Text: H.R.5454 — 101st Congress (1989-1990)All Information (Except Text)

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HR 5454 IH
101st CONGRESS
2d Session
 H. R. 5454
To make technical corrections related to the Revenue Reconciliation Act of
1989, and other recent tax legislation.
IN THE HOUSE OF REPRESENTATIVES
August 3, 1990
Mr. ROSTENKOWSKI (for himself and Mr. ARCHER) introduced the following bill;
which was referred to the Committee on Ways and Means
A BILL
To make technical corrections related to the Revenue Reconciliation Act of
1989, and other recent tax legislation.
  Be it enacted by the Senate and House of Representatives of the United
  States of America in Congress assembled,
 SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.
  (a) SHORT TITLE- This Act may be cited as the `Technical Corrections Act
  of 1990'.
  (b) AMENDMENT OF 1986 CODE- Except as otherwise expressly provided,
  whenever in this Act an amendment or repeal is expressed in terms of an
  amendment to, or repeal of, a section or other provision, the reference
  shall be considered to be made to a section or other provision of the
  Internal Revenue Code of 1986.
SEC. 2. AMENDMENTS RELATED TO REVENUE RECONCILIATION ACT OF 1989.
  (a) AMENDMENTS RELATED TO SECTION 7108-
  (1) Paragraph (2) of section 42(o) is amended to read as follows:
  `(2) EXCEPTION FOR BOND-FINANCED BUILDINGS IN PROGRESS- For purposes of
  paragraph (1)(B), a building shall be treated as placed in service before
  1991 if--
  `(A) the bonds with respect to such building are issued before 1991,
  `(B) the taxpayer's basis in the project (of which the building is a part)
  as of December 31, 1990, is more than 10 percent of the taxpayer's reasonably
  expected basis in such project as of December 31, 1992, and
  `(C) such building is placed in service before January 1, 1993.'
  (2)(A) Paragraph (2) of section 42(c) is amended by adding at the end thereof
  the following new sentence: `Such term does not include any building with
  respect to which moderate rehabilitation assistance is provided, at any
  time during the compliance period, under section 8(e)(2) of the United
  States Housing Act of 1937.'
  (B) Paragraph (1) of section 42(b) is amended by striking the last sentence.
  (3) Subclause (I) of section 42(d)(5)(C)(ii) is amended--
  (A) by inserting `which is designated by the Secretary of Housing and
  Urban Development and, for the most recent year for which census data are
  available on household income in such tract,' after `census tract', and
  (B) by inserting before the period `for such year'.
  (4)(A) Clause (i) of section 42(g)(2)(D) is amended by inserting before
  the period `and such unit continues to be rent-restricted'.
  (B) In the case of a building to which (but for this subparagraph) the
  amendment made by subparagraph (A) does not apply, such amendment shall
  apply to--
  (i) determinations of qualified basis for taxable years beginning after
  the date of the enactment of this Act, and
  (ii) determinations of qualified basis for taxable years beginning on or
  before such date except that determinations for such taxable years shall
  be made without regard to any reduction in gross rent after August 3,
  1990, for any period before August 4, 1990.
  (5) Clause (ii) of section 42(g)(2)(D) is amended by adding at the end
  thereof the following new sentence: `In the case of a project described in
  section 142(d)(4)(B), the preceding sentence shall be applied by substituting
  `170 percent' for `140 percent'.'
  (6)(A) Subparagraph (A) of section 42(g)(3) is amended by striking `the
  12-month period beginning on the date the building is placed in service'
  and inserting `the 1st year of the credit period for such building'.
  (B) In the case of a building to which the amendment made by subparagraph
  (A) does not apply, the period specified in section 42(g)(3)(A) of the
  Internal Revenue Code of 1986 (as in effect before the amendment made by
  subparagraph (A)) shall not expire before the close of the taxable year
  following the taxable year in which the building is placed in service.
  (7)(A) The second sentence of section 42(h)(3)(C) is amended by striking
  `the amount described in clause (i)' and inserting `the sum of the amounts
  described in clauses (i) and (iii)'.
  (B) Subclause (II) of section 42(h)(3)(D)(ii) is amended by striking `the
  amount described in clause (i)' and inserting `the sum of the amounts
  described in clauses (i) and (iii)'.
  (8)(A) Clause (i) of section 42(h)(6)(B) is amended by inserting before
  the comma `and which prohibits the actions described in subclauses (I)
  and (II) of subparagraph (E)(ii)'.
  (B) Clause (ii) of section 42(h)(6)(B) is amended by striking `requirement'
  and inserting `requirement and prohibitions'.
