SAFE HARBOR FOR TIMBER PROPERTY.

SEC. 15315. SAFE HARBOR FOR TIMBER PROPERTY.(a) In General.—Section 857(b)(6) (relating to income from prohibited transactions) is amended by adding at the end the following new subparagraph:“(G) Special rules for sales to qualified organizations.—“(i) In general.—In the case of the sale of a real estate asset (as defined in section 856(c)(5)(B)) to a qualified organization (as defined in section 170(h)(3)) exclusively for conservation purposes (within the meaning of section 170(h)(1)(C)), subparagraph (D) shall be applied—“(I) by substituting ‘2 years’ for ‘4 years’ in clause (i), and122 STAT. 1505“(II) by substituting ‘2-year period’ for ‘4-year period’ in clauses (ii) and (iii).“(ii) Termination.—This subparagraph shall not apply to sales after the termination date.”.(b) Prohibited Transactions.—Section 857(b)(6)(D)(v) is amended by inserting “, or, in the case of a sale on or before the termination date, a taxable REIT subsidiary” after “any income”.(c) Sales That Are Not Prohibited Transactions.—Section 857(b)(6), as amended by subsection (a), is amended by adding at the end the following new subparagraph:“(H) Sales of property that are not a prohibited transaction.—In the case of a sale on or before the termination date, the sale of property which is not a prohibited transaction through the application of subparagraph (D) shall be considered property held for investment or for use in a trade or business and not property described in section 1221(a)(1) for all purposes of this subtitle.”.(d) Termination Date.—Section 857(b)(6), as amended by subsections (a) and (c), is amended by adding at the end the following new subparagraph:“(I) Termination date.—For purposes of this paragraph, the term ‘termination date’ has the meaning given such term by section 856(c)(8).”.(e) Effective Date.—The amendments made by this section shall apply to dispositions in taxable years beginning after the date of the enactment of this Act.