‘‘(2) MEDICAL
ACTIVITY.—The term ‘medical
activity’ means any activity of providing medical or
hospital care or medical education or medical re-
search.
‘‘(3) MEDICAL
ASSET.—The term ‘medical
asset’ means any tangible or intangible asset used in
a medical activity.
‘‘(g) CONTROLLED ENTITIES.—For purposes of this
section—
‘‘(1) 35-PERCENT CONTROLLED ENTITY.—The
term ‘35-percent controlled entity’ means—
‘‘(A) a corporation in which persons de-
scribed in subparagraph (A), (B), or (C) of sub-
section (e)(1) own more than 35 percent of the
combined voting power,
‘‘(B) a partnership in which such persons
own more than 35 percent of the profits inter-
est, and
‘‘(C) a trust or estate in which such per-
sons own more than 35 percent of the beneficial
interest.
‘‘(2) 50-PERCENT CONTROLLED ENTITY.—The
term ‘50-percent controlled entity’ means any cor-
poration, partnership, or trust in which a medical
service organization owns more than 50 percent of
the combined voting power, profits interest, or bene-
ficial interest, as the case may be.
‘‘(3) CONSTRUCTIVE
OWNERSHIP
RULES.—
Rules similar to the rules of paragraphs (3) and (4)
of section 4946(a) shall apply for purposes of this
subsection.
‘‘(h) OTHER DEFINITIONS.—For purposes of this
section—
‘‘(1) TAXABLE PERIOD.—The term ‘taxable pe-
riod’ means, with respect to any self-dealing asset
transaction, the period beginning with the date on
which the transaction occurs and ending on the ear-
liest of—
‘‘(A) the date of mailing a notice of defi-
ciency under section 6212 with respect to the
tax imposed by subsection (a)(1),
‘‘(B) the date on which the tax imposed by
subsection (a)(1) is assessed, or
‘‘(C) the date on which correction of the
self-dealing asset transaction is corrected.
‘‘(2) AMOUNT INVOLVED.—The term ‘amount
involved’ means, with respect to any self-dealing
asset transaction, the amount of money and fair
market value of other property transferred by the
medical service organization in the transaction (or in
the case of a lease, the fair market value of the
leased property). For purposes of the preceding sen-
tence—
‘‘(A) in the case of the taxes imposed by
subsection (a), fair market value shall be deter-
mined as of the date of which the transaction
occurs, and
‘‘(B) in the case of the taxes imposed by
subsection (b), fair market value shall be the
highest fair market value during the taxable pe-
riod.
‘‘(3) CORRECTION.—The terms ‘correction’ and
‘correct’ mean, with respect to any self-dealing asset
transaction, undoing the transaction to the extent
possible, but in any case place the medical service
organization in a financial position not worse than
that in which it would be if the disqualified person
were dealing under the highest fiduciary standards.’’
(b) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) Subsections (a), (b), and (c) of section 4963
of such Code are each amended by inserting ‘‘4958,’’
after ‘‘4955,’’.
(2) Subsection (b) of section 4962 of such Code
is amended by inserting before the period ‘‘and shall
not include the tax imposed by section 4958(a) (re-
lating to initial tax on self-dealing asset trans-
actions)’’.
(3) Subsection (e) of section 6213 of such Code
is amended by inserting ‘‘4958 (relating to self-deal-
ing in certain assets of tax-exempt medical service
organizations),’’ before ‘‘4971’’.
(4) The table of subchapters for chapter 42 of
such Code is amended by striking the last item and
inserting the following:
‘‘Subchapter D. Self-dealing in certain assets of tax-exempt medi-
cal service organizations.
‘‘Subchapter E. Abatement of first and second tier taxes in cer-
tain cases.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to transactions occurring after No-
vember 26, 1991.
Æ