[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 2122 Introduced in Senate (IS)]







105th CONGRESS
  2d Session
                                S. 2122

  To amend the Internal Revenue Code of 1986 to provide that certain 
 liquidating distributions of a regulated investment company or a real 
  estate investment trust which are allowable as a deduction shall be 
            included in the gross income of the distributee.


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                   IN THE SENATE OF THE UNITED STATES

                              May 22, 1998

Mr. Roth (for himself and Mr. Moynihan) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

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                                 A BILL


 
  To amend the Internal Revenue Code of 1986 to provide that certain 
 liquidating distributions of a regulated investment company or a real 
  estate investment trust which are allowable as a deduction shall be 
            included in the gross income of the distributee.

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

SECTION 1. TREATMENT OF CERTAIN DEDUCTIBLE LIQUIDATING DISTRIBUTIONS OF 
              REGULATED INVESTMENT COMPANIES AND REAL ESTATE INVESTMENT 
              TRUSTS.

    (a) In General.--Section 332 of the Internal Revenue Code of 1986 
(relating to complete liquidations of subsidiaries) is amended by 
adding at the end the following new subsection:
    ``(c) Deductible Liquidating Distributions of Regulated Investment 
Companies and Real Estate Investment Trusts.--If a corporation receives 
a distribution from a regulated investment company or a real estate 
investment trust which is considered under subsection (b) as being in 
complete liquidation of such company or trust, then, notwithstanding 
any other provision of this chapter, such corporation shall recognize 
and treat as a dividend from such company or trust an amount equal to 
the deduction for dividends paid allowable to such company or trust by 
reason of such distribution.''.
    (b) Conforming Amendments.--
            (1) The material preceding paragraph (1) of section 332(b) 
        of such Code is amended by striking ``subsection (a)'' and 
        inserting ``this section''.
            (2) Paragraph (1) of section 334(b) of such Code is amended 
        by striking ``section 332(a)'' and inserting ``section 332''.
    (c) Effective Date.--The amendments made by this section shall 
apply to distributions after May 21, 1998.
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