[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4393 Introduced in House (IH)]







109th CONGRESS
  1st Session
                                H. R. 4393

 To amend the Internal Revenue Code of 1986 to clarify the application 
                    of section 584(h) of such Code.


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                    IN THE HOUSE OF REPRESENTATIVES

                           November 18, 2005

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

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                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to clarify the application 
                    of section 584(h) of such Code.

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

SECTION 1. CLARIFICATION OF NONRECOGNITION RULES TO TIERED COMMON 
              TRUSTS FUNDS.

    (a) In General.--Subsection (h) of section 584 of the Internal 
Revenue Code of 1986 (relating to nonrecognition treatment for certain 
transfers to regulated investment companies) is amended by adding at 
the end the following new paragraph:
            ``(5) Tiered common trust funds.--
                    ``(A) In general.--If--
                            ``(i) substantially all of the assets of a 
                        common trust fund is stock in one or more 
                        regulated investment companies,
                            ``(ii) at least some of such stock was 
                        received in an exchange described in paragraph 
                        (1)(B) on which no gain or loss was recognized, 
                        and
                            ``(iii) the stock described in clause (i) 
                        is distributed by such common trust fund to 
                        participants in such common trust fund in 
                        exchange solely for their interests in such 
                        common trust fund,
                no gain or loss shall be recognized by such common 
                trust fund by reason of such distribution, and no gain 
                or loss shall be recognized by any participant in such 
                common trust fund by reason of such exchange.
                    ``(B) Basis rules.--The basis of stock received in 
                an exchange referred to in subparagraph (A)(iii) shall 
                be determined under paragraph (2)(B).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to distributions after the date of the enactment of this Act in taxable 
years ending after such date.
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