  (9)(A) Subparagraph (B) of section 42(h)(6) is amended by redesignating
  clauses (iii) and (iv) as clauses (iv) and (v), respectively, and by
  inserting after clause (ii) the following new clause:
  `(iii) which prohibits the disposition to any person of any portion of
  the building to which such agreement applies unless all of the building
  to which such agreement applies is disposed of to such person,'.
  (B) Paragraph (6) of section 42(h) is amended by striking subparagraph
  (J) and by redesignating subparagraphs (K) and (L) as subparagraphs (J)
  and (K), respectively.
  (C) Subclause (II) of section 42(h)(6)(E)(ii) is amended by inserting
  before the period `not otherwise permitted under this section'.
  (D) Subparagraph (F) of section 42(h)(6) is amended by inserting `the
  nonlow-income portion of the building for fair market value and' before
  `the low-income portion'.
  (10) Subclause (I) of section 42(h)(6)(E)(i) is amended by inserting before
  the comma `unless the Secretary determines that such acquisition is part
  of an arrangement with the taxpayer a purpose of which is to terminate
  such period'.
  (11) Paragraph (8) of section 42(i) is redesignated as paragraph (7).
  (12) Paragraph (2) of section 7108(r) of the Revenue Reconciliation Act
  of 1989 is amended by inserting before the period `but only with respect
  to bonds issued after such date'.
  (13) Paragraph (6) of section 7108(r) of the Revenue Reconciliation Act
  of 1989 is amended by inserting `after' after `issued'.
  (b) AMENDMENT RELATED TO SECTION 7110- Paragraph (2) of section 7110(a)
  of the Revenue Reconciliation Act of 1989 is amended by adding at the end
  thereof the following new subparagraph:
  `(C) Section 41 of such Code shall not apply to any taxable year beginning
  after September 30, 1990.'
  (c) AMENDMENTS RELATED TO SECTION 7202-
  (1) Subparagraph (A) of section 163(e)(5) is amended by striking the last
  sentence and inserting the following:
`For purposes of this paragraph, rules similar to the rules of subsection
(i)(3)(B) shall apply in determining the amount of the original issue discount
and when the original issue discount is paid.'
  (2) Paragraph (3) of section 163(i) is amended--
  (A) by striking `(or stock)' each place it appears in subparagraph (B), and
  (B) by adding at the end thereof the following new sentence:
`Except for purposes of paragraph (1)(B), any reference to an obligation in
subparagraph (B) of this paragraph shall be treated as including a reference
to stock.'
  (d) AMENDMENTS RELATED TO SECTION 7210-
  (1) Subparagraph (C) of section 163(j)(2) is amended by striking `less such'
  and inserting `reduced (but not below zero) by such'.
  (2) Clause (ii) of section 163(j)(2)(A) is amended by striking `and on
  such other days' and inserting `or on any other day'.
  (e) AMENDMENTS RELATED TO SECTION 7211- Clause (iii) of section 172(b)(1)(M)
  is amended--
  (1) by striking `a C corporation' in the material preceding subclause (I),
  (2) by striking `which acquires' in subclause (I) and inserting `a C
  corporation which acquires',
  (3) by striking `a corporation' in subclause (II) and inserting `a C
  corporation', and
  (4) by striking `any successor corporation' in subclause (III) and inserting
  `any C corporation which is a successor'.
  (f) AMENDMENTS RELATED TO SECTION 7301-
  (1) Paragraph (2) of section 4978B(e) is amended to read as follows:
  `(2) SECTION 133 SECURITIES- The term `section 133 securities' means
  employer securities acquired by an employee stock ownership plan in a
  transaction to which section 133 applied.'
  (2) Subsection (d) of section 4978B is amended by adding at the end thereof
  the following new paragraph:
  `(4) COORDINATION WITH OTHER TAXES- This section shall not apply to any
  disposition which is subject to tax under section 4978 or section 4978A
  (as in effect on the day before the date of enactment of this section).'
  (g) AMENDMENT RELATED TO SECTION 7401- Paragraph (2) of section 6038(e) is
  amended by adding at the end thereof the following new sentence: `In the case
  of a specified foreign corporation (as defined in section 898), the taxable
  year of such corporation shall be treated as its annual accounting period.'.
  (h) AMENDMENT RELATED TO SECTION 7601- Effective with respect to transfers
  after August 3, 1990, paragraph (3) of section 1031(f) is amended by striking
  `section 267(b)' and inserting `section 267(b) or 707(b)(1)'.
  (i) AMENDMENT RELATED TO SECTION 7622- Paragraph (4) of section 1253(d)
  is amended by striking `or any period of amortization under this section'
  and inserting `under this section or any period of amortization under
  this subtitle'.
