1620
PUBLIC LAW 86-8e6-SEPT. 2, 1968
[72 STAT
"(10) OWNERSHIP OF STOCK.—For purposes of this subsection (other than paragraph (8)), the ownership of stock shall be determined in the manner prescribed in subsection (d). "(11)
26 USC 358.
26 USC 393. 26 USC 391.
MENTS.—In determining whether or not any corporation is a collapsible corporation within the meaning of subsection (b), the fact that such corporation, or such corporation with respect to any of its shareholders, does not meet the requirements of paragraph (1), (2), (3), or (4) of this subsection shall not be taken into account, and such determination, in the case of a corporation which does not meet such requirements, shall be made as if this subsection had not been enacted." (b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply with respect to taxable years beginning after December 31, 1957, but only with respect to sales, exchanges, and distributions after the date of the enactment of this Act. SEC. 21. PROPERTY RECEIVED IN CERTAIN CORPORATE ORGANIZATIONS AND REORGANIZATIONS. (a) BASIS.—Section 358(a)(1)(A) (relating to decrease in basis to distributees of property received in certain corporate organizations and reorganizations) is amended by striking out "and" at the end of the clause (i), and by adding after clause (ii) the following new clause: "(iii) the amount of loss to the taxpayer which was recognized on such exchange, and", (b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply as provided in section 393 of the Internal Revenue Code of 1954 as if the clause (iii) added by such amendment had been included in such Code at the time of its enactment. SEC. 22. CERTAIN ACQUISITIONS OF STOCK. (a) TRANSITIONAL RULES.—Section 391 (relating to effective date of certain provisions of the Internal Revenue Code of 1954 relating to distributions by corporations) is amended by adding at the end thereof the following new sentence: "In the case of— "(1) any acquisition of stock described in section 304 which occurred before June 22, 1954, and "(2) any acquisition of stock described in such section which occurred on or after June 22, 1954, and on or before December 31, 1958, pursuant to a contract entered into before June 22, 1954, the extent to which the property received in return for such acquisition shall be treated as a dividend shall be determined as if the Internal Revenue Code of 1939 continued to apply in respect of such acquisition and as if this Code had not been enacted." (b) EFFECTIVE DATE.—The third sentence of section 391 of the Internal Revenue Code of 1954, as added by subsection (a) of this section, shall apply as if included in such section on the date of the enactment of such Code. SEC. 23. TAXATION OF EMPLOYEE ANNUITIES. (a)
26 USC 403.
CORPORATIONS AND SHAREHOLDERS NOT MEETING REQUIRE-
ANNUITY
CONTRACTS P U R C H A S E D BY CERTAIN
TAX-EXEMPT
ORGANIZATIONS.—Section 403 (relating to taxation of employee annuities) is amended by redesignating subsection (b) as subsection (c), and by inserting after subsection (a) the following new subsection: "(b) TAXABILITY OF BENEFICIARY UNDER A N N U I T Y PURCHASED BY SECTION 501 (c)(3) ORGANIZATION.— " (1) GENERAL RULE.—If—
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" (A) an annuity contract is purchased for an employee by an employer described in section 501(c)(3) which is exempt from tax under section 501(a),
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