
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document affected by Public Law 106-554 Section 1(a)(7)[311(b)]]
[CITE: 26USC857]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                        Subtitle A--Income Taxes
 
                  CHAPTER 1--NORMAL TAXES AND SURTAXES
 
Subchapter M--Regulated Investment Companies and Real Estate Investment 
                                 Trusts
 
                 PART II--REAL ESTATE INVESTMENT TRUSTS
 
Sec. 857. Taxation of real estate investment trusts and their 
        beneficiaries
        

(a) Requirements applicable to real estate investment trusts

    The provisions of this part (other than subsection (d) of this 
section and subsection (g) of section 856) shall not apply to a real 
estate investment trust for a taxable year unless--
        (1) the deduction for dividends paid during the taxable year (as 
    defined in section 561, but determined without regard to capital 
    gains dividends) equals or exceeds--
            (A) the sum of--
                (i) 90 percent of the real estate investment trust 
            taxable income for the taxable year (determined without 
            regard to the deduction for dividends paid (as defined in 
            section 561) and by excluding any net capital gain); and
                (ii) 90 percent of the excess of the net income from 
            foreclosure property over the tax imposed on such income by 
            subsection (b)(4)(A); minus

            (B) any excess noncash income (as determined under 
        subsection (e)); and

        (2) either--
            (A) the provisions of this part apply to the real estate 
        investment trust for all taxable years beginning after February 
        28, 1986, or
            (B) as of the close of the taxable year, the real estate 
        investment trust has no earnings and profits accumulated in any 
        non-REIT year.

For purposes of the preceding sentence, the term ``non-REIT year'' means 
any taxable year to which the provisions of this part did not apply with 
respect to the entity. The Secretary may waive the requirements of 
paragraph (1) for any taxable year if the real estate investment trust 
establishes to the satisfaction of the Secretary that it was unable to 
meet such requirements by reason of distributions previously made to 
meet the requirements of section 4981.

(b) Method of taxation of real estate investment trusts and holders of 
        shares or certificates of beneficial interest

       (1) Imposition of tax on real estate investment trusts

        There is hereby imposed for each taxable year on the real estate 
    investment trust taxable income of every real estate investment 
    trust a tax computed as provided in section 11, as though the real 
    estate investment trust taxable income were the taxable income 
    referred to in section 11.

           (2) Real estate investment trust taxable income

        For purposes of this part, the term ``real estate investment 
    trust taxable income'' means the taxable income of the real estate 
    investment trust, adjusted as follows:
            (A) The deductions for corporations provided in part VIII 
        (except section 248) of subchapter B (section 241 and following, 
        relating to the deduction for dividends received, etc.) shall 
        not be allowed.
            (B) The deduction for dividends paid (as defined in section 
        561) shall be allowed, but shall be computed without regard to 
        that portion of such deduction which is attributable to the 
        amount excluded under subparagraph (D).
            (C) The taxable income shall be computed without regard to 
        section 443(b) (relating to computation of tax on change of 
        annual accounting period).
            (D) There shall be excluded an amount equal to the net 
        income from foreclosure property.
            (E) There shall be deducted an amount equal to the tax 
        imposed by paragraphs (5) and (7) for the taxable year.
            (F) There shall be excluded an amount equal to any net 
        income derived from prohibited transactions.

                          (3) Capital gains

        (A) Alternative tax in case of capital gains

            If for any taxable year a real estate investment trust has a 
        net capital gain, then, in lieu of the tax imposed by subsection 
        (b)(1), there is hereby imposed a tax (if such tax is less than 
        the tax imposed by such subsection) which shall consist of the 
        sum of--
                (i) a tax, computed as provided in subsection (b)(1), on 
            the real estate investment trust taxable income (determined 
            by excluding such net capital gain and by computing the 
            deduction for dividends paid without regard to capital gain 
            dividends), and
                (ii) a tax determined at the rate provided in section 
            1201(a) on the excess of the net capital gain over the 
            deduction for dividends paid (as defined in section 561) 
            determined with reference to capital gains dividends only.

        (B) Treatment of capital gain dividends by shareholders

            A capital gain dividend shall be treated by the shareholders 
        or holders of beneficial interests as a gain from the sale or 
        exchange of a capital asset held for more than 1 year.

        (C) Definition of capital gain dividend

            For purposes of this part, a capital gain dividend is any 
        dividend, or part thereof, which is designated by the real 
        estate investment trust as a capital gain dividend in a written 
        notice mailed to its shareholders or holders of beneficial 
        interests at any time before the expiration of 30 days after the 
        close of its taxable year (or mailed to its shareholders or 
        holders of beneficial interests with its annual report for the 
        taxable year); except that, if there is an increase in the 
        excess described in subparagraph (A)(ii) of this paragraph for 
        such year which results from a determination (as defined in 
        section 860(e)), such designation may be made with respect to 
        such increase at any time before the expiration of 120 days 
        after the date of such determination. If the aggregate amount so 
        designated with respect to a taxable year of the trust 
        (including capital gain dividends paid after the close of the 
        taxable year described in section 858) is greater than the net 
        capital gain of the taxable year, the portion of each 
        distribution which shall be a capital gain dividend shall be 
        only that proportion of the amount so designated which such net 
        capital gain bears to the aggregate amount so designated. For 
        purposes of this subparagraph, the amount of the net capital 
        gain for any taxable year which is not a calendar year shall be 
        determined without regard to any net capital loss attributable 
        to transactions after December 31 of such year, and any such net 
        capital loss shall be treated as arising on the 1st day of the 
        next taxable year. To the extent provided in regulations, the 
        preceding sentence shall apply also for purposes of computing 
        the taxable income of the real estate investment trust.

        (D) Treatment by shareholders of undistributed capital gains

            (i) Every shareholder of a real estate investment trust at 
        the close of the trust's taxable year shall include, in 
        computing his long-term capital gains in his return for his 
        taxable year in which the last day of the trust's taxable year 
        falls, such amount as the trust shall designate in respect of 
        such shares in a written notice mailed to its shareholders at 
        any time prior to the expiration of 60 days after the close of 
        its taxable year (or mailed to its shareholders or holders of 
        beneficial interests with its annual report for the taxable 
        year), but the amount so includible by any shareholder shall not 
        exceed that part of the amount subjected to tax in subparagraph 
        (A)(ii) which he would have received if all of such amount had 
        been distributed as capital gain dividends by the trust to the 
        holders of such shares at the close of its taxable year.
            (ii) For purposes of this title, every such shareholder 
        shall be deemed to have paid, for his taxable year under clause 
        (i), the tax imposed by subparagraph (A)(ii) on the amounts 
        required by this subparagraph to be included in respect of such 
        shares in computing his long-term capital gains for that year; 
        and such shareholders shall be allowed credit or refund as the 
        case may be, for the tax so deemed to have been paid by him.
            (iii) The adjusted basis of such shares in the hands of the 
        holder shall be increased with respect to the amounts required 
        by this subparagraph to be included in computing his long-term 
        capital gains, by the difference between the amount of such 
        includible gains and the tax deemed paid by such shareholder in 
        respect of such shares under clause (ii).
            (iv) In the event of such designation, the tax imposed by 
        subparagraph (A)(ii) shall be paid by the real estate investment 
        trust within 30 days after the close of its taxable year.
            (v) The earnings and profits of such real estate investment 
        trust, and the earnings and profits of any such shareholder 
        which is a corporation, shall be appropriately adjusted in 
        accordance with regulations prescribed by the Secretary.
            (vi) As used in this subparagraph, the terms ``shares'' and 
        ``shareholders'' shall include beneficial interests and holders 
        of beneficial interests, respectively.

