95 STAT. 354
PUBLIC LAW 97-34—AUG. 13, 1981 ownership rules of subsection (c)(6)(C) shall apply in determining whether a person held more than 5 percent of a class of interest. "(4) EXCLUSIVE METHOD OF CLAIMING NONDISCRIMINATION.—
The election provided by paragraph (1) shall be the exclusive remedy for any person claiming discriminatory treatment with respect to this section and section 6039C." 26 USC 6039C.
26 USC 897.
(e) REPORTING REQUIRED FOR CERTAIN INDIRECT HOLDINGS.—Para-
graph (4)(C) of section 6039C(b) is amended to read as follows: "(C) INDIRECT HOLDINGS.—For purposes of determining whether an entity to which this subsection applies has a substantial investor in United States real property, the assets of any person shall include the person's pro rata share of the United States real property interest held by any corporation (whether domestic or foreign) if the person's pro rata share of the United States real property interests exceeded $50,000." (f) CERTAIN CONTRIBUTIONS TO CAPITAL.—Section 897 is amended by adding at the end thereof the following new subsection: "0") CERTAIN CONTRIBUTIONS TO CAPITAL.—Except to the extent otherwise provided in regulations, gain shall be recognized by a nonresident alien individual or foreign corporation on the transfer of a United States real property interest to a foreign corporation if the transfer is made as paid in surplus or as a contribution to capital, in the amount of the excess of— "(1) the fair market value of such property transferred, over "(2) the sum of— "(A) the adjusted basis of such property in the hands of the transferor, plus "(B) the amount of gain, if any, recojgnized to the transferor under any other provision at the time of the transfer." (g) PRE-ENACTMENT ACQUISITIONS.—Section 897 is amended by adding at the end thereof the following new subsections: "(k) FOREIGN CORPORATIONS ACQUIRED BEFORE ENACTMENT.—If—
"(1) a foreign corporation adopts, or has adopted, a plan of liquidation described in section 33403)(2)(A), and "(2) the 12-month period described in section 334(b)(2)(B) for the acquisition by purchase of the stock of the foreign corporation, began after December 31, 1979, and before November 26, 1980, then such foreign corporation may make an election to be treated, for the period following June 18, 1980, as a domestic corporation pursuant to section 897(i)(l). Notwithstanding an election under the preceding sentence, any selling shareholder of such corporation shall be considered to have sold the stock of a foreign corporation. "(1) SPECIAL RULE FOR CERTAIN UNITED STATES SHAREHOLDERS OP LIQUIDATING FOREIGN CORPORATIONS.—If a corporation adopts a plan
of complete liquidation and if, solely by reason of section 897(d), section 337(a) does not apply to sales or exchanges, or section 336 does not apply to distributions, of United States real property interests by such corporation, then, in the case of any shareholder who is a United States citizen or resident and who has held stock in such corporation continuously since June 18, 1980, for the first taxable year of such shareholder in which he receives a distribution in complete liquidation with respect to such stock— "(1) the amount realized by such shareholder on the distribution shall be increased by his proportionate share of the amount by which the tax imposed by tms subtitle on such corporation
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