177
(10) Section 2701(e)(6) is amended by inserting
‘‘or to reflect the application of subsection (d)’’ before
the period at the end thereof.
(11)(A) Section 2702(a)(3)(A) is amended—
(i) by striking ‘‘to the extent’’ and inserting
‘‘if’’ in clause (i),
(ii) by striking ‘‘or’’ at the end of clause (i),
(iii) by striking the period at the end of
clause (ii) and inserting ‘‘, or’’, and
(iv) by adding at the end thereof the follow-
ing new clause:
‘‘(iii) to the extent that regulations
provide that such transfer is not inconsist-
ent with the purposes of this section.’’
(B)(i) Section 2702(a)(3) is amended by striking
‘‘incomplete transfer’’ each place it appears and in-
serting ‘‘incomplete gift’’.
(ii) The heading for section 2702(a)(3)(B) is
amended by striking ‘‘INCOMPLETE TRANSFER’’ and
inserting ‘‘INCOMPLETE GIFT’’.
(g) AMENDMENTS RELATED TO SUBTITLE G.—
(1)(A) Subsection (a) of section 1248 is
amended—
(i) by striking ‘‘, or if a United States per-
son receives a distribution from a foreign cor-
178
poration which, under section 302 or 331, is
treated as an exchange of stock’’ in paragraph
(1), and
(ii) by adding at the end thereof the follow-
ing new sentence: ‘‘For purposes of this section,
a United States person shall be treated as having
sold or exchanged any stock if, under any provi-
sion of this subtitle, such person is treated as re-
alizing gain from the sale or exchange of such
stock.’’.
(B) Paragraph (1) of section 1248(e) is amended
by striking ‘‘, or receives a distribution from a domes-
tic corporation which, under section 302 or 331, is
treated as an exchange of stock’’.
(C) Subparagraph (B) of section 1248(f)(1) is
amended by striking ‘‘or 361(c)(1)’’ and inserting
‘‘355(c)(1), or 361(c)(1)’’.
(D) Paragraph (1) of section 1248(i) is amended
to read as follows:
‘‘(1) IN GENERAL.—If any shareholder of a 10-
percent corporate shareholder of a foreign corporation
exchanges stock of the 10-percent corporate share-
holder for stock of the foreign corporation, such 10-
percent corporate shareholder shall recognize gain in
179
the same manner as if the stock of the foreign cor-
poration received in such exchange had been—
‘‘(A) issued to the 10-percent corporate
shareholder, and
‘‘(B) then distributed by the 10-percent cor-
porate shareholder to such shareholder in re-
demption or liquidation (whichever is appro-
priate).
The amount of gain recognized by such 10-percent
corporate shareholder under the preceding sentence
shall not exceed the amount treated as a dividend
under this section.’’
(2) Section 897 is amended by striking sub-
section (f).
(3) Paragraph (13) of section 4975(d) is
amended by striking ‘‘section 408(b)’’ and inserting
‘‘section 408(b)(12)’’.
(4) Clause (iii) of section 56(g)(4)(D) is
amended by inserting ‘‘, but only with respect to tax-
able years beginning after December 31, 1989’’ before
the period at the end thereof.
(5)(A) Paragraph (11) of section 11701(a) of the
Revenue Reconciliation Act of 1990 (and the amend-
ment made by such paragraph) are hereby repealed,
and section 7108(r)(2) of the Revenue Reconciliation
180
Act of 1989 shall be applied as if such paragraph
(and amendment) had never been enacted.
(B) Subparagraph (A) shall not apply to any
building if the owner of such building establishes to
the satisfaction of the Secretary of the Treasury or his
delegate that such owner reasonably relied on the
amendment made by such paragraph (11).
(h) AMENDMENTS RELATED TO SUBTITLE H.—
(1)(A) Clause (vi) of section 168(e)(3)(B) is
amended by striking ‘‘or’’ at the end of subclause (I),
by striking the period at the end of subclause (II) and
inserting ‘‘, or’’, and by adding at the end thereof the
following new subclause:
‘‘(III) is described in section
48(l)(3)(A)(ix) (as in effect on the day
before the date of the enactment of the
Revenue Reconciliation Act of 1990).’’
