100 STAT. 2730
PUBLIC LAW 99-514—OCT. 22, 1986 were not properly includible in the gross income of the trust for periods before the date of such termination."
(b) DISTRIBUTIONS IN REDEMPTION OF STOCK TO PAY GENERATIONSKIPPING TRANSFER TAXES.—Subsection (d) of section 303 is amended
to read as follows: "(d) SPECIAL RULES FOR GENERATION-SKIPPING TRANSFERS.—Where
stock in a corporation is the subject of a generation-skipping transfer (within the meaning of section 2611(a)) occurring at the same time as and as a result of the death of an individual— "(1) the stock shall be deemed to be included in the gross estate of such individual; "(2) taxes of the kind referred to in subsection (a)(1) which are imposed because of the generation-skipping transfer shall be treated as imposed because of such individual's death (and for this purpose the tax imposed by section 2601 shall be treated as an estate tax); "(3) the period of distribution shall be measured from the date of the generation-skipping transfer; and "(4) the relationship of stock to the decedent's estate shall be measured with reference solely to the amount of the generationskipping transfer." (C) AVAILABILITY OF ALTERNATE VALUATION ELECTION.—
(1) IN GENERAL.—Paragraph (2) of section 2032(c) (relating to election must decrease gross estate and estate tax) is amended to read as follows: "(2) the sum of the tax imposed by this chapter and the tax imposed by chapter 13 with respect to property includible in the decedent's gross estate (reduced by credits allowable against such taxes)." (2) CONFORMING AMENDMENT.—Subsection (g) of section 2013
is hereby repealed. (d) GENERATION-SKIPPING TAX TREATED AS TAXABLE GIFT.—
(1) IN GENERAL.—Subchapter B of chapter 12 is amended by inserting after section 2514 the following new section: "SEC. 2515. TREATMENT OF GENERATION-SKIPPING TRANSFER TAX.
"In the case of any taxable gift which is a direct skip (within the meaning of chapter 13), the amount of such gift shall be increased by the amount of any tax imposed on the transferor under chapter 13 with respect to such gift." (2) CLERICAL AMENDMENT.—The table of sections for subchapter B of chapter 12 is amended by inserting after the item relating to section 2514 the following new item: "Sec. 2515. Treatment of generation-skipping transfer tax." (e) EXTENSION OF TIME FOR PAYMENT OF TAX ON CERTAIN DIRECT
SKIPS.—Section 6166 is amended by redesignating subsections (i) and (j) as subsections (j) and (k), respectively, and by inserting after subsection (h) the following new subsection: "(i) SPECIAL RULE FOR CERTAIN DIRECT SKIPS.—To the extent that an interest in a closely held business is the subject of a direct skip (within the meaning of section 2612(c)) occurring at the same time as and as a result of the decedent's death, then for purposes of this section any tax imposed by section 2601 on the transfer of such interest shall be treated as if it were additional tax imposed by section 2001." . i ^ ^
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