119 STAT. 2622
26 USC 856.
26 USC 856 note.
VerDate 14-DEC-2004
07:21 Oct 30, 2006
Jkt 039194
PUBLIC LAW 109–135—DEC. 21, 2005 described in the schedule specified in subparagraph (A)(i) for the period specified in clause (ii) by the highest rate of tax specified in section 11. ‘‘(ii) PERIOD.—For purposes of clause (i)(II), the period described in this clause is the period beginning on the first date that the failure to satisfy the requirements of such paragraph (4) occurs as a result of the ownership of such assets and ending on the earlier of the date on which the trust disposes of such assets or the end of the first quarter when there is no longer a failure to satisfy such paragraph (4). ‘‘(iii) ADMINISTRATIVE PROVISIONS.—For purposes of subtitle F, the taxes imposed by this subparagraph shall be treated as excise taxes with respect to which the deficiency procedures of such subtitle apply.’’. (2) Subsection (m) of section 856 is amended by adding at the end the following new paragraph: ‘‘(6) TRANSITION RULE.— ‘‘(A) IN GENERAL.—Notwithstanding paragraph (2)(C), securities held by a trust shall not be considered securities held by the trust for purposes of subsection (c)(4)(B)(iii)(III) during any period beginning on or before October 22, 2004, if such securities— ‘‘(i) are held by such trust continuously during such period, and ‘‘(ii) would not be taken into account for purposes of such subsection by reason of paragraph (7)(C) of subsection (c) (as in effect on October 22, 2004) if the amendments made by section 243 of the American Jobs Creation Act of 2004 had never been enacted. ‘‘(B) RULE NOT TO APPLY TO SECURITIES HELD AFTER MATURITY DATE.—Subparagraph (A) shall not apply with respect to any security after the later of October 22, 2004, or the latest maturity date under the contract (as in effect on October 22, 2004) taking into account any renewal or extension permitted under the contract if such renewal or extension does not significantly modify any other terms of the contract. ‘‘(C) SUCCESSORS.—If the successor of a trust to which this paragraph applies acquires securities in a transaction to which section 381 applies, such trusts shall be treated as a single entity for purposes of determining the holding period of such securities under subparagraph (A).’’. (3) Subparagraph (E) of section 857(b)(2) is amended by striking ‘‘section 856(c)(7)(B)(iii), and section 856(g)(1).’’ and inserting ‘‘section 856(c)(7)(C), and section 856(g)(5)’’. (4) Subsection (g) of section 243 of the American Jobs Creation Act of 2004 is amended to read as follows: ‘‘(g) EFFECTIVE DATES.— ‘‘(1) SUBSECTIONS (a) AND (b).—The amendments made by subsections (a) and (b) shall apply to taxable years beginning after December 31, 2000. ‘‘(2) SUBSECTIONS (c) AND (e).—The amendments made by subsections (c) and (e) shall apply to taxable years beginning after the date of the enactment of this Act.
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