123STA T . 3 4 2 PUBLIC LA W 111 –5—FE B.1 7, 2 0 0 9PARTV—QU A LIF I EDSM ALL B USI N ESS ST OCKSEC.124 1.S P EC IALRU LES APPLICA B LE TOQ UALI F IE D S M ALL BUSI -N ESS STOC K FOR 2 0 0 9 AND 2010. (a)INGE NE RAL.—Section120 2(a) i s a m en d ed by addin g at t h e end the f o l lo w ing new p a r agraph
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‘( 3 )S P E CI ALR U LE SFO R 20 0 9 AN D 20 1 0.—In the case of qu alified small business stoc k acquired after the date of the enactment of this paragraph and before J anuary 1 , 2011— ‘‘( A ) paragraph (1) shall be applied by substituting ‘ 75 percent ’ for ‘50 percent’, and ‘‘( B ) paragraph (2) shall not apply.’’. (b) E FFEC T I V E D ATE.— T he amendment made by this section shall apply to stock acquired after the date of the enactment of this Act. PART VI—S CORPORATIONS SEC. 12 5 1. TEMPORAR Y REDUCTION IN RECO G NITION PERIOD FOR BUILT-IN GAINS TA X . (a) IN GENERAL.— P aragraph (7) of section 137 4 (d) (relating to definitions and special rules) is amended to read as follows: ‘‘(7) R ECO G NITION PERIOD.— ‘‘(A) IN GENERAL.—The term ‘recognition period’ means the 10 - year period beginning with the 1st day of the 1st ta x able year for which the corporation was an S corpora- tion. ‘‘(B) SPECIAL RULE FOR 2009 AND 2010.—In the case of any taxable year beginning in 200 9 or 2010, no tax shall be imposed on the net recogni z ed built-in gain of an S corporation if the 7th taxable year in the recognition period preceded such taxable year. The preceding sentence shall be applied separately with respect to any asset to which paragraph ( 8 ) applies. ‘‘( C ) SPECIAL RULE FOR DISTRI B UTIONS TO S H ARE- HOLDERS.— F or purposes of applying this section to any amount includible in income by reason of distributions to shareholders pursuant to section 593(e)— ‘‘(i) subparagraph (A) shall be applied without regard to the phrase ‘10-year’, and ‘‘(ii) subparagraph (B) shall not apply.’’. (b) EFFECTIVE DATE.—The amendment made by this section shall apply to taxable years beginning after December 31, 2008. PART VII—RULES RELATIN G TOO W NERS H IP CHANGES SEC. 12 6 1. CLARIFICATION OF REGULATIONS RELATED TO LIMITA- TIONS ON CERTAIN BUILT-IN LOSSES FOLLO W ING AN OWNERS H IP CHANGE. (a) FINDINGS.—Congress finds as follows: (1) The delegation of authority to the Secretary of the Treasury under section 382(m) of the Internal Re v enue Code of 198 6 does not authorize the Secretary to provide exemptions or special rules that are restricted to particular industries or classes of taxpayers. 26USC38 2 note. 26 USC 1 3 74 note. Ap p licab ilit y . Applicability. 26 USC 1374. 26 USC 12 0 2 note.