  (j) AMENDMENTS RELATED TO SECTION 7652-
  (1) Subclause (II) of section 148(f)(4)(B)(i) is amended by striking
  `6 months' and all that follows and inserting `6 months.'
  (2) The last sentence of clause (i) of section 148(f)(4)(B) is amended by
  striking `replacement fund' and all that follows and inserting `replacement
  fund, and gross proceeds which arise after such 6 months and which were not
  reasonably anticipated as of the date of issuance, shall not be considered
  gross proceeds for purposes of subclause (I) only.'
  (3) Paragraph (4) of section 148(f) is amended--
  (B) by redesignating subparagraph (C) and (D) as subparagraphs (D) and
  (E), respectively, and
  (C) by inserting after subparagraph (B) the following new subparagraph:
  `(C) Exception from rebate for certain proceeds to be used to finance
  construction expenditures-
  `(i) IN GENERAL- In the case of a construction issue, paragraph (2)
  shall not apply to the available construction proceeds of such issue if
  the spending requirements of clause (ii) are met.
  `(ii) SPENDING REQUIREMENTS- The spending requirements of this clause are
  met if at least--
  `(I) 10 percent of the available construction proceeds of the construction
  issue are spent for the government purposes of the issue within the 6-month
  period beginning on the date of the bonds are issued,
  `(II) 45 percent of such proceeds are spent for such purposes within the
  1-year period beginning on such date,
  `(III) 75 percent of such proceeds are spent for such purposes within the
  18-month period beginning on such date, and
  `(IV) 100 percent of such proceeds are spent for such purposes within the
  2-year period beginning on such date.
  `(iii) EXCEPTION FOR REASONABLE RETAINAGE- The spending requirement of
  clause (ii)(IV) shall be treated as met if--
  `(I) such requirement would be met at the close of such 2-year period
  but for a reasonable retainage (not exceeding 5 percent of the available
  construction proceeds of the construction issue), and
  `(II) 100 percent of the available construction proceeds of the construction
  issue are spent for the governmental purposes of the issue within the
  3-year period beginning on the date the bonds are issued.
  `(iv) CONSTRUCTION ISSUE- For purposes of this subparagraph, the term
  `construction issue' means any issue if--
  `(I) at least 75 percent of the available construction proceeds of such
  issue are to be used for construction expenditures with respect to property
  which is to be owned by a governmental unit or a 501(c)(3) organization, and
  `(II) all of the bonds which are part of such issue are qualified 501(c)(3)
  bonds, bonds which are not private activity bonds, or private activity
  bonds issued to finance property to be owned by a governmental unit or a
  501(c)(3) organization.
For purposes of this subparagraph, the term `construction' includes
reconstruction and rehabilitation, and rules similar to the rules of section
142(b)(1)(B) shall apply.
  `(v) PORTIONS OF ISSUES USED FOR CONSTRUCTION- If--
  `(I) all of the construction expenditures to be financed by an issue are
  to be financed from a portion thereof, and
  `(II) the issuer elects to treat such portion as a construction issue for
  purposes of this subparagraph,
then, for purposes of this subparagraph and subparagraph (B), such portion
shall be treated as a separate issue.
  `(vi) AVAILABLE CONSTRUCTION PROCEEDS- For purposes of this subparagraph--
  `(I) IN GENERAL- The term `available construction proceeds' means the issue
  price (within the meaning of sections 1273 and 1274) of the construction
  issue, increased by earnings on the issue price, earnings on any reasonably
  required reserve or replacement fund not funded from the issue, and earnings
  on all of the foregoing earnings, and reduced by the amount of the issue
  price in any reasonably required reserve or replacement fund.
  `(II) EARNINGS ON RESERVE INCLUDED ONLY FOR CERTAIN PERIODS- The term
  `available construction proceeds' shall not include amounts earned on any
  reasonably required reserve or replacement fund after the earlier of the
  close of the 2-year period described in clause (ii) or, if the election
  under clause (ix) is made, the date of such election.
  `(III) REPAYMENTS ON ACQUIRED PURPOSE OBLIGATIONS EXCLUDED- The term
  `available construction proceeds' shall not include repayments on any
  obligation required to carry out the governmental purposes of the issue
  and shall not include earnings on such repayments.
  `(IV) ELECTION TO REBATE ON EARNINGS ON RESERVE- At the election of the
  issuer, the term `available construction proceeds' shall not include
  earnings on any reasonably required reserve or replacement fund.
