PUBLIC LAW 101-508 —NOV. 5, 1990 104 STAT. 1388-493 "(B) EXCEPTIONS.—The term 'distribution right' does not include— "(i) a right to distributions with respect to any junior equity interest {as defined in subsection (a)(4)(B)(i)), "(ii) any liquidation, put, call, or conversion right, or "(iii) any right to receive any guaranteed payment described in section 707(c) of a fixed amount. "(2) LIQUIDATION, ETC. RIGHTS. — "(A) IN GENERAL.— The term 'liquidation, put, call, or conversion right' means any liquidation, put, call, or conversion right, or any similar right, the exercise or nonexercise of which affects the value of the transferred interest. "(B) EXCEPTION FOR FIXED RIGHTS. — "(i) IN GENERAL.— The term 'liquidation, put, call, or conversion right' does not include any right which must be exercised at a specific time and at a specific amount. "(ii) TREATMENT OF CERTAIN RIGHTS. — If a right is assumed to be exercised in a particular manner under subsection (a)(3)(B), such right shall be treated as so exercised for purposes of clause (i). " (C) EXCEPTION FOR CERTAIN RIGHTS TO CONVERT. —The term 'liquidation, put, call, or conversion right' does not include any right which— "(i) is a right to convert into a fixed number (or a fixed percentage) of shares of the same class of stock in a corporation as the transferred stock in such corporation under subsection (a)(1) (or stock which would be of the same class but for nonlapsing differences in voting power), "(ii) is nonlapsing, "(iii) is subject to proportionate adjustments for splits, combinations, reclassifications, and similar changes in the capital stock, and "(iv) is subject to adjustments similar to the adjustments under subsection (d) for accumulated but unpaid distributions. A rule similar to the rule of the preceding sentence shall apply for partnerships. " (3) QUALIFIED PAYMENT. — "(A) IN GENERAL.—Except as otherwise provided in this paragraph, the term 'qualified payment' means any dividend payable on a periodic basis under any cumulative preferred stock (or a comparable payment under any partnership interest) to the extent that such dividend (or comparable payment) is determined at a fixed rate. "(B) TREATMENT OF VARIABLE RATE PAYMENTS. — For pur- . poses of subparagraph (A), a payment shall be treated as fixed as to rate if such payment is determined at a rate which bears a fixed relationship to a specified market interest rate. "(C) ELECTIONS. — " (i) WAIVER OF QUALIFIED PAYMENT TREATMENT.— A transferor or applicable family member may elect with respect to payments under any interest specified in
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