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lieu of paragraph (1), such person shall make depos-
its of such taxes for—
‘‘(A) the second semimonthly period in Au-
gust, and
‘‘(B) the period beginning on September 1
and ending on September 11,
not later than September 29.
‘‘(3) TAXPAYERS NOT REQUIRED TO USE ELEC-
TRONIC FUNDS TRANSFER.—In the case of deposits
not required to be made by electronic funds transfer,
paragraphs (1) and (2) shall be applied by substitut-
ing ‘September 25’ for ‘September 26’, ‘September
10’ for ‘September 11’, and ‘September 28’ for ‘Sep-
tember 29’.
‘‘(4) SPECIAL RULE WHERE DUE DATE ON SAT-
URDAY OR SUNDAY.—If, but for this paragraph, the
due date under paragraph (1), (2), or (3) would fall
on a Saturday or Sunday, such due date shall be
deemed to be—
‘‘(A) in the case of Saturday, the preceding
day, and
‘‘(B) in the case of Sunday, the following
day.’’
(b) TAXES
ON DISTILLED SPIRITS, WINES, AND
BEER.—
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(1) Subsection (d) of section 5061 is amended
by redesignating paragraph (4) as paragraph (5)
and by inserting after paragraph (3) the following
new paragraph:
‘‘(4) SPECIAL RULE FOR TAX DUE IN SEPTEM-
BER.—
‘‘(A) IN
GENERAL.—Notwithstanding the
preceding provisions of this subsection, the
taxes on distilled spirits, wines, and beer for the
period beginning on September 16 and ending
on September 26 shall be paid not later than
September 29.
‘‘(B) SAFE HARBOR.—The requirement of
subparagraph (A) shall be treated as met if the
amount paid not later than September 29 is not
less than 11⁄15 of the taxes on distilled spirits,
wines, and beer for the period beginning on
September 1 and ending on September 15.
‘‘(C) TAXPAYERS NOT REQUIRED TO USE
ELECTRONIC FUNDS TRANSFER.—In the case of
payments not required to be made by electronic
funds transfer, subparagraphs (A) and (B)
shall be applied by substituting ‘September 25’
for ‘September 26’, ‘September 28’ for ‘Sep-
tember 29’, and ‘2⁄3’ for ‘11⁄15’.’’
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(2) Section 5061(d)(5), as redesignated by
paragraph (1), is amended—
(A) by inserting ‘‘(or the immediately fol-
lowing day where the due date described in
paragraph (4) falls on a Sunday)’’ before the
period at the end, and
(B) by striking ‘‘14TH DAY’’ in the heading
and inserting ‘‘DUE DATE’’.
(c) TOBACCO PRODUCTS AND CIGARETTE PAPERS
AND TUBES.—
(1) Paragraph (2) of section 5703(b) is amend-
ed by redesignating subparagraph (D) as subpara-
graph (E) and by inserting after subparagraph (C)
the following new subparagraph:
‘‘(D) SPECIAL RULE FOR TAX DUE IN SEP-
TEMBER.—
‘‘(i) IN
GENERAL.—Notwithstanding
the preceding provisions of this paragraph,
the taxes on tobacco products and cigarette
papers and tubes for the period beginning
on September 16 and ending on September
26 shall be paid not later than September
29.
‘‘(ii) SAFE
HARBOR.—The require-
ment of clause (i) shall be treated as met
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if the amount paid not later than Septem-
ber 29 is not less than 11⁄15 of the taxes
on tobacco products and cigarette papers
and tubes for the period beginning on Sep-
tember 1 and ending on September 15.
‘‘(iii) TAXPAYERS NOT REQUIRED TO
USE
ELECTRONIC
FUNDS
TRANSFER.—In
the case of payments not required to be
made by electronic funds transfer, clauses
(i) and (ii) shall be applied by substituting
‘September 25’ for ‘September 26’, ‘Sep-
tember 28’ for ‘September 29’, and ‘2⁄3’ for
‘11⁄15’.’’