(B) Subparagraph (B) of section 168(e)(3) (re-
lating to 5-year property) is amended by adding at
the end the following flush sentence:
‘‘Nothing in any provision of law shall be con-
strued to treat property as not being described in
clause (vi)(I) (or the corresponding provisions of
prior law) by reason of being public utility
181
property 
(within 
the 
meaning 
of 
section
48(a)(3)).’’
(C) Subparagraph (K) of section 168(g)(4) is
amended by striking ‘‘section 48(a)(3)(A)(iii)’’ and
inserting ‘‘section 48(l)(3)(A)(ix) (as in effect on the
day before the date of the enactment of the Revenue
Reconciliation Act of 1990)’’.
(2) Clause (ii) of section 172(b)(1)(E) is amend-
ed by striking ‘‘subsection (m)’’ and inserting ‘‘sub-
section (h)’’.
(3) Sections 805(a)(4)(E), 832(b)(5)(C)(ii)(II),
and 832(b)(5)(D)(ii)(II) are each amended by strik-
ing ‘‘243(b)(5)’’ and inserting ‘‘243(b)(2)’’.
(4) Subparagraph (A) of section 243(b)(3) is
amended by inserting ‘‘of’’ after ‘‘In the case’’.
(5) The subsection heading for subsection (a) of
section 280F is amended by striking ‘‘INVESTMENT
TAX CREDIT AND’’.
(6) Clause (i) of section 1504(c)(2)(B) is amend-
ed by inserting ‘‘section’’ before ‘‘243(b)(2)’’.
(7) Paragraph (3) of section 341(f) is amended
by striking ‘‘351, 361, 371(a), or 374(a)’’ and insert-
ing ‘‘351, or 361’’.
(8) Paragraph (2) of section 243(b) is amended
to read as follows:
182
‘‘(2) AFFILIATED GROUP.—For purposes of this
subsection:
‘‘(A) IN
GENERAL.—The term ‘affiliated
group’ has the meaning given such term by sec-
tion 1504(a), except that for such purposes sec-
tions 1504(b)(2), 1504(b)(4), and 1504(c) shall
not apply.
‘‘(B) GROUP MUST BE CONSISTENT IN FOR-
EIGN
TAX
TREATMENT.—The requirements of
paragraph (1)(A) shall not be treated as being
met with respect to any dividend received by a
corporation if, for any taxable year which in-
cludes the day on which such dividend is re-
ceived—
‘‘(i) 1 or more members of the affili-
ated group referred to in paragraph (1)(A)
choose to any extent to take the benefits of
section 901, and
‘‘(ii) 1 or more other members of such
group claim to any extent a deduction for
taxes otherwise creditable under section
901.’’
(9) 
The 
amendment 
made 
by 
section
11813(b)(17) of the Revenue Reconciliation Act of
1990 shall be applied as if the material stricken by
183
such amendment included the closing parenthesis
after ‘‘section 48(a)(5)’’.
(10) Paragraph (1) of section 179(d) is amended
by striking ‘‘in a trade or business’’ and inserting ‘‘a
trade or business’’.
(11) Subparagraph (E) of section 50(a)(2) is
amended by striking ‘‘section 48(a)(5)(A)’’ and in-
serting ‘‘section 48(a)(5)’’.
(12) 
The 
amendment 
made 
by 
section
11801(c)(9)(G)(ii) of the Revenue Reconciliation Act
of 1990 shall be applied as if it struck ‘‘Section
422A(c)(2)’’ and inserted ‘‘Section 422(c)(2)’’.
(13) Subparagraph (B) of section 424(c)(3) is
amended by striking ‘‘a qualified stock option, an in-
centive stock option, an option granted under an em-
ployee stock purchase plan, or a restricted stock op-
tion’’ and inserting ‘‘an incentive stock option or an
option granted under an employee stock purchase
plan’’.
