PUBLIC LAW 99-514—OCT. 22, 1986
100 STAT. 2257
"(B) COORDINATION WITH EQUITY STRUCTURE SHIFTS.—For
purposes of determining whether an equity structure shift (or subsequent transaction) is an ownership change— "(i) LESS THAN 5-PERCENT SHAREHOLDERS.—Subpara-
graph (A) shall be applied separately with respect to each group of shareholders (immediately before such equity structure shift) of each corporation which was a party to the reorganization involved in such equity structure shift. "(ii) ACQUISITIONS
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OF STOCK.—Unless a
different
proportion is established, acquisitions of stock after such equity structure shift shall be treated as being made proportionately from all shareholders immediately before such acquisition. "(C) COORDINATION WITH OTHER OWNER SHIFTS.—Except as
provided in regulations, the rules of subparagraph (B) shall apply in determining whether there has been an owner shift involving a 5-percent shareholder and whether such shift (or subsequent transaction) results in an ownership change. "(h) SPECIAL RULES FOR BUILT-IN GAINS AND LOSSES AND SECTION
338 GAINS.—For purposes of this section— "(1) IN GENERAL.— "(A) NET UNREALIZED BUILT-IN GAIN.—
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"(i) IN GENERAL.—If the old loss corporation has a net unrealized built-in gain, the section 382 limitation for any recognition period taxable year shall be increased by the recognized built-in gains for such taxable year. "(ii) LIMITATION.—The increase under clause (i) for any recognition period taxable year shall not exceed— "(I) the net unrealized built-in gain, reduced by "(II) recognized built-in gains for prior years ending in the recognition period. "(B) NET UNREALIZED BUILT-IN LOSS.—
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"(i) IN GENERAL.—If the old loss corporation has a net unrealized built-in loss, the recognized built-in loss for any recognition period taxable year shall be subject to limitation under this section in the same manner as if such loss were a pre-change loss. "(ii) LIMITATION.—Clause (i) shall apply to recognized built-in losses for any recognition period taxable year only to the extent such losses do not exceed— "(I) the net unrealized built-in loss, reduced by "(II) recognized built-in losses for prior taxable years ending in the recognition period. "(C) SECTION 338 GAIN.—The section 382 limitation for any taxable year in which gain is recognized by reason of an election under section 338 shall be increased by the excess of— "(i) the amount of such gain, over "(ii) the portion of such gain taken into account in computing recognized built-in gains for such taxable year. "(2) RECOGNIZED BUILT-IN GAIN AND LOSS.— "(A) RECOGNIZED BUILT-IN GAIN.—The
term 'recognized built-in gain' means any gain recognized during the rec-
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