PUBLIC LAW 103-66—AUG. 10, 1993 107 STAT. 541 SEC. 13262. TREATMENT OF CERTAIN PAYMENTS TO RETIRED OR DECEASED PARTNER. (a) SECTION 736(b) NOT TO APPLY IN CERTAIN CASES.— Subsection (b) of section 736 (relating to payments for interest in partnership) is amended by adding at the end thereof the following 26 USC 736. new paragraph:
- (3) LIMITATION ON APPLICATION OF PARAGRAPH (2). —Paragraph (2) shall apply only if—
"(A) capital is not a material income-producing factor for the partnership, and "(B) the retiring or deceased partner was a general partner in the partnership." (b) LIMITATION ON DEFINITION OF UNREALIZED RECEIVABLES. — (1) IN GENERAL. —Subsection (c) of section 751 (defining unrealized receivables) is amended— (A) by striking sections 731, 736, and 741" each place they appear and inserting ", sections 731 and 741 (but not for purposes of section 736)", and (B) by striking "section 731, 736, or 741" each place it appears and inserting "section 731 or 741". (2) TECHNICAL AMENDMENTS. — (A) Subsection (e) of section 751 is amended by striking "sections 731, 736, and 741" and inserting "sections 731 and 741". (B) Section 736 is amended by striking subsection (c). (c) EFFECTIVE DATE. — 26 USC 736 note. (1) IN GENERAL. —The amendments made by this section shall apply in the case of partners retiring or dying on or after January 5, 1993. (2) BINDING CONTRACT EXCEPTION. —The amendments made by this section shall not apply to any partner retiring on or after January 5, 1993, if a written contract to purchase such partner's interest in the partnership was binding on January 4, 1993, and at all times thereafter before such purchase. PART VII—MISCELLANEOUS PROVISIONS SEC. 13271. DISALLOWANCE OF INTEREST ON CERTAIN OVERPAY- MENTS OF TAX. (a) GENERAL RULE.—Subsection (e) of section 6611 is amended to read as follows: "(e) DISALLOWANCE OF INTEREST ON CERTAIN OVERPAYMENTS. — "(1) REFUNDS WITHIN 46 DAYS AFTER RETURN IS FILED. — If any overpayment of tax imposed by this title is refunded within 45 days after the last day prescribed for filing the return of such tax (determined without regard to any extension of time for filing the return) or, in the case of a return filed after such last date, is refunded within 45 days after the date the return is filed, no interest shall be allowed under subsection (a) on such overpa3ment. "(2) REFUNDS AFTER CLAIM FOR CREDIT OR REFUND. —If— "(A) the taxpayer files a claim for a credit or refund for any overpayment of tax imposed by this title, and "(B) such overpayment is refunded within 45 days after such claim is filed,
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