90 STAT. 1605
PUBLIC LAW 94-455—OCT. 4, 1976
each shareholder owns in the controlling corporation bears to the total fair market value of all the stock in the controlling corporation. " (c) KuLES RELATING TO STOCK.—For purposes of this section— " (1) The term 'stock' means all shares of stock, except stock which— " (A) is not entitled to vote, " (B) is fixed and preferred as to dividends and does not participate in corporate growth to any significant extent, " (C) has redemption and liquidation rights which do not exceed the paid-in capital or p a r value represented by such stock (except for a reasonable redemption premium in excess of such paid-in capital or p a r value), and " (D) is not convertible into another class of stock. " (2) The term 'participating stock' means stock (including common stock) which represents an interest in the earnings and assets of the issuing corporation which is not limited to a stated amount of money or property or percentage of paid-in capital or p a r value, or by any similar formula. " (3) The Secretary shall prescribe regulations under which— " (A) stock or convertible securities shall be treated as stock or participating stock, or " (B) stock (however denoted) shall not be treated as stock or participating stock, by reason of conversion and call rights, rights in earnings and assets, priorities and preferences as to distributions of earnings or assets, and similar factors."' (f)
CONFORMING AMENDMENTS. — (1) AMENDMENT OF SECTION 368.—Section 368(c)
( r e l a t i n g to
, "Stock."
"Participating stock."
Regulations.
26 USC 368.
the definition of control) is amended by striking out " and this part, " and inserting in lieu thereof "this part, and part V,'\ (2) AMENDMENT OF SECTION 383.—Section 383
( r e l a t i n g to
26 USC 383.
special limitations on certain carryovers) is amended to read as follows: ' "SEC. 383. SPECIAL LIMITATIONS ON UNUSED INVESTMENT CREDITS, WORK INCENTIVE PROGRAM CREDITS, FOREIGN TAXES, AND CAPITAL LOSSES. " I n the case of a change of ownership of a corporation in the manner described in section 382(a) or (b), the limitations provided in section Ante, p. 1599, 382 in such cases with respect to net operating losses shall apply i n the same manner, as provided under regulations prescribed by the Secretary, with respect to any unused investment credit of the corporation under section 4 6 (b), to any unused work incentive program credit of Ante, p. 1582. the corporation under section 5 0 A (b), to any excess foreign taxes of the corporation under section 9 0 4 (d), and to any net capital loss of the Post, p. 1620. corporation under section 1212." (g) EFFECTIVE D A T E. —
(1) The amendments made by subsections (a), (b), (c), and (d) shall apply to losses incurred in taxable years ending after December 31, 1975. (2) For purposes of applying sections 382(a) and 383 (as it relates to section 3 8 2 (a)) of the Internal Revenue Code of 1954, as amended by subsections (e) and (f), the amendments made by subsections (e) and (f) shall take effect for taxable years beginning after June 30, 1978, except that the beginning of the taxable years specified i n clause (ii) of section 382(a)(1)(B) of
26 USC 172 note. 26 USC 382 note.
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