(2) Section 5703(b)(2)(E), as redesignated by
paragraph (1), is amended—
(A) by inserting ‘‘(or the immediately fol-
lowing day where the due date described in sub-
paragraph (D) falls on a Sunday)’’ before the
period at the end, and
(B) by striking ‘‘14TH DAY’’ in the heading
and inserting ‘‘DUE DATE’’.
(d) COMMUNICATION SERVICES AND AIRLINE TICK-
ETS.—Subsection (e) of section 6302 is amended to read
as follows:
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‘‘(e) TIME FOR DEPOSIT OF TAXES ON COMMUNICA-
TIONS SERVICES AND AIRLINE TICKETS.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), if, under regulations prescribed by the
Secretary, a person is required to make deposits of
any tax imposed by section 4251 or subsection (a)
or (b) of section 4261 with respect to amounts con-
sidered collected by such person during any semi-
monthly period, such deposit shall be made not later
than the 3rd day (not including Saturdays, Sundays,
or legal holidays) after the close of the 1st week of
the 2nd semimonthly period following the period to
which such amounts relate.
‘‘(2) SPECIAL RULE FOR TAX DUE IN SEPTEM-
BER.—
‘‘(A) 
AMOUNTS
CONSIDERED
COL-
LECTED.—In the case of a person required to
make deposits of the tax imposed by—
‘‘(i) section 4251, or
‘‘(ii) effective on January 1, 1997,
section 4261 or 4271,
with respect to amounts considered collected by
such person during any semimonthly period, the
amount of such tax included in bills rendered or
tickets sold during the period beginning on Sep-
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tember 1 and ending on September 11 shall be
deposited not later than September 29.
‘‘(B) SPECIAL RULE WHERE SEPTEMBER
29 IS ON SATURDAY OR SUNDAY.—If September
29 falls on a Saturday or Sunday, the due date
under subparagraph (A) shall be—
‘‘(i) in the case of Saturday, the pre-
ceding day, and
‘‘(ii) in the case of Sunday, the follow-
ing day.
‘‘(C) TAXPAYERS NOT REQUIRED TO USE
ELECTRONIC FUNDS TRANSFER.—In the case of
deposits not required to be made by electronic
funds transfer, subparagraphs (A) and (B)
shall be applied by substituting ‘September 10’
for ‘September 11’ and ‘September 28’ for
‘September 29’.’’
(e) EFFECTIVE DATE.—The amendments made by
this section shall take effect on January 1, 1995.
SEC. 713. REDUCTION IN RATE OF INTEREST PAID ON CER-
TAIN CORPORATE OVERPAYMENTS.
(a) IN GENERAL.—Paragraph (1) of section 6621(a)
(defining overpayment rate) is amended by adding at the
end the following new flush sentence:
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‘‘To the extent that an overpayment of tax by a cor-
poration for any taxable period (as defined in sub-
section (c)(3)) exceeds $10,000, subparagraph (B)
shall be applied by substituting ‘0.5 percentage
point’ for ‘2 percentage points’.’’
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply for purposes of determining inter-
est for periods after December 31, 1994.
Subtitle C—Earned Income Tax
Credit
SEC. 721. EXTENSION OF EARNED INCOME TAX CREDIT TO
MILITARY PERSONNEL STATIONED OUTSIDE
THE UNITED STATES.
(a) IN GENERAL.—Subsection (c) of section 32 (re-
lating to earned income credit) is amended by adding at
the end the following new paragraph:
‘‘(4) TREATMENT
OF
MILITARY
PERSONNEL
STATIONED
OUTSIDE
THE
UNITED
STATES.—For
purposes of paragraphs (1)(A)(ii)(I) and (3)(E), the
principal place of abode of a member of the Armed
Forces of the United States shall be treated as in
the United States during any period during which
such member is stationed outside the United States
while serving on extended active duty (as defined in
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section 1034(h)(3)) with the Armed Forces of the
United States.’’