(14) Subparagraph (E) of section 1367(a)(2) is
amended by striking ‘‘section 613A(c)(13)(B)’’ and
inserting ‘‘section 613A(c)(11)(B)’’.
(15) Subparagraph (B) of section 460(e)(6) is
amended by striking ‘‘section 167(k)’’ and inserting
‘‘section 168(e)(2)(A)(ii)’’.
184
(16) Subparagraph (C) of section 172(h)(4) is
amended by striking ‘‘subsection (b)(1)(M)’’ and in-
serting ‘‘subsection (b)(1)(E)’’.
(17) Section 6503 is amended—
(A) by redesignating the subsection relating
to extension in case of certain summonses as sub-
section (j), and
(B) by redesignating the subsection relating
to cross references as subsection (k).
(18) Paragraph (4) of section 1250(e) is hereby
repealed.
(i) EFFECTIVE DATE.—Except as otherwise expressly
provided—
(1) the amendments made by this section shall be
treated as amendments to the Internal Revenue Code
of 1986 as amended by the Revenue Reconciliation
Act of 1993; and
(2) any amendment made by this section shall
apply to periods before the date of the enactment of
this section in the same manner as if it had been in-
cluded in the provision of the Revenue Reconciliation
Act of 1990 to which such amendment relates.
185
SEC. 1703. AMENDMENTS RELATED TO REVENUE REC-
ONCILIATION ACT OF 1993.
(a) AMENDMENT RELATED
TO SECTION 13114.—
Paragraph (2) of section 1044(c) is amended to read as fol-
lows:
‘‘(2) PURCHASE.—The taxpayer shall be consid-
ered to have purchased any property if, but for sub-
section (d), the unadjusted basis of such property
would be its cost within the meaning of section 1012.’’
(b) AMENDMENTS RELATED TO SECTION 13142.—
(1) Subparagraph (B) of section 13142(b)(6) of
the Revenue Reconciliation Act of 1993 is amended to
read as follows:
‘‘(B) FULL-TIME
STUDENTS, WAIVER
AU-
THORITY, AND PROHIBITED DISCRIMINATION.—
The amendments made by paragraphs (2), (3),
and (4) shall take effect on the date of the enact-
ment of this Act.’’
(2) Subparagraph (C) of section 13142(b)(6) of
such Act is amended by striking ‘‘paragraph (2)’’ and
inserting ‘‘paragraph (5)’’.
(c) AMENDMENT RELATED TO SECTION 13161.—
(1) IN GENERAL.—Subsection (e) of section 4001
(relating to inflation adjustment) is amended to read
as follows:
‘‘(e) INFLATION ADJUSTMENT.—
186
‘‘(1) IN GENERAL.—The $30,000 amount in sub-
section (a) and section 4003(a) shall be increased by
an amount equal to—
‘‘(A) $30,000, multiplied by
‘‘(B) the cost-of-living adjustment under sec-
tion 1(f)(3) for the calendar year in which the
vehicle is sold, determined by substituting ‘cal-
endar year 1990’ for ‘calendar year 1992’ in
subparagraph (B) thereof.
‘‘(2) ROUNDING.—If any amount as adjusted
under paragraph (1) is not a multiple of $2,000, such
amount shall be rounded to the next lowest multiple
of $2,000.’’
(2) EFFECTIVE DATE.—The amendment made by
paragraph (1) shall take effect on the date of the en-
actment of this Act.
(d) AMENDMENT RELATED
TO SECTION 13201.—
Clause (ii) of section 135(b)(2)(B) is amended by inserting
before the period at the end thereof the following: ‘‘, deter-
mined by substituting ‘calendar year 1989’ for ‘calendar
year 1992’ in subparagraph (B) thereof’’.
