I
103D CONGRESS
1ST SESSION
H. R. 545
To amend the Internal Revenue Code of 1986 to provide that the provision
enacted as part of the Energy Policy Act of 1992 requiring the recogni-
tion of precontribution gain in the case of certain partnership distribu-
tions to a contributing partner shall be fully prospective, and for other
purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 21, 1993
Mr. TORRICELLI introduced the following bill; which was referred to the
Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to provide
that the provision enacted as part of the Energy Policy
Act of 1992 requiring the recognition of precontribution
gain in the case of certain partnership distributions to
a contributing partner shall be fully prospective, and
for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. MODIFICATION OF RULES REQUIRING REC-
OGNITION OF PRECONTRIBUTION GAIN IN
CASE OF CERTAIN PARTNERSHIP DISTRIBU-
TIONS TO CONTRIBUTING PARTNER.
(a) PROVISION TO BE PROSPECTIVE.—Subsection
(c) of section 1937 of the Energy Policy Act of 1992 is
amended by striking ‘‘distributions’’ and inserting ‘‘Prop-
erty contributed to a partnership’’.
(b) PRECONTRIBUTION GAIN DETERMINED WITH-
OUT NETTING LOSSES.—
(1) Subsection (b) of section 737 of such Code
is amended by striking ‘‘net gain’’ and inserting
‘‘gain’’.
(2) Subsections (a) and (b) of section 737 of
such Code are each amended by striking ‘‘net
precontribution gain’’ each place it appears and in-
serting ‘‘precontribution gain’’.
(c) INTEREST CHARGE.—Section 737 of such Code
is amended by adding at the end thereof the following new
subsection:
‘‘(e) INTEREST CHARGE IMPOSED ON GAIN RECOG-
NIZED.—
‘‘(1) IN GENERAL.—If any portion of the gain
recognized under subsection (a) for any taxable year
is attributable to property contributed prior to such
taxable year, the taxpayer’s tax imposed by this
chapter for such taxable year shall be increased by
the aggregate of the additional amounts determined
under paragraph (2) with respect to each such prop-
erty.
‘‘(2) ADDITIONAL AMOUNT.—For purposes of
paragraph (1), the additional amount with respect to
any property shall be equal to the aggregate amount
of interest (determined at the rate applicable under
section 6621(a)(2) for the month with or within
which any taxable year ends) that would accrue—
‘‘(A) on an amount equal to the deferred
tax liability for the taxable year which is attrib-
utable to such property,
‘‘(B) during the period—
‘‘(i) ending on the due date for filing
the return for such taxable year (deter-
mined without regard to extensions), and
‘‘(ii) beginning on the due date for fil-
ing the return for the taxable year (deter-
mined without regard to extensions) of the
taxpayer during which the property was
contributed.
‘‘(3) DEFERRED TAX LIABILITY.—For purposes
of paragraph (2), the term ‘deferred tax liability’
means, with respect to any property, the product
of—
‘‘(A) the amount of gain recognized under
subsection (a) with respect to such property,
and
‘‘(B) the maximum rate of tax in effect
under section 1 or 11, whichever is appropriate,
for the taxable year of the taxpayer during
which such property was contributed.
‘‘(4) SPECIAL
RULE.—Any increase in tax
under subsection shall not be treated as a tax im-
posed by this chapter for purposes of—
‘‘(A) determining the amount of any credit
allowable under this chapter, and
‘‘(B) determining the amount of the tax
imposed by section 55.’’
(d) EFFECTIVE DATE.—The amendments made by
this section shall take effect as if included in the amend-
ments made by section 1937 of the Energy Policy Act of
1992 on the date of the enactment of such Act.
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