PUBLIC LAW 105-206—JULY 22, 1998 112 STAT. 827 TITLE VII—REVENUE PROVISIONS SEC. 7001. CLARIFICATION OF DEDUCTION FOR DEFERRED COM- PENSATION. (a) IN GENERAL. —Section 404(a) (relating to deduction for contributions of an employer to an employee's trust or annuity plan and compensation under a deferred-payment plan) is amended by adding at the end the following new paragraph: "(11) DETERMINATIONS RELATING TO DEFERRED COMPENSA- TION.—For purposes of determining under this section— "(A) whether compensation of an employee is deferred compensation; and "(B) when deferred compensation is paid, no amount shall be treated as received by the employee, or paid, until it is actually received by the employee.". (b) EFFECTIVE DATE. — (1) IN GENERAL. —The amendment made by subsection (a) shall apply to taxable years ending after the date of the enactment of this Act. (2) CHANGE IN METHOD OF ACCOUNTING.— In the case of any taxpayer required by the amendment made by subsection (a) to change its method of accounting for its first taxable year ending after the date of the enactment of this Act— (A) such change shall be treated as initiated by the taxpayer, (B) such change shall be treated as made with the consent of the Secretary of the Treasury; and (C) the net amount of the adjustments required to be taken into account by the taxpayer under section 481 of the Internal Revenue Code of 1986 shall be taken into account ratably over the 3-taxable year period beginning with such first taxable year. SEC. 7002. TERMINATION OF EXCEPTION FOR CERTAIN REAL ESTATE INVESTMENT TRUSTS FROM THE TREATMENT OF STAPLED ENTITIES, (a) IN GENERAL.— Notwithstanding paragraph (3) of section 136(c) of the Tax Reform Act of 1984 (relating to stapled stock; stapled entities), the REIT gross income provisions shall be applied by treating the activities and gross income of members of the stapled REIT group properly allocable to any nonqualified real property interest held by the exempt REIT or any stapled entity which is a member of such group (or treated under subsection (c) as held by such REIT or stapled entity) as the activities and gross income of the exempt REIT in the same manner as if the exempt REIT and such group were one entity. (b) NONQUALIFIED REAL PROPERTY INTEREST. — For purposes of this section— (1) IN GENERAL.— The term "nonqualified real property interest" means, with respect to any exempt REIT, any interest in real property acquired after March 26, 1998, by the exempt REIT or any stapled entity. (2) EXCEPTION FOR BINDING CONTRACTS, ETC. —Such term shall not include any interest in real property acquired after March 26, 1998, by the exempt REIT or any stapled entity if— 26 USC 404 note. Applicability. 26 USC 269B note. Applicability.
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