110 HR 3501 IH: To amend the Internal Revenue Code of 1986 to provide U.S. House of Representatives 2007-09-07 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

I 110th CONGRESS 1st Session H. R. 3501 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.

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 .