Recission of a water's edge election

1. The water's edge election of a corporation that has had more than fifty percent of its voting stock acquired by a nonaffiliated corporation is rescinded. 2. The water's edge election of a corporation formed due to a reorganization or spinoff from an existing taxpayer is rescinded if, after such reorganization or spinoff, it is no longer an affiliated member of the water's edge group. 3. The water's edge election of a corporation that is completely liquidated is rescinded. The election does not carry over to a corporation receiving the liquidated assets. This provision does not affect the water's edge election made by any corporation that receives liquidated assets.