        (E) Coordination with net operating loss provisions

            For purposes of section 172, if a real estate investment 
        trust pays capital gain dividends during any taxable year, the 
        amount of the net capital gain for such taxable year (to the 
        extent such gain does not exceed the amount of such capital gain 
        dividends) shall be excluded in determining--
                (i) the net operating loss for the taxable year, and
                (ii) the amount of the net operating loss of any prior 
            taxable year which may be carried through such taxable year 
            under section 172(b)(2) to a succeeding taxable year.

                (4) Income from foreclosure property

        (A) Imposition of tax

            A tax is hereby imposed for each taxable year on the net 
        income from foreclosure property of every real estate investment 
        trust. Such tax shall be computed by multiplying the net income 
        from foreclosure property by the highest rate of tax specified 
        in section 11(b).

        (B) Net income from foreclosure property

            For purposes of this part, the term ``net income from 
        foreclosure property'' means the excess of--
                (i) gain from the sale or other disposition of 
            foreclosure property described in section 1221(a)(1) and the 
            gross income for the taxable year derived from foreclosure 
            property (as defined in section 856(e)), but only to the 
            extent such gross income is not described in subparagraph 
            (A), (B), (C), (D), (E), or (G) of section 856(c)(3), over
                (ii) the deductions allowed by this chapter which are 
            directly connected with the production of the income 
            referred to in clause (i).

      (5) Imposition of tax in case of failure to meet certain 
                                requirements

        If section 856(c)(6) applies to a real estate investment trust 
    for any taxable year, there is hereby imposed on such trust a tax in 
    an amount equal to the greater of--
            (A) the excess of--
                (i) 90 percent of the gross income (excluding gross 
            income from prohibited transactions) of the real estate 
            investment trust, over
                (ii) the amount of such gross income which is derived 
            from sources referred to in section 856(c)(2); or

            (B) the excess of--
                (i) 75 percent of the gross income (excluding gross 
            income from prohibited transactions) of the real estate 
            investment trust, over
                (ii) the amount of such gross income which is derived 
            from sources referred to in section 856(c)(3),

        multiplied by a fraction the numerator of which is the real 
        estate investment trust taxable income for the taxable year 
        (determined without regard to the deductions provided in 
        paragraphs (2)(B) and (2)(E), without regard to any net 
        operating loss deduction, and by excluding any net capital gain) 
        and the denominator of which is the gross income for the taxable 
        year (excluding gross income from prohibited transactions; gross 
        income and gain from foreclosure property (as defined in section 
        856(e), but only to the extent such gross income and gain is not 
        described in subparagraph (A), (B), (C), (D), (E), or (G) of 
        section 856(c)(3)); long-term capital gain; and short-term 
        capital gain to the extent of any short-term capital loss).

               (6) Income from prohibited transactions

        (A) Imposition of tax

            There is hereby imposed for each taxable year of every real 
        estate investment trust a tax equal to 100 percent of the net 
        income derived from prohibited transactions.

        (B) Definitions

            For purposes of this part--
                (i) the term ``net income derived from prohibited 
            transactions'' means the excess of the gain from prohibited 
            transactions over the deductions allowed by this chapter 
            which are directly connected with prohibited transactions;
                (ii) in determining the amount of the net income derived 
            from prohibited transactions, there shall not be taken into 
            account any item attributable to any prohibited transaction 
            for which there was a loss; and
                (iii) the term ``prohibited transaction'' means a sale 
            or other disposition of property described in section 
            1221(a)(1) which is not foreclosure property.

        (C) Certain sales not to constitute prohibited transactions

            For purposes of this part, the term ``prohibited 
        transaction'' does not include a sale of property which is a 
        real estate asset as defined in section 856(c)(5)(B) if--
                (i) the trust has held the property for not less than 4 
            years;
                (ii) aggregate expenditures made by the trust, or any 
            partner of the trust, during the 4-year period preceding the 
            date of sale which are includible in the basis of the 
            property do not exceed 30 percent of the net selling price 
            of the property;
                (iii)(I) during the taxable year the trust does not make 
            more than 7 sales of property (other than sales of 
            foreclosure property or sales to which section 1033 
            applies), or (II) the aggregate adjusted bases (as 
            determined for purposes of computing earnings and profits) 
            of property (other than sales of foreclosure property or 
            sales to which section 1033 applies) sold during the taxable 
            year does not exceed 10 percent of the aggregate bases (as 
            so determined) of all of the assets of the trust as of the 
            beginning of the taxable year;
                (iv) in the case of property, which consists of land or 
            improvements, not acquired through foreclosure (or deed in 
            lieu of foreclosure), or lease termination, the trust has 
            held the property for not less than 4 years for production 
            of rental income; and
                (v) if the requirement of clause (iii)(I) is not 
            satisfied, substantially all of the marketing and 
            development expenditures with respect to the property were 
            made through an independent contractor (as defined in 
            section 856(d)(3)) from whom the trust itself does not 
            derive or receive any income.

        (D) Special rules

            In applying subparagraph (C) the following special rules 
        apply:
                (i) The holding period of property acquired through 
            foreclosure (or deed in lieu of foreclosure), or termination 
            of the lease, includes the period for which the trust held 
            the loan which such property secured, or the lease of such 
            property.
                (ii) In the case of a property acquired through 
            foreclosure (or deed in lieu of foreclosure), or termination 
            of a lease, expenditures made by, or for the account of, the 
            mortgagor or lessee after default became imminent will be 
            regarded as made by the trust.
                (iii) Expenditures (including expenditures regarded as 
            made directly by the trust, or indirectly by any partner of 
            the trust, under clause (ii)) will not be taken into account 
            if they relate to foreclosure property and did not cause the 
            property to lose its status as foreclosure property.
                (iv) Expenditures will not be taken into account if they 
            are made solely to comply with standards or requirements of 
            any government or governmental authority having relevant 
            jurisdiction, or if they are made to restore the property as 
            a result of losses arising from fire, storm or other 
            casualty.
                (v) The term ``expenditures'' does not include advances 
            on a loan made by the trust.
                (vi) The sale of more than one property to one buyer as 
            part of one transaction constitutes one sale.
                (vii) The term ``sale'' does not include any transaction 
            in which the net selling price is less than $10,000.

        (E) Sales not meeting requirements

            In determining whether or not any sale constitutes a 
        ``prohibited transaction'' for purposes of subparagraph (A), the 
        fact that such sale does not meet the requirements of 
        subparagraph (C) of this paragraph shall not be taken into 
        account; and such determination, in the case of a sale not 
        meeting such requirements, shall be made as if subparagraphs (C) 
        and (D) had not been enacted.

    (7) Income from redetermined rents, redetermined deductions, 
                             and excess interest

        (A) Imposition of tax

            There is hereby imposed for each taxable year of the real 
        estate investment trust a tax equal to 100 percent of 
        redetermined rents, redetermined deductions, and excess 
        interest.

