102 STAT. 3418	PUBLIC LAW 100-647—NOV. 10, 1988
mination of such amount depends in whole or in part on the
income or profits of any person except that—
"(A) any amount so received or accrued shall not be
excluded from the term 'interest' solely by reason of being
based on a fixed percentage or percentages of receipts or
sales, and
"(B) where a real estate investment trust receives any
amount which would be excluded from the term 'interest'
solely because the debtor of the real estate investment trust
receives or accrues any amount the determination of which
depends in whole or in part on the income or profits of any
person, only a proportionate part (determined pursuant to
regulations prescribed by the Secretary) of the amount
received or accrued by the real estate investment trust from
the debtor will be excluded from the term 'interest'.
"(2) special rule.—If—
"(A) a real estate investment trust receives or accrues
with respect to an obligation secured by a mortgage on real
property or an interest in real property amounts from a
debtor which derives substantially all of its gross income
with respect to such property (not taking into account any
gain on any disposition) from the leasing of substantially all
of its interests in such property to tenants, and
"(B) a portion of the amount which such debtor receives
or accrues, directly or indirectly, from tenants consists of
qualified rents (as defined in subsection (dX6XB)),
then the amounts which the trust receives or accrues from such
debtor shall not be excluded from the term 'interest' by reason
of being based on the income or profits of such debtor to the
extent the amounts so received are attributable to qualified
rents received or accrued by such debtor "
(r) amendment related to section 664 of the reform act.—
Clause (i) of section 857(eX2XB) of the 1986 Code is amended by
striking out "as original issue discount on instruments" and insert-
ing "with respect to instruments"
(s) amendments related to section 668 of the reform act.—
(1)	Paragraph (2) of section 4981(e) of the 1986 Code is
amended to read as follows:
"(2) capital gain net income.—
"(A) in general.—The term 'capital gain net income^7 has
the meaning given such term by section 1222(9) (determined
by treating the calendar year as the trust's taxable year).
"(B) reduction for net ordinary loss.-—The amount
determined under subparagraph (A) shall be reduced by the
amount of the trust's net ordinary loss for the taxable year.
"(C) net ordinary loss.—For purposes of this paragraph,
the net ordinary loss for the calendar year is the amount
which would be net operating loss of the trust for the
calendar year if the amount of such loss were determined in
the same manner as ordinary income is determined under
paragraph (1)."
 (2)	Subparagraph (C) of section 857(bX3) of the 1986 Code is
amended by striking out "real estate investment trust taxable
income" in the last sentence and inserting in lieu thereof "the
taxable income of the real estate investment trust".
 (3)	Subparagraph (A) of section 4981(cXD of the 1986 Code is
amended by striking out "such calendar year" and inserting in