PUBLIC LAW 105-34—AUG. 5, 1997 111 STAT. 861 "(1) IN GENERAL.—For purposes of determining whether any transfer is a generation-skipping transfer, if— "(A) an individual is a descendant of a parent of the transferor (or the transferor's spouse or former spouse), and "(B) such individual's parent who is a lineal descendant of the parent of the transferor (or the transferor's spouse or former spouse) is dead at the time the transfer (from which an interest of such individual is established or derived) is subject to a tax imposed by chapter 11 or 12 upon the transferor (and if there shall be more than 1 such time, then at the earliest such time), such individual shall be treated as if such individual were a member of the generation which is 1 generation below the lower of the transferor's generation or the generation assignment of the yoimgest living ancestor of such individual who is also a descendant of the parent of the transferor (or the transferor's spouse or former spouse), and the generation assignment of any descendant of such individual shall be adjusted accordingly. " (2) LIMITED APPLICATION OF SUBSECTION TO COLLATERAL HEIRS. —T h is subsection shall not apply with respect to a transfer to any individual who is not a lineal descendant of the transferor (or the transferor's spouse or former spouse) if, at the time of the transfer, such transferor has any living lineal descendant. ". (b) CONFORMING AMENDMENTS.— (1) Section 2612(c) (defining direct skip) is amended by striking paragraph (2) and by redesignating paragraph (3) as paragraph (2). (2) Section 2612(c)(2) (as so redesignated) is amended by striking "section 2651(e)(2)" and inserting "section 2651(f)(2)". (c) EFFECTIVE DATE. —The amendments made by this section 26 USC 2612 shall apply to terminations, distributions, and transfers occurring note. after December 31, 1997. TITLE VI—EXTENSIONS SEC. 601. RESEARCH TAX CREDIT. (a) IN GENERAL. —Paragraph (1) of section 41(h) (relating to termination) is amended— (1) by striking "May 31, 1997" and inserting "June 30, 1998", and (2) by striking in the last sentence "during the first 11 months of such taxable year." and inserting "during the 24- month period beginning with the first month of such year. The 24 months referred to in the preceding sentence shall be reduced by the number of full months after June 1996 (and before the first month of such first taxable year) during which the taxpayer paid or incurred any amount which is taken into account in determining the credit under this section.". (b) TECHNICAL AMENDMENTS. — (1) Subparagraph (B) of section 41(c)(4) is amended to read as follows:
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