[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2374 Introduced in House (IH)]







107th CONGRESS
  1st Session
                                H. R. 2374

   To amend the Internal Revenue Code of 1986 to treat certain motor 
 vehicle dealer transitional assistance as an involuntary conversion, 
                        and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 28, 2001

   Mr. Camp 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 treat certain motor 
 vehicle dealer transitional assistance as an involuntary conversion, 
                        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. MOTOR VEHICLE DEALER TRANSITIONAL ASSISTANCE TREATED AS AN 
              INVOLUNTARY CONVERSION.

    (a) In General.--For purposes of subtitle A of the Internal Revenue 
Code of 1986, in the case of a taxpayer who was a party to a motor 
vehicle sales and service agreement with a motor vehicle manufacturer 
who announced in December 2000 that it would phase-out the motor 
vehicle brand to which such agreement relates--
            (1) amounts received by such taxpayer from such 
        manufacturer on account of the termination of such agreement 
        shall be treated as received in an involuntary conversion to 
        which section 1033 of such Code applies, and
            (2) the period described in section 1033(a)(2)(B) of such 
        Code shall begin on December 12, 2000.
    (b) Character of Converted Property.--In applying section 1033 of 
such Code for purposes of this section, the property involuntarily 
converted shall be treated as being property used in the trade or 
business of a motor vehicle retail sales and service dealership.
    (c) Deduction for Interest on Deficiencies.--In the case of a 
taxpayer who makes an election under subparagraph (A) of section 
1033(a)(2) of such Code pursuant to this section, any interest 
attributable to a deficiency referred to in subparagraph (C) of such 
section shall be allowable as a deduction under subtitle A of such Code 
notwithstanding any law or rule of law.
    (d) Exception From Tax on Certain Built-In Gains of S 
Corporations.--Solely for purposes of section 1374 of such Code, in the 
case of a corporation which elects before June 28, 2001, to be an S 
corporation (as defined in section 1361 of such Code), payments 
referred to in subsection (a) (whether or not an election under section 
1033 of such Code is made pursuant to this section) shall not be taken 
into account in computing net recognized built-in gain of such 
corporation.
    (e) Installment Sales Treatment.--Amounts referred to in subsection 
(a)(1) with respect to which the taxpayer does not make an election 
under subparagraph (A) of section 1033(a)(2) of such Code shall be 
treated for purposes of such Code as received from an installment sale 
to which section 453 applies.
    (f) Effective Date.--This section shall apply to amounts received 
after December 12, 2000, in taxable years ending after such date.
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