(e) AMENDMENTS RELATED TO SECTION 13203.—Sub-
section (a) of section 59 is amended—
(1) by striking ‘‘the amount determined under
section 55(b)(1)(A)’’ in paragraph (1)(A) and
187
(2)(A)(i) and inserting ‘‘the pre-credit tentative mini-
mum tax’’,
(2) by striking ‘‘specified in section 55(b)(1)(A)’’
in paragraph (1)(C) and inserting ‘‘specified in sub-
paragraph (A)(i) or (B)(i) of section 55(b)(1) (which-
ever applies)’’,
(3) by striking ‘‘which would be determined
under section 55(b)(1)(A)’’ in paragraph (2)(A)(ii)
and inserting ‘‘which would be the pre-credit tentative
minimum tax’’, and
(4) by adding at the end thereof the following
new paragraph:
‘‘(3) PRE-CREDIT
TENTATIVE
MINIMUM
TAX.—
For purposes of this subsection, the term ‘pre-credit
tentative minimum tax’ means—
‘‘(A) in the case of a taxpayer other than a
corporation, the amount determined under the
first sentence of section 55(b)(1)(A)(i), or
‘‘(B) in the case of a corporation, the
amount 
determined 
under 
section
55(b)(1)(B)(i).’’
(f) AMENDMENT RELATED TO SECTION 13221.—Sec-
tions 1201(a) and 1561(a) are each amended by striking
‘‘last sentence’’ each place it appears and inserting ‘‘last
2 sentences’’.
188
(g) AMENDMENTS RELATED TO SECTION 13222.—
(1) Subparagraph (B) of section 6033(e)(1) is
amended by adding at the end thereof the following
new clause:
‘‘(iii) COORDINATION
WITH
SECTION
527(f).—This subsection shall not apply to
any amount on which tax is imposed by
reason of section 527(f).’’.
(2) Clause (i) of section 6033(e)(1)(B) is amend-
ed by striking ‘‘this subtitle’’ and inserting ‘‘section
501’’.
(h) AMENDMENT RELATED TO SECTION 13225.—Para-
graph (3) of section 6655(g) is amended by striking all that
follows ‘‘ ‘3rd month’ ’’ in the sentence following subpara-
graph (C) and inserting ‘‘, subsection (e)(2)(A) shall be ap-
plied by substituting ‘2 months’ for ‘3 months’ in clause
(i)(I), the election under clause (i) of subsection (e)(2)(C)
may be made separately for each installment, and clause
(ii) of subsection (e)(2)(C) shall not apply.’’.
(i) AMENDMENTS RELATED TO SECTION 13231.—
(1) Subparagraph (G) of section 904(d)(3) is
amended by striking ‘‘section 951(a)(1)(B)’’ and in-
serting 
‘‘subparagraph 
(B) 
or 
(C) 
of 
section
951(a)(1)’’.
189
(2) Paragraph (1) of section 956A(b) is amended
to read as follows:
‘‘(1) the amount (not including a deficit) re-
ferred to in section 316(a)(1) to the extent such
amount was accumulated in prior taxable years be-
ginning after September 30, 1993, and’’.
(3) Subsection (f) of section 956A is amended by
inserting before the period at the end thereof: ‘‘and
regulations coordinating the provisions of subsections
(c)(3)(A) and (d)’’.
(4) Subsection (b) of section 958 is amended by
striking ‘‘956(b)(2)’’ each place it appears and insert-
ing ‘‘956(c)(2)’’.
(5)(A) Subparagraph (A) of section 1297(d)(2) is
amended by striking ‘‘The adjusted basis of any
asset’’ and inserting ‘‘The amount taken into account
under section 1296(a)(2) with respect to any asset’’.
(B) The paragraph heading of paragraph (2) of
section 1297(d) is amended to read as follows:
‘‘(2) AMOUNT TAKEN INTO ACCOUNT.—’’.
(6) Subsection (e) of section 1297 is amended by
inserting ‘‘For purposes of this part—’’ after the sub-
section heading.
190
(j) AMENDMENT RELATED TO SECTION 13241.—Sub-
paragraph (B) of section 40(e)(1) is amended to read as
follows:
‘‘(B) for any period before January 1, 2001,
during which the rates of tax under section
4081(a)(2)(A) are 4.3 cents per gallon.’’
(k) AMENDMENT RELATED
TO SECTION 13261.—
Clause (iii) of section 13261(g)(2)(A) of the Revenue Rec-
onciliation Act of 1993 is amended by striking ‘‘by the tax-
payer’’ and inserting ‘‘by the taxpayer or a related person’’.