(b) REPORTING OF MILITARY EARNED INCOME.—
Subsection (a) of section 6051 (relating to receipts for em-
ployees) is amended by striking ‘‘and’’ at the end of para-
graph (8), by striking the period at the end of paragraph
(9) and by inserting ‘‘, and’’, and by inserting after para-
graph (9) the following new paragraph:
‘‘(10) in the case of an employee who is a mem-
ber of the Armed Forces of the United States, such
employee’s earned income as determined for pur-
poses of section 32 (relating to earned income cred-
it).’’
(c) ADVANCE PAYMENT OF EARNED INCOME CREDIT
BASED ON MILITARY EARNED INCOME.—Paragraph (1)
of section 3507(c) (defining earned income advance
amount) is amended by adding at the end the following
new sentence:
‘‘In the case of an employee who is a member of the
Armed Forces of the United States, the earned in-
come advance amount shall be determined by taking
into account such employee’s earned income as de-
termined for purposes of section 32.’’
(d) EFFECTIVE DATES.—
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(1) SUBSECTION (a).—The amendment made
by subsection (a) shall apply to taxable years begin-
ning after December 31, 1994.
(2) SUBSECTIONS (b) AND (c).—The amend-
ments made by subsections (b) and (c) shall apply
to remuneration paid after December 31, 1994.
SEC. 722. CERTAIN 
NONRESIDENT 
ALIENS 
INELIGIBLE
FOR EARNED INCOME TAX CREDIT.
(a) IN GENERAL.—Paragraph (1) of section 32(c)
(defining eligible individual) is amended by adding at the
end the following new subparagraph:
‘‘(E) LIMITATION ON ELIGIBILITY OF NON-
RESIDENT ALIENS.—The term ‘eligible individ-
ual’ shall not include any individual who is a
nonresident alien individual for any portion of
the taxable year unless such individual is treat-
ed for such taxable year as a resident of the
United States for purposes of this chapter by
reason of an election under subsection (g) or
(h) of section 6013.’’
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to taxable years beginning after
December 31, 1994.
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SEC. 723. INCOME OF PRISONERS DISREGARDED IN DE-
TERMINING EARNED INCOME TAX CREDIT.
(a) IN GENERAL.—Subparagraph (B) of section
32(c)(2) (defining earned income) is amended by striking
‘‘and’’ at the end of clause (ii), by striking the period at
the end of clause (iii) and inserting ‘‘, and’’, and by adding
at the end the following new clause:
‘‘(iv) no amount received for services
provided by an individual while the individ-
ual is an inmate at a penal institution shall
be taken into account.’’
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to taxable years beginning after
December 31, 1993.
Subtitle D—Provisions Relating To
Retirement Benefits
SEC. 731. TREATMENT OF EXCESS PENSION ASSETS USED
FOR RETIREE HEALTH BENEFITS.
(a) 5-YEAR EXTENSION.—Paragraph (5) of section
420(b) (defining qualified transfer) is amended by striking
‘‘1995’’ and inserting ‘‘2000’’.
(b) MINIMUM
BENEFIT
REQUIREMENTS.—Para-
graph (3) of section 420(c) (relating to requirements of
plans transferring assets) is amended to read as follows:
‘‘(3) MAINTENANCE
OF
BENEFIT
REQUIRE-
MENTS.—
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‘‘(A) IN GENERAL.—The requirements of
this paragraph are met if each group health
plan or arrangement under which applicable
health benefits are provided provides that the
applicable health benefits provided by the em-
ployer during each taxable year during the ben-
efit maintenance period are substantially the
same as the applicable health benefits provided
by the employer during the taxable year imme-
diately preceding the taxable year of the quali-
fied transfer.
‘‘(B) ELECTION TO APPLY SEPARATELY.—
An employer may elect to have this paragraph
applied separately with respect to individuals el-
igible for benefits under title XVIII of the So-
cial Security Act at any time during the taxable
year and with respect to individuals not so eligi-
ble.
