PUBLIC LAW 100-647—NOV. 10, 1988
102 STAT. 3409
for the period during which it was owned (or treated as owned) by such estate or any such trust or by the decedent. "(D) SPECIAL HOLDING PERIOD RULES.—Any property ac- Real property, quired by reason of the death of an individual shall be treated as owned at all times during which such property was owned (or treated as owned) by the decedent. "(E) CONTROLLED GROUP OF CORPORATIONS.—All members
of the same controlled group (as defined in section 267(f)(1) of such Code) shall be treated as 1 corporation for purposes of determining whether any of such corporations met the requirement of paragraph (5)(B) and for purposes of determining the applicable percentage with respect to any of such corporations. For purposes of the preceding sentence, an S corporation shall not be treated as a member of a controlled group unless such corporation was a C corporation for its taxable year which includes August 1, 1986, or it was not described for such taxable year in paragraph (1) or (2) of section 1374(c) of such Code (as in effect on the day before the date of the enactment of this Act)." (6) Subsection (d) of section 633 of the Reform Act is amended 26 USC 336 note. by adding at the end thereof the following new paragraph: "(9)
APPLICATION TO NONUQUIDATING DISTRIBUTIONS.—The
provisions of this subsection shall also apply in the case of any distribution (not in complete liquidation) made by a qualified corporation before January 1, 1989, without regard to whether such corporation is completely liquidated." (7) Paragraph (8) of the section 633(d) of the Reform Act is amended by striking out "becomes an S corporation for a taxable year beginning before January 1, 1989' and inserting in lieu thereof "makes an election to be an S corporation under section 1362 of such Code before January 1, 1989, without regard to whether such corporation is completely liquidated". (8) Section 633 of the Reform Act is amended by redesignating the subsections following the first subsection (d) as subsections (e), (f), and (g), respectively. (9) Subsection (fK2) of section 633 of the Reform Act (as so redesignated) is amended by striking out "May 9, 1929" and inserting in lieu thereof "May 9, 1929 (or any direct or indirect subsidiary of such corporation)". (10) Paragraph (3) of section 633(f) of the Reform Act (as so redesignated) is amended by striking out "of such Code)" in the last sentence thereof and inserting in lieu thereof "of such Code". (11) Subclause (I) of section 633(fK4XA)(i) of the Reform Act (as Massachusetts. so redesignated) is amended by striking out "binding on the selling corporation to sell substantially all its assets" and inserting in lieu thereof "to sell substantially all of the assets of a selling corporation organized under the laws of Massachusetts on October 20, 1976,". (12) Subparagraph (A) of section 633(f)(5) of the Reform Act (as so redesignated) is amended to read as follows: "(A) a voting trust established not later than December 31, 1987, shall qualify as a trust permitted as a shareholder of an S corporation and shall be treated as only 1 shareholder if the holders of beneficial interests in such voting trust are—
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