then, in computing the maximum rate
under section 1(h)(11), rules similar to the
rules of subparagraph (A) shall apply.
‘‘(ii) GROSS
INCOME.—For purposes
of clause (i), in the case of 1 or more sales
or other dispositions of stock or securities,
the term ‘gross income’ includes only the
excess of—
‘‘(I) the net short-term capital
gain from such sales or dispositions,
over
‘‘(II) the net long-term capital
loss from such sales or dispositions.’’.
(3) Subparagraph (C) of section 854(b)(1), as
redesignated by paragraph (2), is amended by strik-
ing ‘‘subparagraph (A)’’ and inserting ‘‘subpara-
graph (A) or (B)’’.
(4) Paragraph (2) of section 854(b) is amended
by inserting ‘‘the maximum rate under section
1(h)(11) and’’ after ‘‘for purposes of’’.
(5) Subsection (b) of section 854 is amended by
adding at the end the following new paragraph:
‘‘(5) COORDINATION WITH SECTION 1(h)(11).—
For purposes of paragraph (1)(B), an amount shall
be treated as a dividend only if the amount is quali-
fied dividend income (within the meaning of section
1(h)(11)(B)).’’.
(d) TREATMENT OF DIVIDENDS RECEIVED FROM
REAL ESTATE INVESTMENT TRUSTS.—Section 857(c)
(relating to restrictions applicable to dividends received
from real estate investment trusts) is amended to read as
follows:
‘‘(c) RESTRICTIONS APPLICABLE TO DIVIDENDS RE-
CEIVED FROM REAL ESTATE INVESTMENT TRUSTS.—
‘‘(1) SECTION
243.—For purposes of section
243 (relating to deductions for dividends received by
corporations), a dividend received from a real estate
investment trust which meets the requirements of
this part shall not be considered a dividend.
‘‘(2) SECTION 1(h)(11).—For purposes of sec-
tion 1(h)(11) (relating to maximum rate of tax on
dividends), rules similar to the rules of section
854(b)(1)(B) shall apply to dividends received from
a real estate trust which meets the requirements of
this part.’’.
(e) CONFORMING AMENDMENTS.—
(1) Paragraph (3) of section 1(h), as redesig-
nated by section 301, is amended to read as follows:
‘‘(3) ADJUSTED NET CAPITAL GAIN.—For pur-
poses of this subsection, the term ‘adjusted net cap-
ital gain’ means the sum of—
‘‘(A) net capital gain (determined without
regard to paragraph (11)) reduced (but not
below zero) by the sum of—
‘‘(i) unrecaptured section 1250 gain,
and
‘‘(ii) 28-percent rate gain, plus
‘‘(B) qualified dividend income (as defined
in paragraph (11)).’’.
(2) Subsection (f) of section 301 is amended
adding at the end the following new paragraph:
‘‘(4) For taxation of dividends received by indi-
viduals at capital gain rates, see section 1(h)(11).’’.
(3) Paragraph (1) of section 306(a) is amended
by adding at the end the following new subpara-
graph:
‘‘(D) TREATMENT
AS
DIVIDEND.—For
purposes of section l(h)(11), any amount treat-
ed as ordinary income under this paragraph
shall be treated as a dividend received from the
corporation.’’.
(4)(A) Subpart C of part II of subchapter C of
chapter 1 (relating to collapsible corporations) is re-
pealed.
(B)(i) Section 338(h) is amended by striking
paragraph (14).
(ii) Sections 467(c)(5)(C), 1255(b)(2), and
1257(d) 
are 
each 
amended 
by 
striking 
‘‘,
341(e)(12),’’.
(iii) The table of subparts for part II of sub-
chapter C of chapter 1 is amended by striking the
item related to subpart C.
(5) Section 531 is amended by striking ‘‘equal
to’’ and all that follows and inserting ‘‘equal to 15
percent of the accumulated taxable income.’’.
(6) Section 541 is amended by striking ‘‘equal
to’’ and all that follows and inserting ‘‘equal to 15
percent of the undistributed personal holding com-
pany income.’’.
(7) Section 584(c) is amended by adding at the
end the following new flush sentence:
‘‘The proportionate share of each participant in the
amount of dividends received by the common trust fund
and to which section 1(h)(11) applies shall be considered
for purposes of such paragraph as having been received
by such participant.’’.
(8) Paragraph (5) of section 702(a) is amended
to read as follows:
‘‘(5) dividends with respect to which section
1(h)(11) or part VII of subchapter B applies,’’.
(f) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 2002.
SEC. 303. SUNSET OF TITLE.
All provisions of, and amendments made by, this title
shall not apply to taxable years beginning after December
31, 2012, and the Internal Revenue Code of 1986 shall
be applied and administered to such years as if such provi-
sions and amendments had never been enacted.
TITLE 
IV—CORPORATE 
ESTI-
MATED TAX PAYMENTS FOR
2003
SEC. 401. TIME FOR PAYMENT OF CORPORATE ESTIMATED
TAXES.
Notwithstanding section 6655 of the Internal Rev-
enue Code of 1986, 52 percent of the amount of any re-
quired installment of corporate estimated tax which is oth-
erwise due in September 2003 shall not be due until Octo-
ber 1, 2003.
Passed the House of Representatives May 9, 2003.
Attest:
Clerk.