        (B) Redetermined rents

            (i) In general

                The term ``redetermined rents'' means rents from real 
            property (as defined in subsection \1\ 856(d)) the amount of 
            which would (but for subparagraph (E)) be reduced on 
            distribution, apportionment, or allocation under section 482 
            to clearly reflect income as a result of services furnished 
            or rendered by a taxable REIT subsidiary of the real estate 
            investment trust to a tenant of such trust.
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    \1\ So in original. Probably should be ``section''.
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            (ii) Exception for certain amounts

                Clause (i) shall not apply to amounts received directly 
            or indirectly by a real estate investment trust--
                    (I) for services furnished or rendered by a taxable 
                REIT subsidiary that are described in paragraph (1)(B) 
                of section 856(d), or
                    (II) from a taxable REIT subsidiary that are 
                described in paragraph (7)(C)(ii) of such section.
            (iii) Exception for de minimis amounts

                Clause (i) shall not apply to amounts described in 
            section 856(d)(7)(A) with respect to a property to the 
            extent such amounts do not exceed the one percent threshold 
            described in section 856(d)(7)(B) with respect to such 
            property.
            (iv) Exception for comparably priced services

                Clause (i) shall not apply to any service rendered by a 
            taxable REIT subsidiary of a real estate investment trust to 
            a tenant of such trust if--
                    (I) such subsidiary renders a significant amount of 
                similar services to persons other than such trust and 
                tenants of such trust who are unrelated (within the 
                meaning of section 856(d)(8)(F)) to such subsidiary, 
                trust, and tenants, but
                    (II) only to the extent the charge for such service 
                so rendered is substantially comparable to the charge 
                for the similar services rendered to persons referred to 
                in subclause (I).
            (v) Exception for certain separately charged 
                    services

                Clause (i) shall not apply to any service rendered by a 
            taxable REIT subsidiary of a real estate investment trust to 
            a tenant of such trust if--
                    (I) the rents paid to the trust by tenants (leasing 
                at least 25 percent of the net leasable space in the 
                trust's property) who are not receiving such service 
                from such subsidiary are substantially comparable to the 
                rents paid by tenants leasing comparable space who are 
                receiving such service from such subsidiary, and
                    (II) the charge for such service from such 
                subsidiary is separately stated.
            (vi) Exception for certain services based on 
                    subsidiary's income from the services

                Clause (i) shall not apply to any service rendered by a 
            taxable REIT subsidiary of a real estate investment trust to 
            a tenant of such trust if the gross income of such 
            subsidiary from such service is not less than 150 percent of 
            such subsidiary's direct cost in furnishing or rendering the 
            service.
            (vii) Exceptions granted by Secretary

                The Secretary may waive the tax otherwise imposed by 
            subparagraph (A) if the trust establishes to the 
            satisfaction of the Secretary that rents charged to tenants 
            were established on an arms' length basis even though a 
            taxable REIT subsidiary of the trust provided services to 
            such tenants.

        (C) Redetermined deductions

            The term ``redetermined deductions'' means deductions (other 
        than redetermined rents) of a taxable REIT subsidiary of a real 
        estate investment trust if the amount of such deductions would 
        (but for subparagraph (E)) be decreased on distribution, 
        apportionment, or allocation under section 482 to clearly 
        reflect income as between such subsidiary and such trust.

        (D) Excess interest

            The term ``excess interest'' means any deductions for 
        interest payments by a taxable REIT subsidiary of a real estate 
        investment trust to such trust to the extent that the interest 
        payments are in excess of a rate that is commercially 
        reasonable.

        (E) Coordination with section 482

            The imposition of tax under subparagraph (A) shall be in 
        lieu of any distribution, apportionment, or allocation under 
        section 482.

        (F) Regulatory authority

            The Secretary shall prescribe such regulations as may be 
        necessary or appropriate to carry out the purposes of this 
        paragraph. Until the Secretary prescribes such regulations, real 
        estate investment trusts and their taxable REIT subsidiaries may 
        base their allocations on any reasonable method.

     (8) Loss on sale or exchange of stock held 6 months or less

        (A) In general

            If--
                (i) subparagraph (B) or (D) of paragraph (3) provides 
            that any amount with respect to any share or beneficial 
            interest is to be treated as a long-term capital gain, and
                (ii) the taxpayer has held such share or interest for 6 
            months or less,

        then any loss on the sale or exchange of such share or interest 
        shall, to the extent of the amount described in clause (i), be 
        treated as a long-term capital loss.

        (B) Determination of holding period

            For purposes of this paragraph, the rules of paragraphs (3) 
        and (4) of section 246(c) shall apply in determining the period 
        for which the taxpayer has held any share of stock or beneficial 
        interest; except that ``6 months'' shall be substituted for the 
        number of days specified in subparagraph (B) \2\ of section 
        246(c)(3).
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    \2\ See References in Text note below.
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        (C) Exception for losses incurred under periodic liquidation 
                plans

            To the extent provided in regulations, subparagraph (A) 
        shall not apply to any loss incurred on the sale or exchange of 
        shares of stock of, or beneficial interest in, a real estate 
        investment trust pursuant to a plan which provides for the 
        periodic liquidation of such shares or interests.

            (9) Time certain dividends taken into account

        For purposes of this title, any dividend declared by a real 
    estate investment trust in October, November, or December of any 
    calendar year and payable to shareholders of record on a specified 
    date in such a month shall be deemed--
            (A) to have been received by each shareholder on December 31 
        of such calendar year, and
            (B) to have been paid by such trust on December 31 of such 
        calendar year (or, if earlier, as provided in section 858).

    The preceding sentence shall apply only if such dividend is actually 
    paid by the company during January of the following calendar year.

(c) Restrictions applicable to dividends received from real estate 
        investment trusts

    For purposes of section 243 (relating to deductions for dividends 
received by corporations), a dividend received from a real estate 
investment trust which meets the requirements of this part shall not be 
considered as a dividend.

(d) Earnings and profits

                           (1) In general

        The earnings and profits of a real estate investment trust for 
    any taxable year (but not its accumulated earnings) shall not be 
    reduced by any amount which is not allowable in computing its 
    taxable income for such taxable year. For purposes of this 
    subsection, the term ``real estate investment trust'' includes a 
    domestic corporation, trust, or association which is a real estate 
    investment trust determined without regard to the requirements of 
    subsection (a).

          (2) Coordination with tax on undistributed income

        A real estate investment trust shall be treated as having 
    sufficient earnings and profits to treat as a dividend any 
    distribution (other than in a redemption to which section 302(a) 
    applies) which is treated as a dividend by such trust. The preceding 
    sentence shall not apply to the extent that the amount distributed 
    during any calendar year by the trust exceeds the required 
    distribution for such calendar year (as determined under section 
    4981).

        (3) Distributions to meet requirements of subsection 
                                  (a)(2)(B)

        Any distribution which is made in order to comply with the 
    requirements of subsection (a)(2)(B)--
            (A) shall be treated for purposes of this subsection and 
        subsection (a)(2)(B) as made from earnings and profits which, 
        but for the distribution, would result in a failure to meet such 
        requirements (and allocated to such earnings on a first-in, 
        first-out basis), and
            (B) to the extent treated under subparagraph (A) as made 
        from accumulated earnings and profits, shall not be treated as a 
        distribution for purposes of subsection (b)(2)(B) and section 
        858.

