118 STAT. 1587 PUBLIC LAW 108–357—OCT. 22, 2004 or entity if it knew, or reasonably should have known, of such conduct. Such penalty shall not exceed the gross income derived (or to be derived) from the conduct giving rise to the penalty and may be in addition to, or in lieu of, any suspension, disbarment, or censure of the representative.’’. (2) EFFECTIVE DATE.—The amendments made by this sub section shall apply to actions taken after the date of the enact ment of this Act. (b) TAX SHELTER OPINIONS, ETC.—Section 330 of such title 31 is amended by adding at the end the following new subsection: ‘‘(d) Nothing in this section or in any other provision of law shall be construed to limit the authority of the Secretary of the Treasury to impose standards applicable to the rendering of written advice with respect to any entity, transaction plan or arrangement, or other plan or arrangement, which is of a type which the Secretary determines as having a potential for tax avoidance or evasion.’’. Part II—Other Provisions SEC. 831. TREATMENT OF STRIPPED INTERESTS IN BOND AND PRE FERRED STOCK FUNDS, ETC. (a) IN GENERAL.—Section 1286 (relating to tax treatment of stripped bonds) is amended by redesignating subsection (f) as sub section (g) and by inserting after subsection (e) the following new subsection: ‘‘(f) TREATMENT OF STRIPPED INTERESTS IN BOND AND PRE FERRED STOCK FUNDS, ETC.—In the case of an account or entity substantially all of the assets of which consist of bonds, preferred stock, or a combination thereof, the Secretary may by regulations provide that rules similar to the rules of this section and 305(e), as appropriate, shall apply to interests in such account or entity to which (but for this subsection) this section or section 305(e), as the case may be, would not apply.’’. (b) CROSS REFERENCE.—Subsection (e) of section 305 is amended by adding at the end the following new paragraph: ‘‘(7) CROSS REFERENCE.— ‘‘For treatment of stripped interests in certain accounts or enti ties holding preferred stock, see section 1286(f).’’. (c) EFFECTIVE DATE.—The amendments made by this section shall apply to purchases and dispositions after the date of the enactment of this Act. SEC. 832. MINIMUM HOLDING PERIOD FOR FOREIGN TAX CREDIT ON WITHHOLDING TAXES ON INCOME OTHER THAN DIVI DENDS. (a) IN GENERAL.—Section 901 is amended by redesignating subsection (l) as subsection (m) and by inserting after subsection (k) the following new subsection: ‘‘(l) MINIMUM HOLDING PERIOD FOR WITHHOLDING TAXES ON GAIN AND INCOME OTHER THAN DIVIDENDS ETC.— ‘‘(1) IN GENERAL.—In no event shall a credit be allowed under subsection (a) for any withholding tax (as defined in subsection (k)) on any item of income or gain with respect to any property if— ‘‘(A) such property is held by the recipient of the item for 15 days or less during the 31 day period beginning 26 USC 305 note. 31 USC 330 note.
�
