PUBLIC LAW 100-647—NOV. 10, 1988 102 STAT. 3385

options (determined without regard to this subsection) are exer-
cisable for the 1st time by any individual during any calendar
year (under all plans of the individual's employer corporation
and its parent and subsidiary corporations) exceeds $100,000,
such options shall be treated as options which are not incentive
stock options.

"(2) ORDERING RULE.—Paragraph (1) shall be applied by
taking options into account in the order in which they were
granted.

"(3) DETERMINATION OF FAIR MARKET VALUE.—For purposes of
paragraph (1), the fair market value of any stock shall be
determined as of the time the option with respect to such stock
is granted."

(B) Subsection (b) of section 422A of the 1986 Code is amended
by adding "and" at the end of paragraph (5), by striking out
"; and" at the end of paragraph (6) and inserting in lieu thereof a
period, and by striking out paragraph (7).

(C) Paragraph (1) of section 422A(c) of the 1986 Code is
amended by striking out "paragraph (7) of subsection (b)" and
inserting in lieu thereof "subsection (d)".

SEC 1004. AMENDMENTS RELATED TO TITLE IV OF THE REFORM ACT. Agriculture and

(a) AMENDMENTS RELATED TO SECTION 405 OF THE REFORM ACT.—

(1) Paragraph (1) of section 108(a) of the 1986 Code is amended
by striking out "or" at the end of subparagraph (A), by striking
out the period at the end of subparagraph (B) and inserting in
lieu thereof ", or" and by adding at the end thereof the follow-
ing new subparagraph:

"(C) the indebtedness discharged is qualified farm indebt-
edness."

(2) Paragraph (2) of section 108(a) of the 1986 Code is amended
to read as follows:

"(2) COORDINATION OF EXCLUSIONS.—

"(A) TITLE 11 EXCLUSION TAKES PRECEDENCE.—Subpara-
graphs (B) and (C) of paragraph (1) shall not apply to a
discharge which occurs in a title 11 case.

"(B) INSOLVENCY EXCLUSION TAKES PRECEDENCE OVER
QUALIFIED FARM EXCLUSION.—Subparagraph (C) of para-
graph (1) shall not apply to a discharge to the extent the
taxpayer is insolvent."

(3) Subsection (b) of section 108 of the 1986 Code is amended—

(A) by striking out "subparagraph (A) or (B)" in para-
graph (1) and inserting in lieu thereof "subparagraph (A),
(B), or (C)", and

(B) by striking out "IN TITLE 11 CASE OR INSOLVENCY" in
the subsection heading.

(4) Subsection (g) of section 108 of the 1986 Code is amended to
read as follows:

"(g) SPECIAL RULES FOR DISCHARGE OF QUALIFIED FARM INDEBTED-
NESS.—

"(1) DISCHARGE MUST BE BY QUALIFIED PERSON.—

"(A) IN GENERAL.—Subparagraph (C) of subsection (a)(l)

shall apply only if the discharge is by a qualified person.

"(B) QUALIFIED pERSON.—For purposes of subparagraph

(A), the term 'qualified person' has the meaning given to

such term by section 46(c)(8)(D)(iv); except that such term