  `(vii) Election to pay penalty in lieu of rebate-
  `(I) IN GENERAL- At the election of the issuer, paragraph (2) shall not
  apply to available construction proceeds which do not meet the spending
  requirements of clause (ii) if the issuer pays a penalty, with respect to
  each 6-month period after the date the bonds were issued, equal to 1 1/2
  percent of the amount of the available construction proceeds of the issue
  which, as of the close of such 6-month period, is not spent as required
  by clause (ii).
  `(II) TERMINATION- The penalty imposed by this clause shall cease to apply
  only as provided in clause (viii) or after the latest maturity date of
  any bond in the issue (including any refunding bond with respect thereto).
  `(III) PAYMENTS OF PRINCIPAL NOT TO AFFECT REQUIREMENTS- For purposes of
  this clause and clause (viii), payments of principal on the bonds which
  are part of the construction issue shall not be treated as an expenditure
  of the available construction proceeds of the issue.
  `(viii) ELECTION TO TERMINATE 1 1/2  PERCENT PENALTY- At the election
  of the issuer, the penalty under clause (vii) shall not apply to any
  6-month period after the initial temporary period under subsection (c)
  if the requirements of subclauses (I), (II), and (III) are met.
  `(I) 3 PERCENT PENALTY- The requirement of this subclause is met if
  the issuer pays a penalty equal to 3 percent of the amount of available
  construction proceeds of the issue which is not spent for the governmental
  purposes of the issue as of the close of such initial temporary period
  multiplied by the number of years (including fractions thereof) in the
  initial temporary period.
  `(II) YIELD RESTRICTION AT CLOSE OF TEMPORARY PERIOD- The requirement of
  this subclause is met if the amount of the available construction proceeds
  of the issue which is not spent for the governmental purposes of the issue
  as of the close of such initial temporary period is invested at a yield
  not exceeding the yield on the issue.
  `(III) REDEMPTION OF BONDS AT EARLIEST CALL DATE- The requirement of this
  subclause is met if the amount of the available construction proceeds of
  the issue which is not spent for the governmental purposes of the issue
  as of the earliest date on which bonds may be redeemed is used to redeem
  bonds on such date.
  `(ix) ELECTION TO TERMINATE 1 1/2  PERCENT PENALTY BEFORE END OF TEMPORARY
  PERIOD- If--
  `(I) the construction to be financed by a construction issue is substantially
  completed before the end of the initial temporary period,
  `(II) the issuer identifies an amount of available construction proceeds
  which will not be spent for the governmental purposes of the issue,
  `(III) the issuer has made the election under clause (viii), and
  `(IV) the issuer makes an election under this clause before the close of
  the initial temporary period and not later than 90 days after the date
  the construction is completed,
then clauses (vii) and (viii) shall be applied to the available construction
proceeds so identified as if the initial temporary period ended as of the
date the election is made.
  `(x) FAILURE TO PAY PENALTIES- In the case of a failure (which is not due to
  willful neglect) to pay any penalty required to be paid under clause (vii)
  or (viii) in the amount or at the time prescribed therefor, the Secretary
  may treat such failure as not occurring if, in addition to paying such
  penalty, the issuer pays a penalty equal to the sum of--
  `(I) 50 percent of the amount which was not paid in accordance with clauses
  (vii) and (viii), plus
  `(II) interest (at the underpayment rate established under section 6621)
  on the portion of the amount which was not paid on the date required for
  the period beginning on such date.
The Secretary may waive all or any portion of the penalty under this
clause. Bonds which are part of an issue with respect to which there is a
failure to pay the amount required under this clause (and any refunding bond
with respect thereto) shall be treated as not being, and as never having been,
tax-exempt bonds.
  `(xi) ELECTION FOR POOLED FINANCING BONDS- At the election of the issuer
  of an issue the proceeds of which are to be used to make or finance loans
  (other than nonpurpose investments) to 2 or more persons, the periods
  described in clauses (ii) and (iii) shall begin on--
  `(I) the date the loan is made, in the case of loans made within the 1-year
  period after the date the bonds are issued, and
  `(II) the date following such 1-year period, in the case of loans made
  after such 1-year period.
If such an election applies to an issue, the requirements of paragraph (2)
shall apply to amounts earned before the beginning of the periods determined
under the preceding sentence.
  `(xii) REFUNDING BONDS- Except as provided in this clause, clause (vii)(II),
  and the last sentence of clause (x), this subparagraph shall not apply
  to any refunding bond and no proceeds of a refunded bond shall be treated
  for purposes of this subparagraph as proceeds of the refunding bond. For
  purposes of clause (v), any portion of an issue which is used to refund
  any bond shall be treated as a separate issue.