(e) Excess noncash income

                           (1) In general

        For purposes of subsection (a)(1)(B), the term ``excess noncash 
    income'' means the excess (if any) of--
            (A) the amount determined under paragraph (2) for the 
        taxable year, over
            (B) 5 percent of the real estate investment trust taxable 
        income for the taxable year determined without regard to the 
        deduction for dividends paid (as defined in section 561) and by 
        excluding any net capital gain.

                     (2) Determination of amount

        The amount determined under this paragraph for the taxable year 
    is the sum of--
            (A) the amount (if any) by which--
                (i) the amounts includible in gross income under section 
            467 (relating to certain payments for the use of property or 
            services), exceed
                (ii) the amounts which would have been includible in 
            gross income without regard to such section,

            (B) any income on the disposition of a real estate asset 
        if--
                (i) there is a determination (as defined in section 
            860(e)) that such income is not eligible for nonrecognition 
            under section 1031, and
                (ii) failure to meet the requirements of section 1031 
            was due to reasonable cause and not to willful neglect,

            (C) the amount (if any) by which--
                (i) the amounts includible in gross income with respect 
            to instruments to which section 860E(a) or 1272 applies, 
            exceed
                (ii) the amount of money and the fair market value of 
            other property received during the taxable year under such 
            instruments, and

            (D) amounts includible in income by reason of cancellation 
        of indebtedness.

(f) Real estate investment trusts to ascertain ownership

                           (1) In general

        Each real estate investment trust shall each taxable year comply 
    with regulations prescribed by the Secretary for the purposes of 
    ascertaining the actual ownership of the outstanding shares, or 
    certificates of beneficial interest, of such trust.

                        (2) Failure to comply

        (A) In general

            If a real estate investment trust fails to comply with the 
        requirements of paragraph (1) for a taxable year, such trust 
        shall pay (on notice and demand by the Secretary and in the same 
        manner as tax) a penalty of $25,000.

        (B) Intentional disregard

            If any failure under paragraph (1) is due to intentional 
        disregard of the requirement under paragraph (1), the penalty 
        under subparagraph (A) shall be $50,000.

        (C) Failure to comply after notice

            The Secretary may require a real estate investment trust to 
        take such actions as the Secretary determines appropriate to 
        ascertain actual ownership if the trust fails to meet the 
        requirements of paragraph (1). If the trust fails to take such 
        actions, the trust shall pay (on notice and demand by the 
        Secretary and in the same manner as tax) an additional penalty 
        equal to the penalty determined under subparagraph (A) or (B), 
        whichever is applicable.

        (D) Reasonable cause

            No penalty shall be imposed under this paragraph with 
        respect to any failure if it is shown that such failure is due 
        to reasonable cause and not to willful neglect.

(g) Cross reference

            For provisions relating to excise tax based on certain real 
        estate investment trust taxable income not distributed during 
        the taxable year, see section 4981.

(Added Pub. L. 86-779, Sec. 10(a), Sept. 14, 1960, 74 Stat. 1006; 
amended Pub. L. 88-272, title II, Sec. 201(d)(11), Feb. 26, 1964, 78 
Stat. 32; Pub. L. 91-172, title V, Sec. 511(c)(3), Dec. 30, 1969, 83 
Stat. 637; Pub. L. 93-625, Sec. 6(c), (d)(2)-(4), Jan. 3, 1975, 88 Stat. 
2113, 2114; Pub. L. 94-455, title XIV, Sec. 1402(b)(1)(P), (2), title 
XVI, Secs. 1601(c), 1602(b), 1603(b), (c)(5), 1604(c)(2), (f)(3)(B), 
(j), (k)(2)(B), 1605(b)(2), 1606(a), (d), 1607(a), (b)(1)(A), (2), (3), 
title XIX, Secs. 1901(a)(112), (b)(1)(V), (33)(K), 1906(b)(13)(A), Oct. 
4, 1976, 90 Stat. 1732, 1746-1748, 1750-1757, 1783, 1792, 1801, 1834; 
Pub. L. 95-600, title III, Secs. 301(b)(12), 362(d)(3), 363(b), title 
IV, Sec. 403(c)(3), Nov. 6, 1978, 92 Stat. 2822, 2851, 2852, 2868; Pub. 
L. 96-222, title I, Sec. 103(a)(1), Apr. 1, 1980, 94 Stat. 208; Pub. L. 
96-223, title IV, Sec. 404(b)(8), Apr. 2, 1980, 94 Stat. 307; Pub. L. 
97-34, title III, Sec. 302(c)(5), (d)(1), Aug. 13, 1981, 95 Stat. 273, 
274; Pub. L. 98-369, div. A, title I, Secs. 16(a), 55(b), title X, 
Sec. 1001(b)(13), (e), July 18, 1984, 98 Stat. 505, 572, 1011, 1012; 
Pub. L. 99-514, title VI, Secs. 612(b)(7), 661(b), 664, 665(a), (b)(1), 
666, 668(b)(1)(A), (2), (3), Oct. 22, 1986, 100 Stat. 2251, 2300, 2303-
2305, 2307, 2308; Pub. L. 100-647, title I, Secs. 1006(r), (s)(2), (4), 
(5), 1018(u)(28), Nov. 10, 1988, 102 Stat. 3418, 3419, 3591; Pub. L. 
101-508, title XI, Sec. 11704(a)(37), Nov. 5, 1990, 104 Stat. 1388-520; 
Pub. L. 105-34, title XII, Secs. 1251(a), 1254(a), (b)(1), 1255(b)(2), 
(3), 1256, 1259, 1260, Aug. 5, 1997, 111 Stat. 1030, 1032-1035; Pub. L. 
105-206, title VI, Sec. 6012(g), July 22, 1998, 112 Stat. 819; Pub. L. 
106-170, title V, Secs. 532(c)(2)(L), (M), 545, 556(a), (b), 566(a)(2), 
(b), Dec. 17, 1999, 113 Stat. 1930, 1944, 1949, 1950; Pub. L. 106-554, 
Sec. 1(a)(7) [title III, Sec. 311(b)], Dec. 21, 2000, 114 Stat. 2763, 
2763A-640.)

                       References in Text

    Section 246(c)(3) of this title, referred to in subsec. (b)(8)(B), 
was amended by Pub. L. 105-34, title X, Sec. 1015(b)(2), Aug. 5, 1997, 
111 Stat. 922, to strike out subpar. (B) and redesignate subpar. (C) as 
(B).