(l) AMENDMENT RELATED TO SECTION 13301.—Sub-
paragraph (B) of section 1397B(d)(5) is amended by strik-
ing ‘‘preceding’’.
(m) CLERICAL AMENDMENTS.—
(1) Subsection (d) of section 39 is amended—
(A) by striking ‘‘45’’ in the heading of
paragraph (5) and inserting ‘‘45A’’, and
(B) by striking ‘‘45’’ in the heading of
paragraph (6) and inserting ‘‘45B’’.
(2) Subparagraph (A) of section 108(d)(9) is
amended by striking ‘‘paragraph (3)(B)’’ and insert-
ing ‘‘paragraph (3)(C)’’.
(3) Subparagraph (C) of section 143(d)(2) is
amended by striking the period at the end thereof and
inserting a comma.
191
(4) Clause (ii) of section 163(j)(6)(E) is amended
by striking ‘‘which is a’’ and inserting ‘‘which is’’.
(5) Subparagraph (A) of section 1017(b)(4) is
amended by striking ‘‘subsection (b)(2)(D)’’ and in-
serting ‘‘subsection (b)(2)(E)’’.
(6) So much of section 1245(a)(3) as precedes
subparagraph (A) thereof is amended to read as
follows:
‘‘(3) SECTION 1245 PROPERTY.—For purposes of
this section, the term ‘section 1245 property’ means
any property which is or has been property of a char-
acter subject to the allowance for depreciation pro-
vided in section 167 and is either—’’.
(7) Paragraph (2) of section 1394(e) is amend-
ed—
(A) by striking ‘‘(i)’’ and inserting ‘‘(A)’’,
and
(B) by striking ‘‘(ii)’’ and inserting ‘‘(B)’’.
(8) Subsection (m) of section 6501 (as redesig-
nated by section 1602) is amended by striking ‘‘or
51(j)’’ and inserting ‘‘45B, or 51(j)’’.
(9)(A) The section 6714 added by section
13242(b)(1) of the Revenue Reconciliation Act of 1993
is hereby redesignated as section 6715.
192
(B) The table of sections for part I of subchapter
B of chapter 68 is amended by striking ‘‘6714’’ in the
item added by such section 13242(b)(2) of such Act
and inserting ‘‘6715’’.
(10) Paragraph (2) of section 9502(b) is amend-
ed by inserting ‘‘and before’’ after ‘‘1982,’’.
(11) Subsection (a)(3) of section 13206 of the
Revenue Reconciliation Act of 1993 is amended by
striking ‘‘this section’’ and inserting ‘‘this sub-
section’’.
(12) Paragraph (1) of section 13215(c) of the
Revenue Reconciliation Act of 1993 is amended by
striking ‘‘Public Law 92–21’’ and inserting ‘‘Public
Law 98–21’’.
(13) Paragraph (2) of section 13311(e) of the
Revenue Reconciliation Act of 1993 is amended by
striking ‘‘section 1393(a)(3)’’ and inserting ‘‘section
1393(a)(2)’’.
(14) Subparagraph (B) of section 117(d)(2) is
amended by striking ‘‘section 132(f)’’ and inserting
‘‘section 132(h)’’.
(n) EFFECTIVE DATE.—Any amendment made by this
section shall take effect as if included in the provision of
the Revenue Reconciliation Act of 1993 to which such
amendment relates.
193
SEC. 1704. MISCELLANEOUS PROVISIONS.
(a) APPLICATION OF AMENDMENTS MADE BY TITLE
XII OF
OMNIBUS
BUDGET
RECONCILIATION
ACT
OF
1990.—Except as otherwise expressly provided, whenever in
title XII of the Omnibus Budget Reconciliation Act of 1990
an amendment or repeal is expressed in terms of an amend-
ment to, or repeal of, a section or other provision, the ref-
erence shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
(b) TREATMENT
OF
CERTAIN
AMOUNTS
UNDER
HEDGE BOND RULES.—
(1) Clause (iii) of section 149(g)(3)(B) is amend-
ed to read as follows:
‘‘(iii) AMOUNTS HELD PENDING REIN-
VESTMENT OR REDEMPTION.—Amounts held
for not more than 30 days pending reinvest-
ment or bond redemption shall be treated as
invested in bonds described in clause (i).’’