  `(xiii) ELECTIONS- Any election under this subparagraph (other than clause
  (ix)) shall be made on or before the date the bonds are issued; and,
  once made, shall be irrevocable.
  `(xiv) TIME FOR PAYMENT OF PENALTIES- Any penalty under this subparagraph
  shall be paid to the United States not later than 90 days after the period
  to which the penalty relates.'
  (4) Subparagraph (D) of section 148(c)(2) is amended--
  (A) by striking `subsection (f)(4)(B)(iv)(IV)' and inserting `subsection
  (f)(4)(C)(iv)', and
  (B) by striking `subsection (f)(4)(B)(iv)(VIII)' and inserting `subsection
  (f)(4)(C)(v)'.
  (5) Subsection (c) of section 7652 of the 1989 Act is amended by striking
  `Subparagraph (A) of section 148(c)(2)' and inserting `Section 148(c)(2)'.
  (6) In the case of a bond issued before the date of the enactment of this
  Act, the period for making the election under section 148(f)(4)(C)(viii)
  of the Internal Revenue Code of 1986 (as added by this subsection) shall
  not expire before the date which is 180 days after such date of enactment.
  (k) AMENDMENT RELATED TO SECTION 7811- The second sentence of section
  403(b)(12)(A) is amended by inserting `involving a one-time irrevocable
  election' after `similar arrangement'.
  (l) AMENDMENTS RELATED TO SECTION 7815-
  (1) Subsection (d) of section 2056 is amended by redesignating the paragraph
  relating to reformations permitted as paragraph (5).
  (2) The period during which a proceeding may be commenced under section
  2056(d)(5)(A)(ii) of the Internal Revenue Code of 1986 (as redesignated
  by paragraph (1)) shall not expire before the date 6 months after the date
  of the enactment of this Act.
  (3) Paragraph (16) of section 7815(d) of the Revenue Reconciliation Act
  of 1989 is amended by inserting `(or would have been so treated if the
  donor were a citizen of the United States)' after `of such Code'.
  (m) EFFECTIVE DATE- Any amendment made by this section shall take effect
  as if included in the provision of the Revenue Reconciliation Act of 1989
  to which such amendment relates.
SEC. 3. AMENDMENTS RELATED TO TECHNICAL AND MISCELLANEOUS REVENUE ACT OF 1988.
  (a) AMENDMENTS RELATED TO SECTION 1006-
  (1) Paragraph (5) of section 367(a) is amended by striking `section 361'
  and inserting `subsection (a) or (b) of section 361'.
  (2) Subsection (d) of section 453B is amended to read as follows:
  `(d) EXCEPTION FOR DISTRIBUTIONS TO WHICH SECTION 337(a) APPLIES- Subsection
  (a) shall not apply to any distribution to which section 337(a) applies.'
  (b) AMENDMENTS RELATED TO SECTION 1008-
  (1) Subparagraph (B) of section 447(g)(4) is amended to read as follows:
  `(B) Qualified farming trade or business-
  `(i) IN GENERAL- The term `qualified farming trade or business' means the
  trade or business of farming--
  `(I) sugar cane,
  `(II) any plant with a preproductive period (as defined in section
  263A(e)(3)) of 2 years or less, and
  `(III) any other plant (other than any citrus or almond tree) if an election
  by the corporation under this subparagraph is in effect.
In the case of a partnership and for purposes of paragraph (3)(A), subclauses
(II) and (III) shall not apply.
  `(ii) EFFECT OF ELECTION- For purposes of paragraphs (1) and (2) of section
  263A(e), any election under this subparagraph shall be treated as if it
  were an election under subsection (d)(3) of section 263A.
  `(iii) ELECTION- Unless the Secretary otherwise consents, an election under
  this subparagraph may be made only for the corporation's 1st taxable year
  which begins after December 31, 1986, and during which the corporation
  engages in a farming business. Any such election, once made, may be revoked
  only with the consent of the Secretary.'
  (2) Subparagraph (A) of section 447(g)(1) is amended by striking `qualified
  farming trade or business' and inserting `trade or business of farming'.
  (c) AMENDMENT RELATED TO SECTION 1012- Subsection (b) of section 6114 is
  amended by striking `by regulations'.
  (d) AMENDMENTS RELATED TO SECTION 1014-
  (1) Subparagraph (B) of section 59(j)(1) is amended by inserting `(or, if
  greater, the child's share of the unused parental minimum tax exemption)'
  before the period at the end thereof.
  (2) Subsection (j) of section 59 is amended by adding at the end thereof
  the following new paragraph:
  `(3) Unused parental minimum tax exemption-
  `(A) IN GENERAL- For purposes of this subsection, the term `unused parental
  minimum tax exemption' means the excess (if any) of--
  `(i) the exemption amount applicable to the parent under section 55(d), over
  `(ii) the parent's alternative minimum taxable income.