‘‘(C) BENEFIT
MAINTENANCE
PERIOD.—
For purposes of this paragraph, the term ‘bene-
fit maintenance period’ means the period of 5
taxable years beginning with the taxable year in
which the qualified transfer occurs. If a taxable
year is in 2 or more benefit maintenance peri-
ods, this paragraph shall be applied by taking
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into account the highest level of benefits re-
quired to be provided under subparagraph (A)
for such taxable year.’’
(c) CONFORMING AMENDMENTS.—
(1) Clause (iii) of section 420(b)(1)(C) is
amended by striking ‘‘cost’’ and inserting ‘‘benefits’’.
(2) Subparagraph (B) of section 420(e)(1) is
amended to read as follows:
‘‘(B) REDUCTIONS
FOR
AMOUNTS
PRE-
VIOUSLY SET ASIDE.—The amount determined
under subparagraph (A) shall be reduced by the
amount which bears the same ratio to such
amount as—
‘‘(i) the value (as of the close of the
plan year preceding the year of the quali-
fied transfer) of the assets in all health
benefits accounts or welfare benefit funds
(as defined in section 419(e)(1)) set aside
to pay for the qualified current retiree
health liability, bears to
‘‘(ii) the present value of the qualified
current retiree health liabilities for all plan
years (determined without regard to this
subparagraph).’’
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(3) Subparagraph (D) of section 420(e)(1) is
amended by striking ‘‘or in calculating applicable
employer cost under subsection (c)(3)(B)’’ and in-
serting ‘‘and shall not be subject to the minimum
benefit requirements of subsection (c)(3)’’.
(4)(A) Section 101(e)(3) of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C.
1021(e)(3)) is amended by striking ‘‘1991’’ and in-
serting ‘‘1995’’.
(B) Section 403(c)(1) of such Act (29 U.S.C.
1103(c)(1)) is amended by striking ‘‘1991’’ and in-
serting ‘‘1995’’.
(C) Paragraph (13) of section 408(b) of such
Act (29 U.S.C. 1108(b)(13)) is amended—
(i) by striking ‘‘1996’’ and inserting
‘‘2001’’, and
(ii) by striking ‘‘1991’’ and inserting
‘‘1995’’.
(d) EFFECTIVE DATES.—
(1) EXTENSION.—The amendments made by
subsections (a) and (c)(3) shall apply to taxable
years beginning after December 31, 1995.
(2) BENEFITS.—The amendments made by
subsections (b) and (c)(1) and (2) shall apply to
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qualified transfers occurring after the date of the
enactment of this Act.
SEC. 732. ROUNDING RULES FOR COST-OF-LIVING ADJUST-
MENTS.
(a) COST-OF-LIVING ADJUSTMENT FOR COMPENSA-
TION LIMIT.—Section 401(a)(17)(B) is amended to read
as follows:
‘‘(B) COST-OF-LIVING ADJUSTMENT.—The
Secretary shall adjust annually the $150,000
amount in subparagraph (A) for increases in
the cost-of-living at the same time and in the
same manner as adjustments under section
415(d); except that the base period shall be the
calendar quarter beginning October 1, 1993,
and any increase which is not a multiple of
$10,000 shall be rounded to the next lowest
multiple of $10,000.’’
(b) COST-OF-LIVING ADJUSTMENT
FOR MAXIMUM
DEFINED BENEFIT AMOUNT AND MAXIMUM ANNUAL AD-
DITION.—
(1) IN GENERAL.—Section 415(d) is amended
to read as follows:
‘‘(d) COST-OF-LIVING ADJUSTMENTS.—
‘‘(1) IN GENERAL.—The Secretary shall adjust
annually—
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‘‘(A) the $90,000 amount in subsection
(b)(1)(A),
‘‘(B) in the case of a participant who sepa-
rated from service, the amount taken into ac-
count under subsection (b)(1)(B), and
‘‘(C) the $30,000 amount in subsection
(c)(1)(A),
for increases in the cost-of-living in accordance with
regulations prescribed by the Secretary.