                               Amendments

    2000--Subsec. (b)(7)(B)(ii). Pub. L. 106-554 amended heading and 
text of cl. (ii) generally. Prior to amendment, text read as follows: 
``Clause (i) shall not apply to amounts received directly or indirectly 
by a real estate investment trust for services described in paragraph 
(1)(B) or (7)(C)(i) of section 856(d).''
    1999--Subsec. (a)(1)(A)(i), (ii). Pub. L. 106-170, Sec. 556(a), 
substituted ``90 percent'' for ``95 percent (90 percent for taxable 
years beginning before January 1, 1980)''.
    Subsec. (b)(2)(E). Pub. L. 106-170, Sec. 545(b), substituted 
``paragraphs (5) and (7)'' for ``paragraph (5)''.
    Subsec. (b)(4)(B)(i). Pub. L. 106-170, Sec. 532(c)(2)(L), 
substituted ``section 1221(a)(1)'' for ``section 1221(1)''.
    Subsec. (b)(5)(A)(i). Pub. L. 106-170, Sec. 556(b), substituted ``90 
percent'' for ``95 percent (90 percent in the case of taxable years 
beginning before January 1, 1980)''.
    Subsec. (b)(6)(B)(iii). Pub. L. 106-170, Sec. 532(c)(2)(M), 
substituted ``section 1221(a)(1)'' for ``section 1221(1)''.
    Subsec. (b)(7) to (9). Pub. L. 106-170, Sec. 545(a), added par. (7) 
and redesignated former pars. (7) and (8) as (8) and (9), respectively.
    Subsec. (d)(3)(A). Pub. L. 106-170, Sec. 566(a)(2), amended subpar. 
(A) generally. Prior to amendment, subpar. (A) read as follows: ``shall 
be treated for purposes of this subsection and subsection (a)(2)(B) as 
made from the earliest earnings and profits accumulated in any taxable 
year to which the provisions of this part did not apply rather than the 
most recently accumulated earnings and profits, and''.
    Subsec. (d)(3)(B). Pub. L. 106-170, Sec. 566(b), inserted ``and 
section 858'' before period at end.
    1998--Subsec. (d)(3)(A). Pub. L. 105-206 substituted ``earliest 
earnings and profits accumulated in any taxable year to which the 
provisions of this part did not apply'' for ``earliest accumulated 
earnings and profits (other than earnings and profits to which 
subsection (a)(2)(A) applies)''.
    1997--Subsec. (a)(2), (3). Pub. L. 105-34, Sec. 1251(a)(1), 
redesignated par. (3) as (2) and struck out former par. (2) which read 
as follows: ``the real estate investment trust complies for such year 
with regulations prescribed by the Secretary for the purpose of 
ascertaining the actual ownership of the outstanding shares, or 
certificates of beneficial interest, of such trust, and''.
    Subsec. (b)(3)(D), (E). Pub. L. 105-34, Sec. 1254(a), added subpar. 
(D) and redesignated former subpar. (D) as (E).
    Subsec. (b)(5). Pub. L. 105-34, Sec. 1255(b)(2), substituted 
``section 856(c)(6)'' for ``section 856(c)(7)'' in introductory 
provisions.
    Subsec. (b)(6)(C). Pub. L. 105-34, Sec. 1255(b)(3), substituted 
``section 856(c)(5)(B)'' for ``section 856(c)(6)(B)'' in introductory 
provisions.
    Subsec. (b)(6)(C)(iii). Pub. L. 105-34, Sec. 1260, substituted 
``(other than sales of foreclosure property or sales to which section 
1033 applies)'' for ``(other than foreclosure property)'' in subcls. (I) 
and (II).
    Subsec. (b)(7)(A)(i). Pub. L. 105-34, Sec. 1254(b)(1), substituted 
``subparagraph (B) or (D)'' for ``subparagraph (B)''.
    Subsec. (d)(3). Pub. L. 105-34, Sec. 1256, added par. (3).
    Subsec. (e)(2)(B) to (D). Pub. L. 105-34, Sec. 1259, redesignated 
subpar. (C) as (B) and substituted a comma for period at end, added 
subpars. (C) and (D), and struck out former subpar. (B) which read as 
follows: ``in the case of a real estate investment trust using the cash 
receipts and disbursements method of accounting, the amount (if any) by 
which--
        ``(i) the amounts includible in gross income with respect to 
    instruments to which section 1274 (relating to certain debt 
    instruments issued for property) applies, exceed
        ``(ii) the amount of money and the fair market value of other 
    property received during the taxable year under such instruments; 
    plus''.
    Subsecs. (f), (g). Pub. L. 105-34, Sec. 1251(a)(2), added subsec. 
(f) and redesignated former subsec. (f) as (g).
    1990--Subsec. (b)(3)(C). Pub. L. 101-508 amended Pub. L. 100-647, 
Sec. 1018(u)(28). See 1988 Amendment note below.
    1988--Subsec. (a). Pub. L. 100-647, Sec. 1006(s)(4), inserted at end 
``The Secretary may waive the requirements of paragraph (1) for any 
taxable year if the real estate investment trust establishes to the 
satisfaction of the Secretary that it was unable to meet such 
requirements by reason of distributions previously made to meet the 
requirements of section 4981.''
    Subsec. (b)(3)(C). Pub. L. 100-647, Sec. 1018(u)(28), as amended by 
Pub. L. 101-508, substituted ``such net capital loss shall'' for ``such 
net capital loss such''.
    Pub. L. 100-647, Sec. 1006(s)(2), substituted ``the taxable income 
of the real estate investment trust'' for ``real estate investment trust 
taxable income''.
    Subsec. (b)(8). Pub. L. 100-647, Sec. 1006(s)(5), substituted ``in 
October, November, or December'' for ``in December'' and ``in such a 
month'' for ``in such month'' in introductory text, ``on December 31 of 
such calendar year'' for ``on such date'', in subpars. (A) and (B), and 
``during January'' for ``before February 1'' in last sentence.
    Subsec. (e)(2)(B)(i). Pub. L. 100-647, Sec. 1006(r), substituted 
``with respect to instruments'' for ``as original issue discount on 
instruments''.
    1986--Subsec. (a). Pub. L. 99-514, Sec. 661(b), struck out ``and'' 
at end of par. (1), substituted ``, and'' for the period at end of par. 
(2), and added par. (3) and last sentence.
    Subsec. (a)(1)(B). Pub. L. 99-514, Sec. 664(a), amended subpar. (B) 
generally. Prior to amendment, subpar. (B) read as follows: ``the sum 
of--
        ``(i) the amount of any penalty imposed on the real estate 
    investment trust by section 6697 which is paid by such trust during 
    the taxable year; and
        ``(ii) the net loss derived from prohibited transactions,''.
    Subsec. (b)(2)(F). Pub. L. 99-514, Sec. 666(b)(2), struck out ``and 
there shall be included an amount equal to any net loss derived from 
prohibited transactions'' after ``prohibited transactions''.
    Subsec. (b)(3)(C). Pub. L. 99-514, Sec. 668(b)(3), inserted at end 
``For purposes of this subparagraph, the amount of the net capital gain 
for any taxable year which is not a calendar year shall be determined 
without regard to any net capital loss attributable to transactions 
after December 31 of such year, and any such net capital loss such be 
treated as arising on the 1st day of the next taxable year. To the 
extent provided in regulations, the preceding sentence shall apply also 
for purposes of computing real estate investment trust taxable income.''
    Pub. L. 99-514, Sec. 665(a)(2), (b)(1), inserted ``(or mailed to its 
shareholders or holders of beneficial interests with its annual report 
for the taxable year)'', struck out last sentence which read as follows: 
``For purposes of this subparagraph, the net capital gain shall be 
deemed not to exceed the real estate investment trust taxable income 
(determined without regard to the deduction for dividends paid (as 
defined in section 561) for the taxable year).''
    Subsec. (b)(3)(D). Pub. L. 99-514, Sec. 665(a)(1), added subpar. 
(D).
    Subsec. (b)(6)(B)(ii). Pub. L. 99-514, Sec. 666(b)(1), amended cl. 
(ii) generally. Prior to amendment, cl. (ii) read as follows: ``the term 
`net loss derived from prohibited transactions' means the excess of the 
deductions allowed by this chapter which are directly connected with 
prohibited transactions over the gain from prohibited transactions; 
and''.
    Subsec. (b)(6)(C)(ii). Pub. L. 99-514, Sec. 666(a)(2), substituted 
``30 percent'' for ``20 percent''.
    Subsec. (b)(6)(C)(iii). Pub. L. 99-514, Sec. 666(a)(1), amended cl. 
(iii) generally. Prior to amendment, cl. (iii) read as follows: ``during 
the taxable year the trust does not make more than 5 sales of property 
(other than foreclosure property); and''.
    Subsec. (b)(6)(C)(v). Pub. L. 99-514, Sec. 666(a)(3), added cl. (v).
    Subsec. (b)(8). Pub. L. 99-514, Sec. 668(b)(1)(A), added par. (8).
    Subsec. (c). Pub. L. 99-514, Sec. 612(b)(7), which directed that 
``section 116 (relating to an exclusion for dividends received by 
individuals), and'' be struck out, was executed by striking out 
``section 116 (relating to an exclusion for dividends received by 
individuals) and'' before ``section 243'' as the probable intent of 
Congress.
    Subsec. (d). Pub. L. 99-514, Sec. 668(b)(2), amended subsec. (d) 
generally. Prior to amendment, subsec. (d) read as follows: ``The 
earnings and profits of a real estate investment trust for any taxable 
year (but not its accumulated earnings and profits) shall not be reduced 
by any amount which is not allowable as a deduction in computing its 
taxable income for such taxable year. For purposes of this subsection, 
the term `real estate investment trust' includes a domestic corporation, 
trust, or association which is a real estate investment trust determined 
without regard to the requirements of subsection (a).''
    Subsecs. (e), (f). Pub. L. 99-514, Sec. 664(b), added subsec. (e) 
and redesignated former subsec. (e) as (f).
    1984--Subsec. (b)(3)(B). Pub. L. 98-369, Sec. 1001(b)(13), (e), 
substituted ``6 months'' for ``1 year'', applicable to property acquired 
after June 22, 1984, and before Jan. 1, 1988. See Effective Date of 1984 
Amendment note below.
    Subsec. (b)(7). Pub. L. 98-369, Sec. 55(b), substituted provisions 
relating to loss on sale or exchange of stock held 6 months or less for 
