[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3501 Introduced in House (IH)]







110th CONGRESS
  1st Session
                                H. R. 3501

To amend the Internal Revenue Code of 1986 to provide that indebtedness 
 incurred by a partnership in acquiring securities and commodities is 
  not treated as acquisition indebtedness by organizations which are 
  limited partners for purposes of the unrelated business income tax.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 7, 2007

   Mr. Levin (for himself, Mr. McDermott, Mr. Lewis of Georgia, Mr. 
Pomeroy, Mr. Blumenauer, Mr. Pascrell, Ms. Berkley, and Mr. Van Hollen) 
 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 indebtedness 
 incurred by a partnership in acquiring securities and commodities is 
  not treated as acquisition indebtedness by organizations which are 
  limited partners for purposes of the unrelated business income tax.

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

SECTION 1. INDEBTEDNESS INCURRED BY A PARTNERSHIP IN ACQUIRING 
              SECURITIES AND COMMODITIES NOT TREATED AS ACQUISITION 
              INDEBTEDNESS FOR ORGANIZATIONS WHICH ARE LIMITED 
              PARTNERS.

    (a) In General.--Subsection (c) of section 514 of the Internal 
Revenue Code of 1986 (relating to acquisition indebtedness) is amended 
by adding at the end the following new paragraph:
            ``(10) Securities and commodities acquired by partnerships 
        in which an organization is a limited partner.--
                    ``(A) In general.--In the case of any organization 
                which is a limited partner in a partnership, the term 
                `acquisition indebtedness' does not, for purposes of 
                this section, include indebtedness incurred or 
                continued by such partnership in purchasing or carrying 
                any qualified security or commodity.
                    ``(B) Application of certain allocation 
                requirements.--The provisions of subparagraph (A) shall 
                not apply unless the requirements of subclause (II) or 
                (III) of paragraph (9)(B)(vi) are met with respect to 
                such partnership.
                    ``(C) Qualified security or commodity.--For 
                purposes of this paragraph, the term `qualified 
                security or commodity' means any security (as defined 
                in section 475(c)(2) without regard to the last 
                sentence thereof), any commodity (as defined in section 
                475(e)(2)), or any option or derivative contract with 
                respect to such a security or commodity.
                    ``(D) Application to tiered partnerships and other 
                pass-thru entities.--Rules similar to the rules of 
                subparagraphs (A) and (B) shall apply in the case of 
                tiered partnerships and other pass-thru entities.
                    ``(E) Regulations.--The Secretary may prescribe 
                such regulations as may be necessary or appropriate to 
                carry out the purposes of this paragraph, including 
                regulations providing for the application of rules 
                similar to the rules of clauses (i) through (v) of 
                paragraph (9)(B) for purposes of subparagraphs (A) and 
                (B) of this paragraph.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act 
 
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