Page:United States Statutes at Large Volume 113 Part 3.djvu/432

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113 STAT. 1950 PUBLIC LAW 106-170—DEC. 17, 1999 of such class shall be considered outstanding in order to compute the denominator for purpose of determining the applicable percentage of ownership).". 26 USC 856 note. (b) EFFECTIVE DATE. —The amendment made by this section shall apply to taxable years beginning after December 31, 2000. Subpart E—Modification of Earnings and Profits Rules SEC. 566. MODIFICATION OF EARNINGS AND PROFITS RULES. (a) RULES FOR DETERMINING WHETHER REGULATED INVESTMENT COMPANY HAS EARNINGS AND PROFITS FROM NON-RIC YEAR.— (1) IN GENERAL.—Subsection (c) of section 852 of the 26 USC 852. Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: "(3) DISTRIBUTIONS TO MEET REQUIREMENTS OF SUBSECTION (a)(2)(B). — Any distribution which is made in order to comply with the requirements of subsection (a)(2)(B)— "(A) shall be treated for purposes of this subsection and subsection (a)(2)(B) as made from earnings and profits which, but for the distribution, would result in a failure to meet such requirements (and allocated to such earnings on a first-in, first-out basis), and "(B) to the extent treated under subparagraph (A) as made from accumulated earnings and profits, shall not be treated as a distribution for purposes of subsection (b)(2)(D) and section 855.". (2) CONFORMING AMENDMENT.— Subparagraph (A) of section 26 USC 857. 857(d)(3) of such Code is amended to read as follows: "(A) shall be treated for purposes of this subsection and subsection (a)(2)(B) as made from earnings and profits which, but for the distribution, would result in a failure to meet such requirements (and allocated to such earnings on a first-in, first-out basis), and". (b) CLARIFICATION OF APPLICATION OF REIT SPILLOVER DIVI- DEND RULES TO DISTRIBUTIONS TO MEET QUALIFICATION REQUIRE- MENT. —Subparagraph (B) of section 857(d)(3) of such Code is amended by inserting before the period "and section 858". (c) APPLICATION OF DEFICIENCY DIVIDEND PROCEDURES.— Paragraph (1) of section 852(e) of such Code is amended by adding at the end the following new sentence: "If the determination under subparagraph (A) is solely as a result of the failure to meet the requirements of subsection (a)(2), the preceding sentence shall also apply for purposes of applying subsection (a)(2) to the non-RIC year and the amount referred to in paragraph (2)(A)(i) shall be the portion of the accumulated earnings and profits which resulted in such failure.". 26 USC 852 note. (d) EFFECTIVE DATE.—The amendments made by this section shall apply to distributions after December 31, 2000. Subpart F—Modification of Estimated Tax Rules SEC. 571. MODIFICATION OF ESTIMATED TAX RULES FOR CLOSELY HELD REAL ESTATE INVESTMENT TRUSTS. (a) IN GENERAL. —Subsection (e) of section 6655 of the Internal 26 USC 6655. Revenue Code of 1986 (relating to estimated tax by corporations) is amended by adding at the end the following new paragraph: