PUBLIC LAW 98-369—JULY 18, 1984
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98 STAT. 569
"(3) QUALIFIED DIVIDEND.—The term 'qualified dividend' means any distribution of property to a shareholder other than a corporation if— "(A) such distribution is a dividend, "(B) such property was used by the distributing corporation in the active conduct of a qualified business (as defined in paragraph (2)), and "(C) such property is not property described in paragraph (Dor (4) of section 1221." (3) CLERICAL AMENDMENT.—The subsection heading of subsection (d) of section 311 is amended to read as follows:
26 USC 311.
"(d) DISTRIBUTIONS OF APPRECIATED PROPERTY.—". (b) HOLDING PERIOD OF CORPORATE DISTRIBUTEE OF APPRECIATED
PROPERTY.—Section 301 (relating to distributions of property) is amended by redesignating subsection (e) as subsection (f) and by inserting after subsection (d) the following new subsection:
26 USC 301.
"(e) SPECIAL RULE FOR HOLDING PERIOD OF APPRECIATED PROPERTY DISTRIBUTED TO CORPORATION.—For purposes of this subtitle— "(1) WHERE GAIN RECOGNIZED UNDER SECTION 3ii(d).—If—
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"(A) property is distributed to a corporation, and "(B) gain is recognized on such distribution under paragraph (1) of section 311(d), then such corporation's holding period in the distributed property shall begin on the date of such distribution.
Ante, p. 568.
"(2) WHERE GAIN NOT RECOGNIZED UNDER SECTION 3ii(d).—
If— i
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"(A) property is distributed to a corporation, "(B) gain is not recognized on such distribution under paragraph (1) of section 311(d), and "(C) the basis of such property in the hands of such corporation is determined under subsection (d)(2)(B), then (except for purposes of section 1248) such corporation shall not be treated as holding the distributed property during any period before the date on which such corporation's holding period in the stock began." (c) CROSS REFERENCE.—Paragraph (13) of section 1223 (relating to
ja^,-. t. A
Post, p. 890.
holding period of property) is amended to read as follows: "(13) CROSS REFERENCES.— "(A) For special holding period provision relating to certain partnership distributions, see section 735(b). "(B) For special holding period provision relating to distributions of appreciated property to corporations, see section 301(e)."
(d) EFFECTIVE DATES.— (1) SUBSECTION (a).—Except as otherwise provided in this subsection, the amendments made by subsection (a) shall apply to distributions declared on or after June 14, 1984, in taxable years ending after such date. (2) SUBSECTION (b).—The amendment made by subsection (b) f shall apply to distributions after the date of the enactment of this Act in taxable years ending after such date. (
(3) EXCEPTION FOR DISTRIBUTIONS BEFORE JANUARY i, 1985, TO 80-PERCENT CORPORATE SHAREHOLDERS.—
(A) IN GENERAL.—The amendments made by subsection (a) shall not apply to any distribution before January 1, 1985, to an 80-percent corporate shareholder if the basis of
Supra.
26 USC 3ii note.
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