provisions which related to loss on sale or exchange of stock held 31 
days or less.
    Pub. L. 98-369, Sec. 1001(b)(13), (e), substituted ``6 months'' for 
``1 year'', applicable to property acquired after June 22, 1984, and 
before Jan. 1, 1988. See Effective Date of 1984 Amendment note below.
    Subsec. (c). Pub. L. 98-369, Sec. 16(a), repealed amendments made by 
Pub. L. 97-34, Sec. 302(c). See 1981 Amendment note below.
    1981--Subsec. (c). Pub. L. 97-34, Sec. 302(c)(5), (d)(1), provided 
for general amendment of subsec. (c) so as to include provisions 
relating to treatment for section 128 of this title, adjustments to 
gross income and aggregate interest received, and notice to 
shareholders, applicable to taxable years beginning after Dec. 31, 1984. 
Section 16(a) of Pub. L. 98-369, repealed section 302(c) of Pub. L. 97-
34, and provided that this title shall be applied and administered as if 
section 302(c), and the amendments made by section 302(c), had not been 
enacted.
    1980--Subsec. (b)(4)(A). Pub. L. 96-222 substituted provisions 
computing the tax on the net income from foreclosure property of every 
real estate investment trust by multiplying the net income from 
foreclosure property by the highest rate of tax specified in section 
11(b) for provisions determining the tax on the net income from 
foreclosure of property of every real estate investment trust by 
applying section 11 to such income as if such income constituted the 
taxable income of a corporation taxable under section 11 and struck out 
provisions requiring that for purposes of the preceding sentence, the 
surtax exemption be zero.
    Subsec. (c). Pub. L. 96-223 temporarily substituted ``Limitations 
applicable to dividends received from real estate investment trusts'' 
for ``Restrictions applicable to dividends received from real estate 
investment trusts'' in heading, designated existing provisions as par. 
(1), substituted ``(1) Capital gain dividend.--For purposes of section 
116 (relating to exclusion for dividends and interest received by 
individuals), a capital gain dividend (as defined in subsection 
(b)(3)(C)) received from a real estate investment trust shall not be 
considered a dividend'' for ``For purposes of section 116 (relating to 
an exclusion for dividends received by individuals) and section 243 
(relating to deductions for dividends received by corporations), a 
dividend received from a real estate investment trust which meets the 
requirements of this part shall not be considered as a dividend'' in 
par. (1) as so designated, and added pars. (2) to (6).
    1978--Subsec. (b)(1). Pub. L. 95-600, Sec. 301(b)(12), substituted 
``a tax'' for ``a normal tax and surtax''.
    Subsec. (b)(3)(A)(ii). Pub. L. 95-600, Sec. 403(c)(3), substituted 
``a tax determined at the rate provided in section 1201(a) on'' for ``a 
tax of 30 percent of''.
    Subsec. (b)(3)(C). Pub. L. 95-600, Sec. 362(d)(3), substituted 
``section 860(e)'' for ``section 859(c)''.
    Subsec. (b)(6)(C) to (E). Pub. L. 95-600, Sec. 363(b), added 
subpars. (C) to (E).
    1976--Subsec. (a). Pub. L. 94-455, Secs. 1604(j), (k)(2)(B), 
1906(b)(13)(A), substituted ``(other than subsection (d) of this section 
and subsection (g) of section 856)'' for ``(other than subsection (d) of 
this section)'' in provisions preceding par. (1), in par. (1) 
redesignated existing subpars. (A) and (B) as cls. (i) and (ii), 
respectively, of subpar. (A), added subpar. (B), in both cls. (i) and 
(ii) of subpar. (A) as redesignated raised the percentage to 95 percent 
for taxable years beginning on and after Jan. 1, 1980, and, in cl. (i) 
of subpar. (A) as redesignated, inserted provision for the exclusion of 
net capital gain, and struck out ``or his delegate'' after ``Secretary'' 
in par. (2).
    Subsec. (b)(1). Pub. L. 94-455, Sec. 1901(b)(1)(V), struck out 
provision that, for purposes of computing the normal tax under section 
11, the taxable income and the dividends paid deduction of such real 
estate investment trust for the taxable year (computed without regard to 
capital gains dividends) would be reduced by the deduction provided by 
section 22 (relating to partially tax-exempt interest.
    Subsec. (b)(2). Pub. L. 94-455, Secs. 1602(b)(2), 1603(c)(5), 
1606(a), (d), 1607(b)(1)(A), (2), struck out subpar. (A) which provided 
for the exclusion of the excess, if any, of the net long-term capital 
gain over the net short-term capital loss, and subpar. (E) which 
prohibited the allowance of the net operating loss deduction provided in 
section 172, redesignated subpars. (B), (C), (D), and (F) as subpars. 
(A), (B), (C), and (D), respectively, added subpars. (E) and (F), and in 
subpar. (B) as redesignated substituted ``subparagraph (D)'' for 
``paragraph (F)'' and struck out ``shall be computed without regard to 
capital gains dividends and'' after ``shall be allowed, but''.
    Subsec. (b)(3)(A). Pub. L. 94-455, Sec. 1607(a), substituted 
provisions setting an alternative tax in case of capital gains under 
which, if for any taxable year, a real estate investment trust has a net 
capital gain, then, in lieu of the tax imposed by subsection (b)(1), 
there is imposed a tax (if such tax is less than the tax imposed by such 
subsection) to consist of the sum of a tax, computed as provided in 
subsection (b)(1), on the real estate investment trust taxable income 
(determined by excluding such net capital gain and by computing the 
deduction for dividends paid without regard to capital gain dividends), 
and a tax of 30 percent of the excess of the net capital gain over the 
deduction for dividends paid (as defined in section 561) determined with 
reference to capital gains dividends only, for provisions posing a tax 
for each taxable year determined as provided in section 1201(a), on the 
excess, if any, of the net long-term capital gain over the sum of the 
net short-term capital loss and the deduction for dividends paid (as 
defined in section 561) determined with reference to capital gains 
dividends only.
    Subsec. (b)(3)(B). Pub. L. 94-455, Sec. 1402(b)(2), provided that 
``9 months'' would be changed to ``1 year''.
    Pub. L. 94-455, Sec. 1402(b)(1)(P), provided that ``6 months'' would 
be changed to ``9 months'' for taxable years beginning in 1977.
    Subsec. (b)(3)(C). Pub. L. 94-455, Secs. 1601(c), 1607(b)(3), 
1901(a)(112), (b)(33)(K), inserted ``; except that, if there is an 
increase in the excess described in subparagraph (A)(ii) of this 
paragraph for such year which results from a determination (as defined 
in section 859(c)), such designation may be made with respect to such 
increase at any time before the expiration of 120 days after the date of 
such determination'' after ``30 days after the close of its taxable 
year'', substituted ``net capital gain'' for ``excess of the net long-
term capital gain over the net short-term capital loss'' in provision 
covering the portion of distributions which shall be capital gain 
dividends, inserted provision that the net capital gain be deemed not to 
exceed the real estate investment trust taxable income, and struck out 
provision which specified the source of deductions for dividends paid in 
the case of taxable years beginning before Jan. 1, 1975.
    Subsec. (b)(4)(B)(i). Pub. L. 94-455, Sec. 1604(c)(2), inserted 
reference to subparagraph (G) of section 856(c)(3).
    Subsec. (b)(5). Pub. L. 94-455, Sec. 1602(b)(1), added par. (5). 
Former par. (5) redesignated (7) and amended.
    Subsec. (b)(6). Pub. L. 94-455, Sec. 1603(b), added par. (6).
    Subsec. (b)(7). Pub. L. 94-455, Sec. 1402(b)(2), provided that ``9 
months'' would be changed to ``1 year''.
    Pub. L. 94-455, Secs. 1402(b)(1)(P), 1602(b)(1), redesignated par. 
(5) as (7) and provided that ``6 months'' would be changed to ``9 
months'' for taxable years beginning in 1977.
    Subsec. (d). Pub. L. 94-455, Sec. 1604(f)(3)(B), substituted ``a 
domestic corporation, trust,'' for ``a domestic unincorporated trust''.
    Subsec. (e). Pub. L. 94-455, Sec. 1605(b)(2), added subsec. (e).
    1975--Subsec. (a)(1). Pub. L. 93-625, Sec. 6(d)(2), incorporated 
existing par. (1) provisions in par. (1) introductory text and 
provisions designated as subpar. (A), substituted in subpar. (A) 
``(determined without regard to the deduction for dividends paid (as 
defined in section 561))'' for ``(determined without regard to 
subsection (b)(2)(C))'', and added subpar. (B).
    Subsec. (b)(2)(C). Pub. L. 93-625, Sec. 6(d)(4), provided for 
computation of deduction for dividends paid without regard to that 
portion of such deduction which is attributable to the amount excluded 
under subparagraph (F).
    Subsec. (b)(2)(F). Pub. L. 93-625, Sec. 6(d)(3), added subpar. (F).
    Subsec. (b)(4), (5). Pub. L. 93-625, Sec. 6(c), added par. (4) and 
redesignated former par. (4) as (5).
    1969--Subsec. (b)(3)(A). Pub. L. 91-172, Sec. 511(c)(3)(A), 
substituted ``determined as provided in section 1201(a), on'' for ``of 
25 percent of.''
    Subsec. (b)(3)(C). Pub. L. 91-172, Sec. 511(c)(3)(B), inserted 
provision requiring for the purposes of the deduction for capital gains 
dividends paid, in the case of a taxable year beginning before Jan. 1, 
1975, the deduction for dividends paid shall first be made from the 
amount subject to tax in accordance with section 1201(a)(1)(B), to the 
extent thereof, and then from the amount subject to tax in accordance 
with section 1201(a)(1)(A).
    1964--Subsec. (c). Pub. L. 88-272 struck out ``section 34(a) 
(relating to credit for dividends received by individuals),'' before 
``section 116'' and the comma before ``and''.