‘‘(2) METHOD.—The regulations prescribed
under paragraph (1) shall provide for—
‘‘(A) an adjustment with respect to any
calendar year based on the increase in the ap-
plicable index for the calendar quarter ending
September 30 of the preceding calendar year
over such index for the base period, and
‘‘(B) adjustment procedures which are
similar to the procedures used to adjust benefit
amounts under section 215(i)(2)(A) of the So-
cial Security Act.
‘‘(3) BASE
PERIOD.—For purposes of para-
graph (2)—
‘‘(A) $90,000 AMOUNT.—The base period
taken into account for purposes of paragraph
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(1)(A) is the calendar quarter beginning Octo-
ber 1, 1986.
‘‘(B) SEPARATIONS AFTER DECEMBER 31,
1994.—The base period taken into account for
purposes of paragraph (1)(B) with respect to
individuals separating from service with the em-
ployer after December 31, 1994, is the calendar
quarter beginning July 1 of the calendar year
preceding the calendar year in which such sepa-
ration occurs.
‘‘(C) SEPARATIONS
BEFORE
JANUARY
1,
1995.—The base period taken into account for
purposes of paragraph (1)(B) with respect to
individuals separating from service with the em-
ployer before January 1, 1995, is the calendar
quarter beginning October 1 of the calendar
year preceding the calendar year in which such
separation occurs.
‘‘(D) $30,000 AMOUNT.—The base period
taken into account for purposes of paragraph
(1)(C) is the calendar quarter beginning Octo-
ber 1, 1993.
‘‘(4) ROUNDING.—Any increase under subpara-
graph (A) or (C) of paragraph (1) which is not a
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multiple of $5,000 shall be rounded to the next low-
est multiple of $5,000.’’
(2) 
CONFORMING
AMENDMENT.—Section
415(c)(1)(A) is amended by striking ‘‘(or, if greater,
1⁄4 of the dollar limitation in effect under subsection
(b)(1)(A))’’.
(c) COST-OF-LIVING ADJUSTMENT
FOR MAXIMUM
SALARY DEFERRAL.—Section 402(g)(5) is amended by
inserting before the period ‘‘; except that any increase
under this paragraph which is not a multiple of $500 shall
be rounded to the next lowest multiple of $500’’.
(d) COST-OF-LIVING ADJUSTMENT FOR ELIGIBILITY
FOR
SIMPLIFIED
EMPLOYEE
PENSIONS.—Section
408(k)(8) is amended by inserting before the period ‘‘; ex-
cept that any increase in the $300 amount which is not
a multiple of $50 shall be rounded to the next lowest mul-
tiple of $50’’.
(e) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section
shall apply to years beginning after December 31,
1994.
(2) ROUNDING
NOT
TO
RESULT
IN
DE-
CREASES.—The amendments made by this section
providing for the rounding of indexed amounts shall
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not apply to any year to the extent the rounding
would require the indexed amount to be reduced
below the amount in effect for years beginning in
1994.
SEC. 733. INCREASE IN INCLUSION OF SOCIAL SECURITY
BENEFITS PAID TO NONRESIDENTS.
(a) IN GENERAL.—Subparagraph (A) of section
871(a)(3) (relating to taxation of Social Security benefits)
is amended by striking ‘‘one-half’’ and inserting ‘‘85 per-
cent’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to benefits paid after December
31, 1994, in taxable years ending after such date.
Subtitle E—Other Provisions
SEC. 741. PARTNERSHIP DISTRIBUTIONS OF MARKETABLE
SECURITIES.
