PUBLIC LAW 100-647—NOV. 10, 1988	102 STAT. 3639
"(II) it is established to the satisfaction of the
Secretary that such consideration originally be-
longed to such member and was never received or
acquired (directly or indirectly) by such member
from the transferor for less than full and adequate
consideration in money or money's worth,
paragraph (1) shall not apply to the applicable fraction
of the portion of the enterprise which would (but for
this subparagraph) have been included in the gross
estate of the transferor by reason of this subsection
(determined without regard to any reduction under
paragraph (5) for the value of the retained interest),
"(ii) applicable fraction.—For purposes of clause
(i), the applicable fraction is a fraction—
"(I) the numerator of which is the amount of the
consideration referred to in clause (i), and
"(II) the denominator of which is the value of the
portion referred to in clause (i) immediately after
the transfer described in paragraph (1).
"(iii) section 2043 not to apply.—The provisions of
this subparagraph shall be in lieu of any adjustment
under section 2043."
(2)  Paragraph (5) of section 2036(c) of the  1986 Code is
amended to read as follows:
"(5) adjustments.—Appropriate adjustments shall be made
in the amount included in the gross estate by reason of this
subsection for the value of the retained interest, extraordinary
distributions, and changes in the capital structure of the enter-
prise after the transfer described in paragraph (1).
(h) effective date.—	26 use 2036
(1)	in general.—Except as provided in this subsection, any   note.
amendment made by this section shall take effect as if included
in the provisions of the Revenue Act of 1987 to which such
amendment relates.
 (2)	subsection (a) .—The amendments made by subsection (a)
shall apply in cases where the transfer referred to in section
2036(cXlXB) of the 1986 Code is on or after June 21, 1988.
 (3)	subsection (f).—If an amount is included in the gross
estate of a decedent under section 2036 of the 1986 Code other
than solely by reason of section 2036(c) of the 1986 Code, the
amendments made by subsection (f) shall apply to such amount
only with respect to property transferred after the date of the
enactment of this Act.
 (4)	correction period—If section 2036(c)(D of the 1986 Code
would (but for this paragraph) apply to any interest arising
from a transaction entered into during the period beginning
after December 17, 1987, and ending before January 1, 1990,
such section shall not apply to such interest if—

 (A)	during such period, such actions are taken as are
necessary to have such section 2036(cXD not apply to such
transaction (and any such interest), or
 (B)	the original transferor and his spouse on January 1,
1990   (or,   if  earlier,   the   date   of  the   original   trans-
feror's death), does not hold any interest in the enterprise
involved.