(2) The amendment made by paragraph (1) shall
take effect as if included in the amendments made by
section 7651 of the Omnibus Budget Reconciliation
Act of 1989.
(c) TREATMENT OF CERTAIN DISTRIBUTIONS UNDER
SECTION 1445.—
(1) IN
GENERAL.—Paragraph (3) of section
1445(e) is amended by adding at the end thereof the
194
following new sentence: ‘‘Rules similar to the rules of
the preceding provisions of this paragraph shall
apply in the case of any distribution to which section
301 applies and which is not made out of the earn-
ings and profits of such a domestic corporation.’’
(2) EFFECTIVE DATE.—The amendment made by
paragraph (1) shall apply to distributions after the
date of the enactment of this Act.
(d) TREATMENT OF CERTAIN CREDITS UNDER SEC-
TION 469.—
(1) IN GENERAL.—Subparagraph (B) of section
469(c)(3) is amended by adding at the end thereof the
following new sentence: ‘‘If the preceding sentence ap-
plies to the net income from any property for any
taxable year, any credits allowable under subpart B
(other than section 27(a)) or D of part IV of sub-
chapter A for such taxable year which are attributable
to such property shall be treated as credits not from
a passive activity to the extent the amount of such
credits does not exceed the regular tax liability of the
taxpayer for the taxable year which is allocable to
such net income.’’
(2) EFFECTIVE DATE.—The amendment made by
paragraph (1) shall apply to taxable years beginning
after December 31, 1986.
195
(e) TREATMENT OF DISPOSITIONS UNDER PASSIVE
LOSS RULES.—
(1) IN GENERAL.—Subparagraph (A) of section
469(g)(1) is amended to read as follows:
‘‘(A) IN GENERAL.—If all gain or loss real-
ized on such disposition is recognized, the excess
of—
‘‘(i) any loss from such activity for
such taxable year (determined after the ap-
plication of subsection (b)), over
‘‘(ii) any net income or gain for such
taxable year from all other passive activities
(determined after the application of sub-
section (b)),
shall be treated as a loss which is not from a
passive activity.’’
(2) EFFECTIVE DATE.—The amendment made by
paragraph (1) shall apply to taxable years beginning
after December 31, 1986.
(f) MISCELLANEOUS AMENDMENTS TO FOREIGN PRO-
VISIONS.—
(1) COORDINATION
OF
UNIFIED
ESTATE
TAX
CREDIT WITH TREATIES.—Subparagraph (A) of sec-
tion 2102(c)(3) is amended by adding at the end
thereof the following new sentence: ‘‘For purposes of
196
the preceding sentence, property shall not be treated
as situated in the United States if such property is
exempt from the tax imposed by this subchapter
under any treaty obligation of the United States.’’
(2) TREATMENT OF CERTAIN INTEREST PAID TO
RELATED PERSON.—
(A) Subparagraph (B) of section 163(j)(1)
is amended by inserting before the period at the
end thereof the following: ‘‘(and clause (ii) of
paragraph (2)(A) shall not apply for purposes of
applying this subsection to the amount so treat-
ed)’’.
(B) Subsection (j) of section 163 is amended
by redesignating paragraph (7) as paragraph
(8) and by inserting after paragraph (6) the fol-
lowing new paragraph:
‘‘(7) COORDINATION WITH PASSIVE LOSS RULES,
ETC.—This subsection shall be applied before sections
465 and 469.’’
(C) The amendments made by this para-
graph shall apply as if included in the amend-
ments made by section 7210(a) of the Revenue
Reconciliation Act of 1989.
(3) TREATMENT
OF
INTEREST
ALLOCABLE
TO
EFFECTIVELY CONNECTED INCOME.—