                    Effective Date of 2000 Amendment

    Amendment by Pub. L. 106-554 effective as if included in the 
provisions of the Ticket to Work and Work Incentives Improvement Act of 
1999, Pub. L. 106-170, to which such amendment relates, see section 
1(a)(7) [title III, Sec. 311(d)] of Pub. L. 106-554, set out as a note 
under section 30A of this title.


                    Effective Date of 1999 Amendment

    Amendment by section 532(c)(2)(L), (M) of Pub. L. 106-170 applicable 
to any instrument held, acquired, or entered into, any transaction 
entered into, and supplies held or acquired on or after Dec. 17, 1999, 
see section 532(d) of Pub. L. 106-170, set out as a note under section 
170 of this title.
    Amendment by section 545 of Pub. L. 106-170 applicable to taxable 
years beginning after Dec. 31, 2000, see section 546(a) of Pub. L. 106-
170, set out as a note under section 856 of this title.
    Pub. L. 106-170, title V, Sec. 556(c), Dec. 17, 1999, 113 Stat. 
1949, provided that: ``The amendments made by this section [amending 
this section] shall apply to taxable years beginning after December 31, 
2000.''
    Amendment by section 566(a)(2), (b) of Pub. L. 106-170 applicable to 
distributions after Dec. 31, 2000, see section 566(d) of Pub. L. 106-
170, set out as a note under section 852 of this title.


                    Effective Date of 1998 Amendment

    Amendment by Pub. L. 105-206 effective, except as otherwise 
provided, as if included in the provisions of the Taxpayer Relief Act of 
1997, Pub. L. 105-34, to which such amendment relates, see section 6024 
of Pub. L. 105-206, set out as a note under section 1 of this title.


                    Effective Date of 1997 Amendment

    Amendment by Pub. L. 105-34 applicable to taxable years beginning 
after Aug. 5, 1997, see section 1263 of Pub. L. 105-34, set out as a 
note under section 852 of this title.


                    Effective Date of 1988 Amendment

    Section 1006(s)(5) of Pub. L. 100-647 provided that the amendment 
made by that section is effective with respect to dividends declared in 
1988 and subsequent calendar years.
    Amendment by sections 1006(r), (s)(2), (4) and 1018(u)(28) of Pub. 
L. 100-647 effective, except as otherwise provided, as if included in 
the provision of the Tax Reform Act of 1986, Pub. L. 99-514, to which 
such amendment relates, see section 1019(a) of Pub. L. 100-647, set out 
as a note under section 1 of this title.


