118 STAT. 1473 PUBLIC LAW 108–357—OCT. 22, 2004 ‘‘(c) CROSS REFERENCE.— ‘‘For treatment of income from load loss transactions of organiza tions described in subsection (a)(2)(C), see section 501(c)(12)(H).’’. (e) EFFECTIVE DATE.—The amendments made by this section shall apply to taxable years beginning after the date of the enact ment of this Act. SEC. 320. EXCLUSION FOR PAYMENTS TO INDIVIDUALS UNDER NATIONAL HEALTH SERVICE CORPS LOAN REPAYMENT PROGRAM AND CERTAIN STATE LOAN REPAYMENT PRO GRAMS. (a) IN GENERAL.—Section 108(f) (relating to student loans) is amended by adding at the end the following new paragraph: ‘‘(4) PAYMENTS UNDER NATIONAL HEALTH SERVICE CORPS LOAN REPAYMENT PROGRAM AND CERTAIN STATE LOAN REPAY MENT PROGRAMS.—In the case of an individual, gross income shall not include any amount received under section 338B(g) of the Public Health Service Act or under a State program described in section 338I of such Act.’’. (b) TREATMENT FOR PURPOSES OF EMPLOYMENT TAXES.—Each of the following provisions is amended by inserting ‘‘108(f)(4),’’ after ‘‘74(c),’’: (1) Section 3121(a)(20). (2) Section 3231(e)(5). (3) Section 3306(b)(16). (4) Section 3401(a)(19). (5) Section 209(a)(17) of the Social Security Act. (c) EFFECTIVE DATE.—The amendments made by this section shall apply to amounts received by an individual in taxable years beginning after December 31, 2003. SEC. 321. MODIFICATION OF SAFE HARBOR RULES FOR TIMBER REITs. (a) EXPANSION OF PROHIBITED TRANSACTION SAFE HARBOR.— Section 857(b)(6) (relating to income from prohibited transactions) is amended by redesignating subparagraphs (D) and (E) as subpara graphs (E) and (F), respectively, and by inserting after subpara graph (C) the following new subparagraph: ‘‘(D) CERTAIN SALES NOT TO CONSTITUTE PROHIBITED TRANSACTIONS.—For purposes of this part, the term ‘prohib ited transaction’ does not include a sale of property which is a real estate asset (as defined in section 856(c)(5)(B)) if— ‘‘(i) the trust held the property for not less than 4 years in connection with the trade or business of producing timber, ‘‘(ii) the aggregate expenditures made by the trust, or a partner of the trust, during the 4 year period preceding the date of sale which— ‘‘(I) are includible in the basis of the property (other than timberland acquisition expenditures), and ‘‘(II) are directly related to operation of the property for the production of timber or for the preservation of the property for use as timberland, do not exceed 30 percent of the net selling price of the property, 26 USC 108 note. 42 USC 409. 26 USC 501 note.
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