated investment company, any partnership if— (I) the partnership is an investment company registered under the Investment Company Act of 1940,112 STAT. 2681–908 (II) the regulated investment company is permitted to invest in such partnership by reason of section 12(d)(1)(E) of such Act or an exemptive order of the Securities and Exchange Commission under such section, and (III) the regulated investment company and the partnership have the same taxable year. (iii) A regulated investment company meets the holding requirement of this clause with respect to a qualified partnership if (as of January 1, 1998)— (I) the value of the interests of the regulated investment company in such partnership is 35 percent or more of the value of such company’s total assets, or (II) the value of the interests of the regulated investment company in such partnership and all other qualified partnerships is 90 percent or more of the value of such company’s total assets. (3) Paragraph (13) of section 1(h) of the 1986 Code is amended by adding at the end the following new subparagraph: “(D) Charitable remainder trusts.—Subparagraphs (A) and (B)(ii) shall not apply to any capital gain distribution made by a trust described in section 664.” (j) Amendment Related to Section 7004 of 1998 Act.—Clause (i) of section 408A(c)(3)(C) of the 1986 Code, as amended by section 7004 of the 1998 Act, is amended by striking the period at the end of subclause (II) and inserting “, and”. (k) Effective Date.—The amendments made by this section shall take effect as if included in the provisions of the 1998 Act to which they relate.