(a) IN GENERAL.—Section 731 (relating to extent of
recognition of gain or loss on distribution) is amended by
redesignating subsection (c) as subsection (d) and by in-
serting after subsection (b) the following new subsection:
‘‘(c) TREATMENT OF MARKETABLE SECURITIES.—
‘‘(1) IN GENERAL.—For purposes of subsection
(a)(1) and section 737—
‘‘(A) the term ‘money’ includes marketable
securities, and
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‘‘(B) such securities shall be taken into ac-
count at their fair market value as of the date
of the distribution.
‘‘(2) MARKETABLE SECURITIES.—For purposes
of this subsection:
‘‘(A) IN GENERAL.—The term ‘marketable
securities’ means financial instruments and for-
eign currencies which are, as of the date of the
distribution, actively traded (within the mean-
ing of section 1092(d)(1)).
‘‘(B) OTHER
PROPERTY.—Such term in-
cludes—
‘‘(i) any interest in—
‘‘(I) a common trust fund, or
‘‘(II) 
a 
regulated 
investment
company which is offering for sale or
has outstanding any redeemable secu-
rity (as defined in section 2(a)(32) of
the Investment Company Act of 1940)
of which it is the issuer,
‘‘(ii) any financial instrument which,
pursuant to its terms or any other ar-
rangement, is readily convertible into, or
exchangeable for, money or marketable se-
curities,
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‘‘(iii) any financial instrument the
value of which is determined substantially
by reference to marketable securities,
‘‘(iv) except to the extent provided in
regulations prescribed by the Secretary,
any interest in a precious metal which, as
of the date of the distribution, is actively
traded (within the meaning of section
1092(d)(1)) unless such metal was pro-
duced, used, or held in the active conduct
of a trade or business by the partnership,
‘‘(v) except as otherwise provided in
regulations prescribed by the Secretary, in-
terests in any entity if substantially all of
the assets of such entity consist (directly
or indirectly) of marketable securities,
money, or both, and
‘‘(vi) to the extent provided in regula-
tions prescribed by the Secretary, any in-
terest in an entity not described in clause
(v) but only to the extent of the value of
such interest which is attributable to mar-
ketable securities, money, or both.
‘‘(C) FINANCIAL INSTRUMENT.—The term
‘financial instrument’ includes stocks and other
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equity interests, evidences of indebtedness, op-
tions, forward or futures contracts, notional
principal contracts, and derivatives.
‘‘(3) EXCEPTIONS.—
‘‘(A) IN
GENERAL.—Paragraph (1) shall
not apply to the distribution from a partnership
of a marketable security to a partner if—
‘‘(i) the security was contributed to
the partnership by such partner, except to
the extent that the value of the distributed
security is attributable to marketable secu-
rities or money contributed (directly or in-
directly) to the entity to which the distrib-
uted security relates,
‘‘(ii) to the extent provided in regula-
tions prescribed by the Secretary, the prop-
erty was not a marketable security when
acquired by such partnership, or
‘‘(iii) such partnership is an invest-
ment partnership and such partner is an
eligible partner thereof.
‘‘(B) LIMITATION ON GAIN RECOGNIZED.—
In the case of a distribution of marketable secu-
rities to a partner, the amount taken into ac-
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count under paragraph (1) shall be reduced
(but not below zero) by the excess (if any) of—
‘‘(i) such partner’s distributive share
of the net gain which would be recognized
if all of the marketable securities of the
same class and issuer as the distributed se-
curities held by the partnership were sold
(immediately before the transaction to
which the distribution relates) by the part-
nership for fair market value, over
‘‘(ii) such partner’s distributive share
of the net gain which is attributable to the
marketable securities of the same class and
issuer as the distributed securities held by
the partnership immediately after the
transaction, determined by using the same
fair market value as used under clause (i).
Under regulations prescribed by the Secretary,
all marketable securities held by the partner-
ship may be treated as marketable securities of
the same class and issuer as the distributed se-
curities.
