PUBLIC LAW 105-34—AUG. 5, 1997 111 STAT. 921 (c) SECTION 355. —Paragraph (3) of section 355(a) is amended by adding at the end the following new subparagraph: "(D) NONQUALIFIED PREFERRED STOCK.— Nonqualified preferred stock (as defined in section 351(g)(2)) received in a distribution with respect to stock other thsm nonqualified preferred stock (as so defined) shall not be treated as stock or securities.". (d) SECTION 356.— Section 356 is amended by redesignating subsections (e) and (f) as subsections (f) and (g), respectively, and by inserting after subsection (d) the following new subsection: "(e) NONQUALIFIED PREFERRED STOCK TREATED AS OTHER PROP- ERTY.— For purposes of this section— "(1) IN GENERAL.— Except as provided in paragraph (2), the term 'other property' includes nonqualified preferred stock (as defined in section 351(g)(2)). "(2) EXCEPTION. —The term 'other property does not include nonqualified preferred stock (as so defined) to the extent that, under section 354 or 355, such preferred stock would be permitted to be received without the recognition of gain.". (e) CONFORMING AMENDMENTS.— (1) Subparagraph (B) of section 354(a)(2) and subparagraph (C) of section 355(a)(3)(C) are each amended by inserting "(including nonqualified preferred stock, as defined in section 351(g)(2))'^after "stock". (2) Subparagraph (A) of section 354(a)(3) and subparagraph (A) of section 355(a)(4) are each amended by inserting "nonqualified preferred stock and" after "including". (3) Section 1036 is amended by redesignating subsection (b) as subsection (c) and by inserting after subsection (a) the following new subsection: "(b) NONQUALIFIED PREFERRED STOCK NOT TREATED AS STOCK.— For purposes of this section, nonqualified preferred stock (as defined in section 351(g)(2)) shall be treated as property other than stock.". (f) EFFECTIVE DATE. — 26 USC 351 note. (1) IN GENERAL. —The amendments made by this section shall apply to transactions after June 8, 1997. (2) TRANSITION RITT.E.—The amendments made by this section shall not apply to any transaction after June 8, 1997, if such transaction is— (A) made pursuant to a written agreement which was binding on such date and at all times thereafter, (B) described in a ruling request submitted to the Internal Revenue Service on or before such date, or (C) described on or before such date in a public announcement or in a filing with the Securities and Exchsmge Commission required solely by reason of the transaction. SEC. 1015. MODIFICATION OF HOLDING PERIOD APPLICABLE TO DIVI- DENDS RECEIVED DEDUCTION. (a) IN GENERAL. —Subparagraph (A) of section 246(c)(1) is amended to read as follows: "(A) which is held by the taxpayer for 45 days or less during the 90-day period beginning on the date which is 45 days before the date on which such share becomes ex-dividend with respect to such dividend, or".
�
