Sec. 3647. C corporation election to become, or transfer assets to, a RIC or REIT

389 words·~2 min read·/bill/113/hr/1/ih/section-3647

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Part IV of subchapter O of chapter 1, as amended by the preceding provisions of this Act, is amended by redesignating section 1062 as section 1063 and by inserting after section 1061 the following new section: If a C corporation elects to become a regulated investment company or a real estate investment trust for a taxable year, such corporation shall recognize gain or loss as if all its assets were sold by such corporation at their fair market value immediately before the close of the last taxable year before such corporation becomes a regulated investment company or real estate investment trust (as the case may be).

In the case of a C corporation which transfers to a regulated investment company or a real estate investment trust one or more assets the basis of which is determined (in whole or in part) by reference to the basis of such asset or assets in the hands of the C corporation, such corporation shall recognize gain or loss as if such assets were sold by such corporation at their fair market value as of the end of the day before the day of the transfer. Subsections

(a)and

(b)shall not apply if their application would result in the recognition of a net loss. For purposes of the preceding sentence, the term net loss means the excess of aggregate losses over aggregate gains (including items of income) without regard to character. If any asset is treated as sold under subsection

(a)or (b), the basis of such asset immediately after such deemed sale shall be equal to the fair market value of such asset as determined under such subsection. For purposes of this section, the term C corporation does not include a regulated investment company or a real estate investment trust. . The table of sections for part IV of subchapter O of chapter 1 is amended by redesignating the item relating to section 1062 as an item relating to section 1063 and by inserting after the item relating to section 1061 the following new item: Sec. 1062. Recognition of gain or loss upon C corporation election to become, or transfer assets to, a regulated investment company or a real estate investment trust. . The amendment made by this section shall apply to elections and transfers on or after February 26, 2014.