‘‘(C) DEFINITIONS RELATING TO INVEST-
MENT
PARTNERSHIPS.—For purposes of sub-
paragraph (A)(iii):
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‘‘(i) INVESTMENT
PARTNERSHIP.—
The term ‘investment partnership’ means
any partnership which has never been en-
gaged in a trade or business and substan-
tially all of the assets (by value) of which
have always consisted of—
‘‘(I) money,
‘‘(II) stock in a corporation,
‘‘(III) notes, bonds, debentures,
or other evidences of indebtedness,
‘‘(IV) interest rate, currency, or
equity notional principal contracts,
‘‘(V) foreign currencies,
‘‘(VI) interests in or derivative fi-
nancial instruments (including op-
tions, forward or futures contracts,
short positions, and similar financial
instruments) in any asset described in
any other subclause of this clause or
in any commodity traded on or sub-
ject to the rules of a board of trade or
commodity exchange,
‘‘(VII) other assets specified in
regulations prescribed by the Sec-
retary, or
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‘‘(VIII) any combination of the
foregoing.
‘‘(ii) EXCEPTION
FOR
CERTAIN
AC-
TIVITIES.—A partnership shall not be
treated as engaged in a trade or business
by reason of—
‘‘(I) any activity undertaken as
an investor, trader, or dealer in any
asset described in clause (i), or
‘‘(II) any other activity specified
in regulations prescribed by the Sec-
retary.
‘‘(iii) ELIGIBLE PARTNER.—
‘‘(I) IN GENERAL.—The term ‘el-
igible partner’ means any partner
who, before the date of the distribu-
tion, did not contribute to the part-
nership any property other than as-
sets described in clause (i).
‘‘(II) EXCEPTION
FOR
CERTAIN
NONRECOGNITION
TRANSACTIONS.—
The term ‘eligible partner’ shall not
include the transferor or transferee in
a nonrecognition transaction involving
a transfer of any portion of an inter-
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est in a partnership with respect to
which the transferor was not an eligi-
ble partner.
‘‘(iv) LOOK-THRU
OF
PARTNERSHIP
TIERS.—Except as otherwise provided in
regulations prescribed by the Secretary—
‘‘(I) a partnership shall be treat-
ed as engaged in any trade or busi-
ness engaged in by, and as holding
(instead of a partnership interest) a
proportionate share of the assets of,
any other partnership in which the
partnership holds a partnership inter-
est, and
‘‘(II) a partner who contributes
to a partnership an interest in an-
other partnership shall be treated as
contributing a proportionate share of
the assets of the other partnership.
If the preceding sentence does not apply
under such regulations with respect to any
interest held by a partnership in another
partnership, the interest in such other
partnership shall be treated as if it were
specified in a subclause of clause (i).
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‘‘(4) BASIS OF SECURITIES DISTRIBUTED.—
‘‘(A) IN GENERAL.—The basis of market-
able securities with respect to which gain is rec-
ognized by reason of this subsection shall be—
‘‘(i) their basis determined under sec-
tion 732, increased by
‘‘(ii) the amount of such gain.
‘‘(B) ALLOCATION OF BASIS INCREASE.—
Any increase in basis attributable to the gain
described in subparagraph (A)(ii) shall be allo-
cated to marketable securities in proportion to
their respective amounts of unrealized apprecia-
tion before such increase.
‘‘(5) SUBSECTION DISREGARDED IN DETERMIN-
ING BASIS OF PARTNER’S INTEREST IN PARTNER-
SHIP AND OF BASIS OF PARTNERSHIP PROPERTY.—
Sections 733 and 734 shall be applied as if no gain
were recognized, and no adjustment were made to
the basis of property, under this subsection.
‘‘(6) CHARACTER
OF
GAIN
RECOGNIZED.—In
the case of a distribution of a marketable security
which is an unrealized receivable (as defined in sec-
tion 751(c)) or an inventory item (as defined in sec-
tion 751(d)(2)), any gain recognized under this sub-
section shall be treated as ordinary income to the ex-
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tent of any increase in the basis of such security at-
tributable to the gain described in paragraph
(4)(A)(ii).
