Page:United States Statutes at Large Volume 100 Part 3.djvu/921

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PUBLIC LAW 99-000—MMMM. DD, 1986

PUBLIC LAW 99-514—OCT. 22, 1986

100 STAT. 2729

"(b) INFORMATION RETURNS.—The Secretary may by regulations

require a return to be filed containing such information as he determines to be necessary for purposes of this chapter. "SEC. 2663. REGULATIONS.

"The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this chapter, including— "(1) such regulations as may be necessary to coordinate the provisions of this chapter with the recapture tax imposed under section 2032A(c), and "(2) regulations (consistent with the principles of chapters 11 and 12) providing for the application of this chapter in the case of transferors who are nonresidents not citizens of the United States." (b) CLERICAL AMENDMENT.—The table of chapters for subtitle B is amended by striking out the item relating to chapter 13 and inserting in lieu thereof the following: "CHAPTER 13. Tax on generation-skipping transfers." SEC. 1432. RELATED AMENDMENTS. (a) INCOME TAX DEDUCTION FOR GENERATION-SKIPPING TRANSFER TAX.—

(1) IN GENERAL.—Subsection (a) of section 164 (relating to deduction for certain taxes), as amended by section 134, is amended by inserting after paragraph (4) the following new paragraph: "(5) the GST tax imposed on income distributions." (2) DEFINITIONS.—Subsection (b) of section 164, as so amended, is amended by adding at the end thereof the following new paragraph: "(4) SPECIAL RULES FOR GST TAX.—

"(A) IN GENERAL.—The GST tax imposed on income distributions is— "(i) the tax imposed by section 2601, and "(ii) any State tax described in section 2604, but only to the extent such tax is imposed on a transfer which is included in the gross income of the distributee and to which section 666 does not apply. "(B) SPECIAL RULE FOR TAX PAID BEFORE DUE DATE.—Any

tax referred to in subparagraph (A) imposed with respect to a transfer occurring during the taxable year of the distributee (or, in the case of a taxable termination, the trust) which is paid not later than the time prescribed by law (including extensions) for filing the return with respect to such transfer shall be treated as having been paid on the last day of the taxable year in which the transfer was made." (3) DEDUCTION FOR TAX IN CASE OF TAXABLE TERMINATIONS.—

Paragraph (3) of section 691(c) (relating to deduction for estate tax) is amended to read as follows: "(3) SPECIAL RULE FOR GENERATION-SKIPPING TRANSFERS.—In

the case of any tax imposed by chapter 13 on a taxable termination or a direct skip occurring as a result of the death of the transferor, there shall be allowed a deduction (under principles similar to the principles of this subsection) for the portion of such tax attributable to items of gross income of the trust which