Page:United States Statutes at Large Volume 104 Part 2.djvu/871

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PUBLIC LAW 101-508 —NOV. 5, 1990 104 STAT. 1388-463 "(A) regulations to prevent the avoidance of the purposes of this subsection through the use of related persons, intermediaries, pass-thru entities, options, or other arrangements, and "(B) regulations modifying the definition of the term 'purchase." (b) TECHNICAL AMENDMENT. —Subsection (c) of section 361 is amended by adding at the end thereof the following new paragraph: "(5) CROSS REFERENCE. — "For provision providing for recognition of gain in certain distributions, see section 355(d)." (c) EFFECTIVE DATE.— 26 USC 355 note. (1) IN GENERAL.—Except as otherwise provided in this subsection, the amendments made by this section shall apply to distributions after October 9, 1990. (2) BINDING CONTRACT EXCEPTION. —The amendments made by this section shall not apply to any distribution pursuant to a written binding contract in effect on October 9, 1990, and at all times thereafter before such distribution. (3) TRANSITIONAL RULES.—For purposes of subparagraphs (A) and (B) of section 355(d)(3) of the Internal Revenue Code of 1986 (as amended by subsection (a)), an acquisition shall be treated as occurring on or before October 9, 1990, if— (A) such acquisition is pursuant to a written binding contract in effect on October 9, 1990, and at all times thereafter before such acquisition, (B) such acquisition is pursuant to a transaction which was described in documents filed with the Securities and Exchange Commission on or before October 9, 1990, or (C) such acquisition is pursuant to a transaction— (i) the material terms of which were described in a written public announcement on or before October 9, 1990, (ii) which was the subject of a prior filing with the Securities and Exchange Commission, and (iii) which is the subject of a subsequent filing with the Securities and Exchange Commission before January 1, 1991. SEC. 11322. MODIFICATIONS TO REGULATIONS ISSUED UNDER SECTION 305(c). (a) GENERAL RULE.— Subsection (c) of section 305 (relating to certain transactions treated as distributions) is amended by adding at the end thereof the following new sentence: "Regulations prescribed under the preceding sentence shall provide that— "(1) where the issuer of stock is required to redeem the stock at a specified time or the holder of stock has the option to require the issuer to redeem the stock, a redemption premium resulting from such requirement or option shall be treated as reasonable only if the amount of such premium does not exceed the amount determined under the principles of section 1273(a)(3), "(2) a redemption premium shall not fail to be treated as a distribution (or series of distributions) merely because the stock is callable, and "(3) in any case in which a redemption premium is treated as a distribution (or series of distributions), such premium shall be