  `(B) CERTAIN RULES MADE APPLICABLE- A child's share of any unused parental
  minimum tax exemption shall be determined under rules similar to the rules
  of section 1(i)(3)(B), and rules similar to the rules of paragraphs (3)(D)
  and (5) of section 1(i) shall apply for purposes of this paragraph.'
  (3) Subparagraph (D) of section 59(j)(2), is amended by striking `paragraphs
  (5) and (6)' and inserting `paragraphs (3)(D), (5), and (6)'.
  (e) AMENDMENTS RELATED TO SECTION 1018-
  (1) Subsection (e) of section 468B is amended by striking `This section'
  and inserting `This section (other than subsection (g))'.
  (2) Subsection (c) of section 355 is amended to read as follows:
  `(c) Taxability of Corporation on Distribution-
  `(1) IN GENERAL- Except as provided in paragraph (2), no gain or loss shall
  be recognized to a corporation on any distribution to which this section
  (or so much of section 356 as relates to this section) applies and which
  is not in pursuance of a plan of reorganization.
  `(2) DISTRIBUTION OF APPRECIATED PROPERTY-
  `(A) IN GENERAL- If--
  `(i) in a distribution  referred to in paragraph (1), the corporation
  distributes property other than stock or securities in the controlled
  corporation, and
  `(ii) the fair market value of such property exceeds its adjusted basis
  (in the hands of the distributing corporation),
then gain shall be recognized to the distributing corporation as if such
property were sold to the distributee at its fair market value.
  `(B) TREATMENT OF LIABILITIES- If any property distributed in the
  distribution referred to in paragraph (1) is subject to a liability or
  the shareholder assumes a liability of the distributing corporation in
  connection with the distribution, then, for purposes of subparagraph (A),
  the fair market value of such property shall be treated as not less than
  the amount of such liability.
  `(3) COORDINATION WITH SECTIONS 311 AND 336(a)- Sections 311 and 336(a)
  shall not apply to any distribution referred to in paragraph (1).'
  (f) AMENDMENTS RELATED TO SECTION 5033-
  (1) Subsection (i) of section 2523 is amended by adding at the end thereof
  the following new sentence: `This subsection shall not apply to any transfer
  resulting from the acquisition of rights under a joint and survivor annuity
  described in subsection (f)(6).'
  (2)(A) Paragraph (1) of section 2056A(a) is amended to read as follows:
  `(1) the trust instrument--
  `(A) requires that at least 1 trustee of the trust be an individual citizen
  of the United States or a domestic corporation, and
  `(B) provides that no distribution (other than a distribution of income)
  may be made from the trust unless a trustee who is an individual citizen of
  the United States or a domestic corporation has the right to withhold from
  such distribution the tax imposed by this section on such distribution,'.
  (B) Subsection (b) of section 2056A is amended by adding at the end thereof
  the following new paragraphs:
  `(14) COORDINATION WITH TERMINABLE INTEREST RULES- Any interest in a
  qualified domestic trust shall not be treated as failing to meet the
  requirements of paragraph (5) or (7) of section 2056(b) merely by reason
  of any provision of the trust instrument permitting the withholding from
  any distribution of an amount to pay the tax imposed by paragraph (1)
  on such distribution.
  `(15) NO TAX ON CERTAIN DISTRIBUTIONS- No tax shall be imposed by paragraph
  (1) on any distribution to the surviving spouse to the extent such
  distribution is to reimburse such surviving spouse for any tax imposed
  by subtitle A on any item of income of the trust to which such surviving
  spouse is not entitled under the terms of the trust.'
  (3) Subsection (d) of section 2056A is amended by adding at the end thereof
  the following new sentence:
`No election may be made under this section on any return if such return
is filed more than one year after the time prescribed by law (including
extensions) for filing such return.'
  (4) Subparagraph (A) of section 2056A(b)(10) is amended by striking
  `section 2032' and inserting `section 2011, 2014, 2032'.
  (5) Paragraph (3) of section 2056(d) is amended by striking `section
  2056A(b)(6)' and inserting `section 2056A(b)(7)'.
  (g) AMENDMENTS RELATED TO SECTION 6009-
  (1) Subparagraph (B) of section 135(b)(2) is amended by striking `each
  dollar amount' and inserting `the $40,000 and $60,000 amounts'.
  (2) Subparagraph (C) of section 135(b)(2) is amended by striking `(A) or'.
