PUBLIC LAW 98-369—JULY 18, 1984
98 STAT. 949
"(B) DETERMINATION OF BASIS AMOUNT.—For purposes of
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subparagraph (A), the basis amount determined under this subparagraph shall be an amount equal to the grossed-up basis determined under subparagraph (A) of paragraph (1) multiplied by a fraction— "(i) the numerator of which is the percentage of stock (by value) in the target corporation attributable to the purchasing corporation's nonrecently purchased stock, and "(ii) the denominator of which is 100 percent minus the percentage referred to in clause (i).
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"(4) GROSSED-UP BASIS.—For purposes of paragraph (1), the
grossed-up basis shall be an amount equal to the basis of the corporation's recently purchased stock, multiplied by a fraction— "(A) the numerator of which is 100 percent, minus the percentage of stock (by value) in the target corporation attributable to the purchasing corporation's nonrecently purchased stock, and "(B) the denominator of which is the percentage of stock (by value) in the target corporation attributable to the purchasing corporation's recently purchased stock. "(5) ALLOCATION AMONG ASSETS.—The amount determined under paragraphs (1) and (2) shall be allocated among the assets of the target corporation under regulations prescribed by the Secretary. "(6) DEFINITIONS OF RECENTLY PURCHASED STOCK AND NONRECENTLY PURCHASED STOCK.—For purposes of this subsection— "(A) RECENTLY PURCHASED STOCK.—The term 'recently
purchased stock' means any stock in the target corporation which is held by the purchasing corporation on the acquisition date and which was purchased by such corporation during the 12-month acquisition period. "(B) NONRECENTLY PURCHASED STOCK.—The term 'nonrecently purchased stock' means any stock in the target corporation which is held by the purchasing corporation on the acquisition date and which is not recently purchased stock." (2) COORDINATION WITH SECTION 333.—The last sentence of paragraph (1) of section 338(c) (relating to coordination with section 337 where purchasing corporation holds less than 100 percent of stock) is amended by striking out "such 1-year period" and inserting in lieu thereof "such 1-year period and section 333 does not apply to such liquidation".
26 USC 338.
(3) EXCEPTIONS TO DEEMED ELECTION RULE.—Paragraph (2) of
section 338(e) (relating to exceptions) is amended— (A) by striking out "(in whole or in part)" in subparagraph (B) and inserting in lieu thereof "wholly", (B) by inserting "or at the end of subparagraph (C), and (C) by striking out subparagraphs (D) and (E) and inserting in lieu thereof the following: "(D) such acquisition is described in regulations prescribed by the Secretary and meets such conditions as such regulations may provide." (4) TIME FOR MAKING ELECTION.—Paragraph (1) of section
338(g) (relating to election) is amended to read as follows:
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