‘‘(7) REGULATIONS.—The Secretary shall pre-
scribe such regulations as may be necessary or ap-
propriate to carry out the purposes of this sub-
section, including regulations to prevent the avoid-
ance of such purposes.’’
(b) CONFORMING AMENDMENTS.—
(1) The last sentence of section 737(c)(1) is
amended to read as follows: ‘‘For purposes of deter-
mining the basis of the distributed property (other
than money), such increase shall be treated as occur-
ring immediately before the distribution.’’
(2) Section 737 is amended by adding at the
end the following new subsection:
‘‘(e) 
MARKETABLE
SECURITIES
TREATED
AS
MONEY.—
‘‘For treatment of marketable securities as money
for purposes of this section, see section 731(c).’’
(c) EFFECTIVE DATE.—
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by
this section shall apply to distributions after the
date of the enactment of this Act.
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(2) CERTAIN DISTRIBUTIONS BEFORE JANUARY
1, 1995.—The amendments made by this section
shall not apply to any marketable security distrib-
uted before January 1, 1995, by the partnership
which held such security on July 27, 1994.
(3) DISTRIBUTIONS IN LIQUIDATION OF PART-
NER’S INTEREST.—The amendments made by this
section shall not apply to the distribution of a mar-
ketable security in liquidation of a partner’s interest
in a partnership if—
(A) such liquidation is pursuant to a writ-
ten contract which was binding on July 15,
1994, and at all times thereafter before the dis-
tribution, and
(B) such contract provides for the pur-
chase of such interest not later than a date cer-
tain for—
(i) a fixed value of marketable securi-
ties that are specified in the contract, or
(ii) other property.
The preceding sentence shall not apply if the partner
has the right to elect that such distribution be made
other than in marketable securities.
(4) DISTRIBUTIONS IN COMPLETE LIQUIDATION
OF PUBLICLY TRADED PARTNERSHIPS.—
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(A) IN GENERAL.—The amendments made
by this section shall not apply to the distribu-
tion of a marketable security in a qualified
partnership liquidation if—
(i) the marketable securities were re-
ceived by the partnership in a nonrecogni-
tion transaction in exchange for substan-
tially all of the assets of the partnership,
(ii) the marketable securities are dis-
tributed by the partnership within 90 days
after their receipt by the partnership, and
(iii) the partnership is liquidated be-
fore the beginning of the 1st taxable year
of the partnership beginning after Decem-
ber 31, 1997.
(B) QUALIFIED
PARTNERSHIP
LIQUIDA-
TION.—For purposes of subparagraph (A), the
term 
‘‘qualified 
partnership 
liquidation’’
means—
(i) a complete liquidation of a publicly
traded partnership (as defined in section
7704(b) of the Internal Revenue Code of
1986) which is an existing partnership (as
defined in section 10211(c)(2) of the Reve-
nue Act of 1987), and
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(ii) a complete liquidation of a part-
nership which is related to a partnership
described in clause (i) if such liquidation is
related to a complete liquidation of the
partnership described in clause (i).
(5) MARKETABLE SECURITIES.—For purposes
of this subsection, the term ‘‘marketable securities’’
has the meaning given such term by section 731(c)
of the Internal Revenue Code of 1986, as added by
this section.
SEC. 742. TAXPAYER IDENTIFICATION NUMBERS REQUIRED
AT BIRTH.
(a) EARNED INCOME CREDIT.—Clause (i) of section
32(c)(3)(D) is amended to read as follows:
‘‘(i) IN GENERAL.—The requirements
of this subparagraph are met if the tax-
payer includes the name, age, and TIN of
each qualifying child (without regard to
this subparagraph) on the return of tax for
the taxable year.’’
(b) DEPENDENCY EXEMPTION.—Subsection (e) of
section 6109 is amended to read as follows:
‘‘(e) FURNISHING NUMBER FOR DEPENDENTS.—Any
taxpayer who claims an exemption under section 151 for
any dependent on a return for any taxable year shall in-