[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 545 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 545

    To amend the Internal Revenue Code of 1986 to provide that the 
 provision enacted as part of the Energy Policy Act of 1992 requiring 
    the recognition of precontribution gain in the case of certain 
  partnership distributions to a contributing partner shall be fully 
                  prospective, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 21, 1993

Mr. Torricelli introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
    To amend the Internal Revenue Code of 1986 to provide that the 
 provision enacted as part of the Energy Policy Act of 1992 requiring 
    the recognition of precontribution gain in the case of certain 
  partnership distributions to a contributing partner shall be fully 
                  prospective, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. MODIFICATION OF RULES REQUIRING RECOGNITION OF 
              PRECONTRIBUTION GAIN IN CASE OF CERTAIN PARTNERSHIP 
              DISTRIBUTIONS TO CONTRIBUTING PARTNER.

    (a) Provision To Be Prospective.--Subsection (c) of section 1937 of 
the Energy Policy Act of 1992 is amended by striking ``distributions'' 
and inserting ``Property contributed to a partnership''.
    (b) Precontribution Gain Determined Without Netting Losses.--
            (1) Subsection (b) of section 737 of such Code is amended 
        by striking ``net gain'' and inserting ``gain''.
            (2) Subsections (a) and (b) of section 737 of such Code are 
        each amended by striking ``net precontribution gain'' each 
        place it appears and inserting ``precontribution gain''.
    (c) Interest Charge.--Section 737 of such Code is amended by adding 
at the end thereof the following new subsection:
    ``(e) Interest Charge Imposed on Gain Recognized.--
            ``(1) In general.--If any portion of the gain recognized 
        under subsection (a) for any taxable year is attributable to 
        property contributed prior to such taxable year, the taxpayer's 
        tax imposed by this chapter for such taxable year shall be 
        increased by the aggregate of the additional amounts determined 
        under paragraph (2) with respect to each such property.
            ``(2) Additional amount.--For purposes of paragraph (1), 
        the additional amount with respect to any property shall be 
        equal to the aggregate amount of interest (determined at the 
        rate applicable under section 6621(a)(2) for the month with or 
        within which any taxable year ends) that would accrue--
                    ``(A) on an amount equal to the deferred tax 
                liability for the taxable year which is attributable to 
                such property,
                    ``(B) during the period--
                            ``(i) ending on the due date for filing the 
                        return for such taxable year (determined 
                        without regard to extensions), and
                            ``(ii) beginning on the due date for filing 
                        the return for the taxable year (determined 
                        without regard to extensions) of the taxpayer 
                        during which the property was contributed.
            ``(3) Deferred tax liability.--For purposes of paragraph 
        (2), the term `deferred tax liability' means, with respect to 
        any property, the product of--
                    ``(A) the amount of gain recognized under 
                subsection (a) with respect to such property, and
                    ``(B) the maximum rate of tax in effect under 
                section 1 or 11, whichever is appropriate, for the 
                taxable year of the taxpayer during which such property 
                was contributed.
            ``(4) Special rule.--Any increase in tax under subsection 
        shall not be treated as a tax imposed by this chapter for 
        purposes of--
                    ``(A) determining the amount of any credit 
                allowable under this chapter, and
                    ``(B) determining the amount of the tax imposed by 
                section 55.''
    (d) Effective Date.--The amendments made by this section shall take 
effect as if included in the amendments made by section 1937 of the 
Energy Policy Act of 1992 on the date of the enactment of such Act.

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