100 STAT. 2220
PUBLIC LAW 99-514—OCT. 22, 1986 '
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"(i) the net capital gain determined by taking into account only gain or loss which is properly taken into account for the portion of the taxable year before January 1, 1987, or ';^ "(ii) the net capital gain for the taxable year, and "(B) 34 percent of the excess (if any) of^ "(i) the net capital gain for the taxable year, over "(ii) the amount of the net capital gain taken into account under subparagraph (A)." (2) REVOCATION OF ELECTIONS UNDER SECTION 631(a).—Any election under section 631(a) of the Internal Revenue Code of 1954 made (whether by a corporation or a person other than a corporation) for a taxable year beginning before January 1, 1987, may be revoked by the taxpayer for any taxable year ending after December 31, 1986. For purposes of determining whether the taxpayer may make a further election under such section, such election (and any revocation under this paragraph) shall not be taken into account.
Subtitle C—Incentive Stock Options SEC. 321. REPEAL OF REQUIREMENT THAT INCENTIVE STOCK OPTIONS ARE EXERCISABLE ONLY IN CHRONOLOGICAL ORDER; MODIFICATION OF $100,000 LIMITATION.
(a) GENERAL RULE.—Subsection (b) of section 422A is amended by inserting "and" at the end of paragraph (6) and by striking out paragraphs (7) and (8) and inserting in lieu thereof the following new paragraph: "(7) under the terms of the plan, the aggregate fair market value (determined at the time the option is granted) of the stock with respect to which incentive stock options are exercisable for the 1st time by such individual during any calendar year (under all such plans of the individual's employer corporation and its parent and subsidiary corporations) shall not exceed $100,000." 0)) CONFORMING AMENDMENTS.—
(1) Subsection (c) of section 422A is amended— (A) by striking out paragraphs (4) and (7), and (B) by redesignating paragraphs (5), (6), (8), (9), and (10) as paragraphs (4), (5), (6), (7), and (8), respectively. (2) The last sentence of section 422A(c)(l) is amended by striking out "paragraph (8) of subsection (b) and paragraph (4) of this subsection" and inserting in lieu thereof "paragraph (7) of subsection (b)". (c) EFFECTIVE DATE.—The amendments made by this section shall apply to options granted after December 31, 1986.
Subtitle D—Straddles SEC. 331. YEAR-END RULE EXPANDED.
(a) IN GENERAL.—Subparagraph (E) of section 1092(c)(4) (defining straddle) is amended— (1) by inserting "or the stock is disposed of at a loss" in clause (i) after "closed", (2) by striking out "is" in clause (ii) and inserting in lieu thereof "or gains on such options are", and
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