PUBLIC LAW 105-34—AUG. 5, 1997 111 STAT. 985 For purposes of the preceding sentence, the value of any transferred property is its fair market value at the time of its transfer. "(2) SPECIAL RULE. —I f by reason of an adjustment under section 482 or otherwise, a contribution described in subsection (a)(1) is deemed to have been made, such contribution shall be treated for purposes of this section as having been made not earlier than the date specified by the Secretary.". (c) MODIFICATION OF PENALTY APPLICABLE TO FOREIGN COR- PORATIONS AND PARTNERSHIPS. — (1) IN GENERAL. —Paragraph (1) of section 6038B(b) is amended by striking "equal to" and all that follows and inserting "equal to 10 percent of the fair market value of the property at the time of the exchange (and, in the case of a contribution described in subsection (a)(1)(B), such person shall recognize gain as if the contributed property had been sold for such value at the time of such contribution).". (2) LIMIT ON PENALTY.— Section 6038B(b) is amended by adding at the end the following new paragraph: "(3) LIMIT ON PENALTY.—The penalty under paragraph (1) with respect to any exchange shall not exceed $100,000 unless the failure with respect to such exchange was due to intentional disregard.". (d) EFFECTIVE DATE. — 26 USC 6038B (1) IN GENERAL.—The amendments made by this section note. shall apply to transfers made after the date of the enactment of this Act. (2) ELECTION OF RETROACTIVE EFFECT. — Section 1494(c) of the Internal Revenue Code of 1986 shall not apply to any transfer after August 20, 1996, if all applicable reporting requirements under section 6038B of such Code (as amended by this section) are satisfied. The Secretary of the Treasury or his delegate may prescribe simplified reporting requirements under the preceding sentence. SEC. 1145. EXTENSION OF STATUTE OF LIMITATIONS FOR FOREIGN TRANSFERS. (a) IN GENERAL. — Paragraph (8) of section 6501(c) (relating to failure to notify Secretary under section 6038B) is amended to read as follows: "(8) FAILURE TO NOTIFY SECRETARY OF CERTAIN FOREIGN TRANSFERS.—In the case of any information which is required to be reported to the Secretary under section 6038, 6038A, 6038B, 6046, 6046A, or 6048, the time for assessment of any tax imposed by this title with respect to any event or period to which such information relates shall not expire before the date which is 3 years after the date on which the Secretary is furnished the information required to be reported under such section.". (b) EFFECTIVE DATE. —The amendment made by subsection (a) shall apply to information the due date for the reporting of which is after the date of the enactment of this Act.
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