  (h) AMENDMENTS RELATED TO SECTION 6282- Subsection (e) of section 216
  is amended--
  (1) by striking `ASSOCIATIONS' in the subsection heading and inserting
  `CORPORATIONS', and
  (2) by striking `association' and inserting `corporation'.
  (i) EFFECTIVE DATE- Any amendment made by this subsection shall take effect
  as if included in the provision of the Technical and Miscellaneous Revenue
  Act of 1988 to which such amendment relates.
SEC. 4. MISCELLANEOUS AMENDMENTS.
  (a) Sales to Comply With Conflict-of-Interest Requirements-
  (1) IN GENERAL- Subsection (a) of section 1043 is amended by striking
  `reduced by any basis adjustment under subsection (c) attributable to a
  prior sale' and inserting `to the extent not previously taken into account
  under this subsection'.
  (2) EFFECTIVE DATE- The amendment made by paragraph (1) shall apply to
  sales after November 30, 1989.
  (b) CONFORMING AMENDMENT TO REPEAL OF SECTION 89-
  (1) IN GENERAL- Subparagraph (B) of section 414(n)(2) is amended by striking
  `(6 months in the case of core health benefits)'.
  (2) EFFECTIVE DATE- The amendment made by subsection (a) shall take effect
  as if included in the amendments made by section 1151 of the Tax Reform
  Act of 1986.
  (c) Amendments to Generation-Skipping Transfer Tax-
  (1) Subparagraph (B) of section 2642(c)(2) is amended by striking `such
  individual dies before the trust is terminated' and inserting `the trust
  does not terminate before the individual dies'.
  (2) Paragraph (2) of section 2642(c) is amended by adding at the end thereof
  the following new sentence: `Rules similar to the rules of section 2652(c)(3)
  shall apply for purposes of subparagraph (A).'
  (3) Subparagraph (C) of section 1433(b)(2) of the Tax Reform Act of 1986
  shall not exempt any generation-skipping transfer from the amendments
  made by subtitle D of title XVI of such Act to the extent such transfer is
  attributable to property transferred by gift or by reason of the death of
  another person to the decedent (or trust) referred to in such subparagraph
  after August 3, 1990.
  (4) The amendments made by paragraphs (1) and (2) shall apply to transfers
  after March 31, 1988.
  (d) TREATMENT OF CERTAIN PARTNERSHIP INTEREST UNDER SECTION 1031-
  (1) IN GENERAL- Paragraph (2) of section 1031(a) is amended by adding at
  the end thereof the following new sentence:
`For purposes of this section, an interest in a partnership which has in effect
a valid election under section 761(a) to be excluded from the application of
all of subchapter K shall be treated as an interest in a each of the assets
of such partnership and not as an interest in a partnership.'
  (2) EFFECTIVE DATE- The amendment made by paragraph (1) shall apply to
  transfers after July 18, 1984.
  (e) Treatment of Certain Separated Employees-
  (1) IN GENERAL- Paragraph (6) of section 79(d) is amended by striking
  `any retired employee' and inserting `any former employee'.
  (2) EFFECTIVE DATE- The amendment made by paragraph (1) shall apply to
  employees separating from service after the date of the enactment of
  this Act.
SEC. 5. MISCELLANEOUS CLERICAL CHANGES.
  (a) General Rule-
  (1) Clause (ii) of section 56(g)(4)(D) is amended by striking `year'
  and inserting `years'.
  (2) The heading of subparagraph (B) of section 172(m)(4) is amended by
  striking `SUBSECTION (B)(2)' and inserting `SUBSECTION (b)(2)'.
  (3) Paragraph (2) of section 351(e) is amended by striking `are used'
  and inserting `is used'.
  (4) The heading of subparagraph (B) of section 413(c)(7) is amended by
  striking `ASSET' and inserting `ASSETS'.
  (5) Subparagraph (C) of section 461(i)(3) is amended to read as follows:
  `(C) any tax shelter (as defined in section 6662(d)(2)(C)(ii)).'
  (6) Subparagraph (A) of section 469(m)(3) is amended by striking
  `pre-enactment' and inserting `pre-enactment'.
  (7) Subsection (c) of section 597 is amended by striking `The purposes of'
  and inserting `For purposes of'.
  (8) The last sentence of subsection (a) of section 860D is amended by
  inserting a closing parenthesis before the period at the end thereof.
  (9) Subparagraph (A) of section 860G(a)(3) is amended by striking the
  comma after `secured'.
  (10) Subparagraph (B) of section 927(g)(2) is amended by striking
  `prescribed' and inserting `prescribe'.
  (11) Paragraph (1) of section 936(e) is amended by striking `subsection
  (a)(1)' each place it appears and inserting `subsection (a)(2)'.
