‘‘(II) the specified gains (as de-
fined in section 4982(e)(5)(B)(ii)) at-
tributable to the portion of the taxable 
year after October 31 (and before 
January 1). 
‘‘(E) SPECIAL RULE FOR COMPANIES DE-
TERMINING REQUIRED CAPITAL GAIN DISTRIBU-
TIONS ON TAXABLE YEAR BASIS.—In the case 
of a company to which an election under section 
4982(e)(4) applies— 
‘‘(i) if such company’s taxable year 
ends with the month of November, sub-
paragraphs 
(C)(i), 
(D)(i)(II), 
and 
(D)(ii)(II) shall each be applied by sub-
stituting ‘November 30’ for ‘October 31’, 
and 
‘‘(ii) if such company’s taxable year 
ends with the month of December, sub-
paragraph (A) shall not apply.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Subsection (b) of section 852 is amended by 
striking paragraph (10). 
(2) Subsection (c) of section 852 is amended by 
striking paragraph (2) and by redesignating para-
graph (3) as paragraph (2). 
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(3) Subparagraph (D) of section 871(k)(2) is 
amended by striking the last two sentences and in-
serting the following: ‘‘For purposes of this subpara-
graph, the net short-term capital gain of the regu-
lated investment company shall be computed by 
treating any short-term capital gain dividend includ-
ible in gross income with respect to stock of another 
regulated investment company as a short-term cap-
ital gain.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
TITLE IV—MODIFICATIONS RE-
LATED TO EXCISE TAX APPLI-
CABLE TO REGULATED IN-
VESTMENT COMPANIES 
SEC. 401. EXCISE TAX EXEMPTION FOR CERTAIN REGU-
LATED INVESTMENT COMPANIES OWNED BY 
TAX EXEMPT ENTITIES. 
(a) IN GENERAL.—Subsection (f) of section 4982 is 
amended— 
(1) by striking ‘‘either’’ in the matter preceding 
paragraph (1), 
(2) by striking ‘‘or’’ at the end of paragraph 
(1), 
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(3) by striking the period at the end of para-
graph (2) and inserting ‘‘or’’, and 
(4) by inserting after paragraph (2) the fol-
lowing new paragraph: 
‘‘(3) any other tax-exempt entity whose owner-
ship of beneficial interests in the company would not 
preclude the application of section 817(h)(4).’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to calendar years beginning after 
the date of the enactment of this Act. 
SEC. 402. DEFERRAL OF CERTAIN GAINS AND LOSSES OF 
REGULATED INVESTMENT COMPANIES FOR 
EXCISE TAX PURPOSES. 
(a) IN GENERAL.—Subsection (e) of section 4982 is 
amended by striking paragraphs (5) and (6) and inserting 
the following new paragraphs: 
‘‘(5) TREATMENT
OF
SPECIFIED
GAINS
AND 
LOSSES AFTER OCTOBER 31 OF CALENDAR YEAR.— 
‘‘(A) IN GENERAL.—Any specified gain or 
specified loss which (but for this paragraph) 
would be properly taken into account for the 
portion of the calendar year after October 31 
shall be treated as arising on the 1st day of the 
following calendar year. 
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‘‘(B) SPECIFIED GAINS AND LOSSES.—For 
purposes of this paragraph— 
‘‘(i) 
SPECIFIED
GAIN.—The 
term 
‘specified gain’ means ordinary gain from 
the sale, exchange, or other disposition of 
property (including the termination of a 
position with respect to such property). 
Such term shall include any foreign cur-
rency gain attributable to a section 988 
transaction (within the meaning of section 
988) and any amount includible in gross 
income under section 1296(a)(1). 
‘‘(ii) SPECIFIED
LOSS.—The term 
‘specified loss’ means ordinary loss from 
the sale, exchange, or other disposition of 
property (including the termination of a 
position with respect to such property). 
Such term shall include any foreign cur-
rency loss attributable to a section 988 
transaction (within the meaning of section 
988) and any amount allowable as a de-
duction under section 1296(a)(2). 
‘‘(C) SPECIAL
RULE
FOR
COMPANIES 
ELECTING TO USE THE TAXABLE YEAR.—In the 
case of any company making an election under 
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paragraph (4), subparagraph (A) shall be ap-
plied by substituting the last day of the com-
pany’s taxable year for October 31. 
‘‘(6) TREATMENT
OF
MARK
TO
MARKET 
GAIN.— 
‘‘(A) IN GENERAL.—For purposes of deter-
mining a regulated investment company’s ordi-
nary income, notwithstanding paragraph (1)(C), 
each specified mark to market provision shall be 
applied as if such company’s taxable year ended 
on October 31. In the case of a company mak-
ing an election under paragraph (4), the pre-
ceding sentence shall be applied by substituting 
the last day of the company’s taxable year for 
October 31. 
‘‘(B) SPECIFIED MARK TO MARKET PROVI-
SION.—For purposes of this paragraph, the 
term ‘specified mark to market provision’ 
means sections 1256 and 1296 and any other 
provision of this title which treats property as 
disposed of on the last day of the taxable year. 
‘‘(7) ELECTIVE DEFERRAL OF CERTAIN ORDI-
NARY LOSSES.—Except as provided in regulations 
prescribed by the Secretary, in the case of a regu-
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lated investment company which has a taxable year 
other than the calendar year— 
‘‘(A) such company may elect to determine 
its ordinary income for the calendar year with-
out regard to any net ordinary loss (determined 
without regard to specified gains and losses 
taken into account under paragraph (5)) which 
is attributable to the portion of such calendar 
year which is after the beginning of the taxable 
year which begins in such calendar year, and 
‘‘(B) any amount of net ordinary loss not 
taken into account for a calendar year by rea-
son of subparagraph (A) shall be treated as 
arising on the 1st day of the following calendar 
year.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to calendar years beginning after 
the date of the enactment of this Act. 
SEC. 403. DISTRIBUTED AMOUNT FOR EXCISE TAX PUR-
POSES DETERMINED ON BASIS OF TAXES 
PAID BY REGULATED INVESTMENT COM-
PANY. 
(a) IN GENERAL.—Subsection (c) of section 4982 is 
amended by adding at the end the following new para-
graph: 
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the calendar year that includes the date of such disposi-
tion,’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to charges incurred in taxable 
years beginning after the date of the enactment of this 
Act. 
Æ 
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