include any contract’’ and inserting ‘‘A taxpayer 
shall not be treated as having made a constructive 
sale solely because the taxpayer enters into a con-
tract’’. 
(2) Subparagraphs (A) and (B)(i) of section 
1259(c)(3) are each amended by striking ‘‘be treated 
as a constructive sale’’ and inserting ‘‘cause a con-
structive sale’’. 
(3) Clause (i) of section 1259(c)(3)(A) is 
amended by striking ‘‘before the end of’’ and insert-
ing ‘‘on or before’’. 
(4) Clause (ii) of section 1259(c)(3)(B) is 
amended by striking ‘‘substantially similar’’. 
(5) Subclause (I) of section 1259(c)(3)(B)(ii) is 
amended to read as follows: 
‘‘(I) which would (but for this 
subparagraph) cause the requirement 
of subparagraph (A)(iii) not to be met 
with respect to the transaction de-
scribed in clause (i) of this subpara-
graph,’’. 
(6) Subclause (II) of such section is amended 
by inserting ‘‘on or’’ before ‘‘before the 30th day’’. 
(7) The heading for subparagraph (B) of sec-
tion 1259(c)(3) is amended by striking ‘‘POSITIONS
WHICH ARE REESTABLISHED’’ and inserting ‘‘CER-
TAIN CLOSED TRANSACTIONS WHERE RISK OF LOSS 
ON
APPRECIATED
FINANCIAL
POSITION
DIMIN-
ISHED’’. 
(d) AMENDMENTS RELATED TO SECTION 1015 OF 
THE ACT.—
(1) Section 246(c)(1)(A) is amended by striking 
‘‘90-day period’’ and inserting ‘‘91-day period’’. 
(2) Section 246(c)(2)(B) is amended—
(A) by striking ‘‘180-day period’’ and in-
serting ‘‘181-day period’’, and 
(B) by striking ‘‘90-day period’’ and in-
serting ‘‘91-day period’’. 
(e) AMENDMENT RELATED TO SECTION 1031 OF 
THE ACT.—Section 4261(e)(4) is amended by adding at 
the end the following new subparagraph: 
‘‘(D) SPECIAL RULE FOR AMOUNTS PAID 
FOR DOMESTIC SEGMENTS BEGINNING AFTER 
2002.—If an amount is paid during a calendar 
year for a domestic segment beginning in a 
later calendar year, then the rate of tax under 
subsection (b) on such amount shall be the rate 
in effect for the calendar year in which such 
amount is paid.’’
(f) AMENDMENTS RELATED TO SECTION 1053 OF 
THE ACT.—
(1) Section 901(k)(1)(A)(i) is amended by 
striking ‘‘30-day period’’ and inserting ‘‘31-day pe-
riod’’. 
(2) Section 901(k)(3)(B) is amended—
(A) by striking ‘‘90-day period’’ and in-
serting ‘‘91-day period’’, and 
(B) by striking ‘‘30-day period’’ and in-
serting ‘‘31-day period’’. 
(g) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall take effect as if included in the provisions of 
the Taxpayer Relief Act of 1997 to which they re-
late. 
(2) 
AMENDMENTS
RELATED
TO
SECTION 
1031.—The amendment made by subsection (e) shall 
apply to segments beginning after December 31, 
2002.
SEC. 8. AMENDMENT RELATED TO SMALL BUSINESS JOB 
PROTECTION ACT OF 1996. 
(a) AMENDMENT RELATED TO SECTION 1307.—Sub-
section (b) of section 1377 (relating to post-termination
transition period) is amended by adding at the end the 
following new paragraph: 
‘‘(3) SPECIAL
RULES
FOR
AUDIT
RELATED 
POST-TERMINATION TRANSITION PERIODS.—
‘‘(A) NO APPLICATION TO CARRYOVERS.—
Paragraph (1)(B) shall not apply for purposes 
of section 1366(d)(3). 
‘‘(B) LIMITATION ON APPLICATION TO DIS-
TRIBUTIONS.—Paragraph (1)(B) shall apply to 
a distribution described in section 1371(e) only 
to the extent that the amount of such distribu-
tion does not exceed the aggregate increase (if 
any) in the accumulated adjustments account 
(within the meaning of section 1368(e)) by rea-
son of the adjustments referred to in such para-
graph.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall take effect as if included in section 1307 
of the Small Business Job Protection Act of 1996. 
SEC. 9. CLERICAL AMENDMENTS. 
(a) Subclause (II) of section 1(g)(7)(B)(ii) is amend-
ed by striking ‘‘10 percent.’’ and inserting ‘‘10 percent’’. 
(b) Section 1(h)(6)(A)(ii) is amended—
(1) in subclause (I), by striking ‘‘(5)(B)’’ and 
inserting ‘‘(4)(B)’’, and