                    Effective Date of 1986 Amendment

    Amendment by section 612(b)(7) of Pub. L. 99-514 applicable to 
taxable years beginning after Dec. 31, 1986, see section 612(c) of Pub. 
L. 99-514, set out as a note under section 301 of this title.
    Amendments by sections 661(b), 664, 665(a), (b)(1), and 666 of Pub. 
L. 99-514 applicable to taxable years beginning after Dec. 31, 1986, see 
section 669(a) of Pub. L. 99-514, set out as a note under section 856 of 
this title.
    Amendment by section 668(b)(1)(A), (2), (3) of Pub. L. 99-514 
applicable to calendar years beginning after Dec. 31, 1986, see section 
669(b) of Pub. L. 99-514, set out as a note under section 856 of this 
title.


                    Effective Date of 1984 Amendment

    Amendment by section 16(a) of Pub. L. 98-369 applicable to taxable 
years ending after Dec. 31, 1983, see section 18(a) of Pub. L. 98-369, 
set out as a note under section 48 of this title.
    Amendment by section 55(b) of Pub. L. 98-369 applicable to losses 
incurred with respect to shares of stock and beneficial interest with 
respect to which the taxpayer's holding period begins after July 18, 
1984, see section 55(c) of Pub. L. 98-369, set out as a note under 
section 852 of this title.
    Amendment by section 1001(b)(13) of Pub. L. 98-369 applicable to 
property acquired after June 22, 1984, and before Jan. 1, 1988, see 
section 1001(e) of Pub. L. 98-369, set out as a note under section 166 
of this title.


                    Effective Date of 1980 Amendment

    Amendment by Pub. L. 96-222 effective, except as otherwise provided, 
as if it had been included in the provisions of the Revenue Act of 1978, 
Pub. L. 95-600, to which such amendment relates, see section 201 of Pub. 
L. 96-222, set out as a note under section 32 of this title.


            Effective and Termination Dates of 1980 Amendment

    Amendment by Pub. L. 96-223 applicable with respect to taxable years 
beginning after Dec. 31, 1980, and before Jan. 1, 1982, see section 
404(c) of Pub. L. 96-223, set out as a note under section 265 of this 
title.


                    Effective Date of 1978 Amendment

    Amendment by section 301(b)(12) of Pub. L. 95-600 applicable to 
taxable years beginning after Dec. 31, 1978, see section 301(c) of Pub. 
L. 95-600, set out as a note under section 11 of this title.
    Amendment by section 362(d)(3) of Pub. L. 95-600 applicable with 
respect to determinations (as defined in section 860(e) of this title) 
after Nov. 6, 1978, see section 362(e) of Pub. L. 95-600, set out as an 
Effective Date note under section 860 of this title.
    Amendment by section 363(b) of Pub. L. 95-600 applicable to taxable 
years ending after Nov. 6, 1978, see section 363(d) of Pub. L. 95-600, 
set out as a note under section 856 of this title.
    Amendment by section 403(c)(3) of Pub. L. 95-600 effective on Nov. 
6, 1978, see section 403(d)(3) of Pub. L. 95-600, set out as a note 
under section 528 of this title.


                    Effective Date of 1976 Amendment

    Section 1402(b)(1) of Pub. L. 94-455 provided that the amendment 
made by that section is effective with respect to taxable years 
beginning in 1977.
    Section 1402(b)(2) of Pub. L. 94-455 provided that the amendment 
made by that section is effective with respect to taxable years 
beginning after Dec. 31, 1977.
    Section 1608(a) of Pub. L. 94-455, as amended by Pub. L. 99-514, 
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ``The amendments 
made by section 1601 [enacting sections 859 and 6697 of this title and 
amending this section and sections 316, 381, 6422, 6503, and 6515 of 
this title] shall apply with respect to determinations (as defined in 
section 859(c) of the Internal Revenue Code of 1986 [formerly I.R.C. 
1954]) occurring after the date of the enactment of this Act [Oct. 4, 
1976]. If the amendments made by section 1601 apply to a taxable year 
ending on or before the date of enactment of this Act:
        ``(1) the reference to section 857(b)(3)(A)(ii) in sections 
    857(b)(3)(C) and 859(b)(1)(B) of such Code as amended, shall be 
    considered to be a reference to section 857(b)(3)(A) of such Code, 
    as in effect immediately before the enactment of this Act [Oct. 4, 
    1976], and
        ``(2) the reference to section 857(b)(2)(B) in section 859(a) of 
    such Code, as amended, shall be considered to be a reference to 
    section 857(b)(2)(C) of such Code, as in effect immediately before 
    the enactment of this Act [Oct. 4, 1976].''
    For effective date of amendment by section 1602(b)(1), (2) of Pub. 
L. 94-455, see section 1608(b) of Pub. L. 94-455, set out as a Trust Not 
Disqualified in Certain Cases Where Income Tests Not Met note under 
section 856 of this title.
    For effective date of amendment by sections 1603, 1604, and 1605 of 
Pub. L. 94-455, see section 1608(d) of Pub. L. 94-455, set out as a note 
under section 856 of this title.
    Section 1608(c) of Pub. L. 94-455, as amended by Pub. L. 99-514, 
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ``The amendments 
made by sections 1606 and 1607 [amending this section and sections 46, 
172, and 443 of this title] shall apply to taxable years ending after 
the date of the enactment of this Act [Oct. 4, 1976]; except that in the 
case of a taxpayer which has a net operating loss (as defined in section 
172(c) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) for 
any taxable year ending after the date of enactment of this Act [Oct. 4, 
1976] for which the provisions of part II of subchapter M of chapter 1 
of subtitle A of such Code apply to such taxpayer, such loss shall not 
be a net operating loss carryback under section 172 of such Code to any 
taxable year ending on or before the date of enactment of this Act [Oct. 
4, 1976].''
    Amendment by section 1901(a)(112), (b)(1)(V), (33)(K) of Pub. L. 94-
455 effective for taxable years beginning after Dec. 31, 1976, see 
section 1901(d) of Pub. L. 94-455, set out as a note under section 2 of 
this title.


                    Effective Date of 1975 Amendment

    Amendment by Pub. L. 93-625 applicable to foreclosure property 
acquired after Dec. 31, 1973, see section 6(e) of Pub. L. 93-625, set 
out as a note under section 856 of this title.


                    Effective Date of 1969 Amendment

    Amendment by Pub. L. 91-172 applicable with respect to taxable years 
beginning after Dec. 31, 1969, see section 511(d) of Pub. L. 91-172, set 
out as an Effective Date note under section 1201 of this title.


                    Effective Date of 1964 Amendment

    Amendment by Pub. L. 88-272 applicable with respect to dividends 
received after Dec. 31, 1964, in taxable years ending after such date, 
see section 201(e) of Pub. L. 88-272, set out as a note under section 22 
of this title.


                             Effective Date

    Section applicable with respect to taxable years of real estate 
investment trusts beginning after Dec. 31, 1960, see section 10(k) of 
Pub. L. 86-779, set out as a note under section 856 of this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 172, 291, 443, 774, 856, 
858, 860, 860E, 860G, 1201, 4981 of this title.
