100 STAT. 2800
PUBLIC LAW 99-514—OCT. 22, 1986 5*t f
subparagraph (B) (and subparagraph (C) to the extent it relates to subparagraph (B)) shall be applied on the basis of a holding period requirement shorter than 6 months; except that such shorter holding period requirement shall not be shorter than the greater of 31 days or the period between regular distributions of exempt-interest dividends." (5) The paragraph heading for paragraph (4) of section 852(b)
is amended by striking out "LESS THAN 31 DAYS" and inserting in
lieu thereof "6 MONTHS OR LESS". (6) The amendments made by this subsection shall apply to stock with respect to which the taxpayer's holding period begins after March 28, 1985. (d) AMENDMENT RELATED TO SECTION 58 OF THE ACT.—
(1) IN GENERAL.—Paragraph (1) of section 562(b) (relating to distributions in liquidation) is amended by adding at the end thereof the following new sentence: "Except to the extent provided in regulations, the preceding sentence shall not apply in the case of any mere holding or investment company which is not a regulated investment company." (2) EFFECTIVE DATE.—The amendment made by paragraph (1) shall apply to distributions after September 27, 1985. (e) AMENDMENTS RELATED TO SECTION 60 OF THE ACT.— (1) TREATMENT OF CERTAIN REDEMPTION AND LIQUIDATION
RIGHTS.—Subparagraph (C) of section 1504(a)(4) (relating to certain preferred stock not treated as stock) is amended to read as follows: "(C) has redemption and liquidation rights which do not exceed the issue price of such stock (except for a reasonable redemption or liquidation premium), and". (2) TREATMENT OF CERTAIN CORPORATIONS AFFILIATED ON JUNE
22, 1984.—Paragraph (2) of section 60(b) of the Tax Reform Act of 1984 (relating to special rule for corporations affiliated on June 22, 1984) is amended by adding at the end thereof the following new sentence: "The preceding sentence shall cease to apply as of the first day after June 22, 1984, on which such corporation does not qualify as a member of such group under section 1504(a) of the Internal Revenue Code of 1954 (as in effect on the day before the date of the enactment of this Act)." (3) TREATMENT OF CERTAIN SELL-DOWNS AFTER JUNE 22, 1984.—
Paragraph (3) of section 600)) of the Tax Reform Act of 1984 (relating to special rule not to apply to certain sell-downs after June 22, 1984) is amended to read as follows: "(3) SPECIAL RULE NOT TO APPLY TO CERTAIN SELL-DOWNS AFTER JUNE 22, 1984.—If—
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"(A) the requirements of paragraph (2) are satisfied with respect to a corporation, "(B) more than a de minimis amount of the stock of such corporation— "(i) is sold or exchanged (including in a redemption), or "(ii) is issued, after June 22, 1984 (other than in the ordinary course of business), and "(C) the requirements of the amendment made by subsection (a) are not satisfied after such sale, exchange, or issuance,
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