[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 972 Introduced in Senate (IS)]

103d CONGRESS
  1st Session
                                 S. 972

  To clarify that certain Federal assistance provided with respect to 
      domestic building and loan associations shall be treated as 
compensation for purposes of determining the deduction for losses, and 
                          for other purposes.


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                   IN THE SENATE OF THE UNITED STATES

                May 18 (legislative day, April 19), 1993

  Mr. Dorgan introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  To clarify that certain Federal assistance provided with respect to 
      domestic building and loan associations shall be treated as 
compensation for purposes of determining the deduction for losses, 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. TREATMENT OF CERTAIN FEDERAL ASSISTANCE PROVIDED WITH 
              RESPECT TO DOMESTIC BUILDING AND LOAN ASSOCIATIONS.

    (a) General Rule.--For purposes of chapter 1 of the Internal 
Revenue Code of 1986--
            (1) any section 597 payment made with respect to any loss 
        of principal, capital, or similar amount upon the disposition 
        of any asset shall be taken into account as compensation for 
        such loss for purposes of section 165 of such Code, and
            (2) any section 597 payment made with respect to any debt 
        shall be taken into account for purposes of section 166, 585, 
        or 593 of such Code in determining whether such debt is 
        worthless (or the extent to which such debt is worthless) and 
        in determining the amount of any addition to a reserve for bad 
        debts arising from the worthlessness or partial worthlessness 
        of such debts.
    (b) Section 597 Payment.--For purposes of subsection (a), the term 
``section 597 payment'' means any assistance provided after December 
31, 1980, if section 597 of the Internal Revenue Code 1986 (as in 
effect with respect to such assistance) excluded such assistance from 
gross income. Such term shall not include payments to which the 
amendments made by section 1401(a)(3) of the Financial Institution 
Reform, Recovery, and Enforcement Act of 1989 apply.
    (c) Treatment of Amounts Paid for Repurchase of Assets.--Nothing in 
section 597 of the Internal Revenue Code of 1986 shall be construed to 
exclude from gross income any amount paid by the Federal Savings and 
Loan Insurance Corporation, the FSLIC Resolution Fund, the Resolution 
Trust Corporation, or the Federal Deposit Insurance Corporation for the 
repurchase of an asset or to exclude such amount in determining gain or 
loss under section 1001 of such Code.
    (d) Effective Date.--This section shall apply to taxable years 
ending after December 31, 1980.

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