  (12) Subparagraph (C) of section 1017(b)(4) is amended by striking
  `subparagraph' and inserting `subparagraphs'.
  (13) The material preceding subparagraph (A) of section 1245(a)(3) is
  amended by striking `or (3)' and inserting `or (3))'.
  (14) Paragraph (2) of section 1441(b) is amended by inserting `section'
  before `170(b)(1)(A)(ii)'.
  (15) Clause (ii) of section 2056A(b)(2)(B) is amended by striking `therefore'
  and inserting `therefor'.
  (16) The item relating to section 2056A in the table of sections for
  part IV of subchapter A of chapter 11 is amended by striking `trusts'
  and inserting `trust'.
  (17) Subclause (I) of section 2642(d)(2)(B)(i) is amended by striking
  `state' and inserting `State'.
  (18) The heading of chapter 23A is amended by striking `CHAPTER
  23A. RAILROAD' and inserting `CHAPTER 23A--RAILROAD'.
  (19) Paragraphs (9) and (10) of section 3231(e) are redesignated as
  paragraphs (8) and (9), respectively.
  (20) Subparagraph (D) of section 4093(c)(4) is amended by striking `reduced
  tax sale' and inserting `reduced-tax sale'.
  (21) Paragraph (3) of section 5061(b) is amended to read as follows:
  `(3) section 5041(e),'.
  (22) Paragraph (3) of section 6013(e) is amended by striking `section
  6661(b)(2)(A)' and inserting `section 6662(d)(2)(A)'.
  (23) Subsection (c) of section 6038A is amended by redesignating paragraphs
  (4), (5), and (6) as paragraphs (3), (4), and (5), respectively.
  (24) Paragraph (3) of section 6039D(d) is amended by striking all that
  follows `plan (and not' and inserting `the employer).'
  (25) Paragraph (4) of section 6045(e) is amended by striking `broker'
  and inserting `reporting person'.
  (26) The heading for subsection (a) of section 6323 is amended by striking
  `PURCHASES' and inserting `PURCHASERS'.
  (27) Subsection (a) of section 6332 is amended by striking `subsections
  (b) and (c)' and inserting `this section'.
  (28) The last sentence of section 6655(g)(3) is amended by striking all
  that follows: `11 months' and inserting `in clause (i)(IV).'
  (29) Paragraph (3) of section 7519(c) is amended by striking `payable on
  later of ' and inserting `payable on the later of'.
  (30) The section 7521 added by section 6233 of the Technical and
  Miscellaneous Revenue Act of 1988 is redesignated as section 7522.
  (31) The table of sections for chapter 77 is amended by striking the item
  added by such section 6233 and inserting the following:
`Sec. 7522. Content of tax due, deficiency, and other notices.'
  (32) Subparagraph (B) of section 7608(c)(1) is amended by striking the
  comma after `operations'.
  (33) Subparagraph (C) of section 7608(c)(5) is amended--
  (A) by striking `interested' in clause (i)(I) and inserting `interest', and
  (B) by striking `title 3' in clause (ii) and inserting `title 31'.
  (34) Subparagraph (C) of section 7701(j)(1) is amended by striking so
  much of such subparagraph as precedes `contributions to the Thrift' and
  inserting the following:
  `(C) subject to section 401(k)(4)(B) and any dollar limitation on the
  application of section 402(a)(8),'.
  (35) Paragraph (1) of section 1012(t) of the Technical and Miscellaneous
  Revenue Act of 1988 is amended by inserting `(as amended by paragraph
  (2))' after `clause (ii)'.
  (36) Subparagraph (F) of section 1014(g)(4) of the Technical and
  Miscellaneous Revenue Act of 1988 is amended by striking `subparagraph'
  in clause (ii) and inserting `paragraph'.
  (37) Paragraph (28) of section 1018(u) of the Technical and Miscellaneous
  Revenue Act of 1988 is amended by inserting `net' before `capital loss'
  each place it appears.
  (38) Subparagraph (C) of section 2001(d)(6) of the Technical and
  Miscellaneous Revenue Act of 1988 is amended by striking `a gallon' and
  inserting `per gallon'.
  (39) Paragraph (3) of section 5033(a) of the Technical and Miscellaneous
  Revenue Act of 1988 is amended by striking `chapter 1' and inserting
  `chapter 11'.
  (40) Paragraph (2) of section 232(a) of the Railroad Retirement Revenue
  Act of 1983 is amended by striking `section 516(b)' each place it appears
  and inserting `section 7106(b)'.
  (b) EFFECTIVE DATE- The amendments made by this section shall take effect
  on the date of the enactment of this Act.