PUBLIC LAW 98-369—JULY 18, 1984
98 STAT. 703
in the loan, or other circumstances, the provisions of this section do not carry out the purposes of this section, adjust,, ments to the provisions of this section will be made to the extent necessary to carry out the purposes of this section, ^nj i<: "(B) regulations for the purpose of assuring that the positions of the borrower and lender are consistent as to the application (or nonapplication) of this section, and "(C) regulations exempting from the application of this section any class of transactions the interest arrangements of which have no significant effect on any Federal tax If • liability of the lender or the borrower. "(2) ESTATE TAX COORDINATION.—Under regulations prescribed by the Secretary, any loan which is made with donative '"' I intent and which is a term loan shall be taken into account for purposes of chapter 11 in a manner consistent with the provi- 26 USC 2001 et sions of subsection (b)." seq. (b) CLERICAL AMENDMENT.—The table of sections for subchapter C of chapter 80 is amended by adding at the end thereof the following new item: "Sec. 7872. Treatment of loans with below-market interest rates."
< (c) EFFECTIVE DATES.— (1) IN GENERAL.—Except as provided in paragraph (2), the amendments made by this section shall apply to— (A) term loans made after June 6, 1984, and (B) demand loans outstanding after June 6, 1984.
26 USC 7872 note. ^
(2) EXCEPTION FOR DEMAND LOANS OUTSTANDING ON JUNE 6, 1984, AND R E P A I D WITHIN 60 DAYS AFTER DATE OF ENACTMENT.—
The amendments made by this section shall not apply to any demand loan which— (A) was outstanding on June 6, 1984, and (B) was repaid before the date 60 days after the date of the enactment of this Act. ?
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(3) EXCEPTION FOR CERTAIN EXISTING LOANS TO CONTINUING
CARE FACILITIES.—Nothing in this subsection shall be construed to apply the amendments made by this section to any loan made before June 6, 1984, to a continuing care facility by a resident of such facility which is contingent on continued residence at such facility. (4) A P P U C A B L E FEDERAL RATE FOR PERIODS BEFORE JANUARY 1,
J
1985.—For periods before January 1, 1985, the applicable Federal rate under paragraph (2) of section 7872(f) of the Internal Revenue Code of 1954, as added by this section, shall be 10 Ante, p. 699. percent, compounded semiannually. (5) TREATMENT OF RENEGOTIATIONS, ETC.—For purposes of this subsection, any loan renegotiated, extended, or revised after June 6, 1984, shall be treated as a loan made after such date. (6) DEFINITION OF TERM AND DEMAND LOANS.—For purposes of
this subsection, the terms 'demand loan' and 'term loan' have the respective meanings given such terms by paragraphs (5) and (6) of section 7872(f) of the Internal Revenue Code of 1954, as added by this section, but the second sentence of such paragraph (5) shall not apply. SEC. 173. ELIGIBILITY FOR INCOME AVERAGING. (a) BASE PERIOD SHORTENED TO 3 YEARS.—Paragraph (2) of section 1302(c) (relating to definition of averagable income; related defini- 26 USC 1302.
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