PUBLIC LAW 100-647—NOV. 10, 1988

102 STAT. 3427

purposes of determining whether any interest in a REMIC
qualifies under the preceding sentence, any interest in another
REMIC held by such REMIC shall be treated as a qualifying
real property loan under principles similar to the principles of
the preceding sentence, except that if such REMIC's are part of
a tiered structure, they shall be treated as 1 REMIC for pur-
poses of this paragraph.''

(26) Section 860E of the 1986 Code is amended by adding at
the end thereof the following new subsection:

"(f) TREATBCENT OF VARIABLE INSURANCE CONTRACTS.—Except as
provided in regulations, with respect to any variable contract (as
defined in section 817), there shall be no adjustment in the reserve
to the extent of any excess inclusion."

(27) Subsection (a) of section 860E of the 1986 Code is amended
by adding at the end thereof the following new paragraph:

"(5) COORDINATION WITH SECTION 172.—Any excess inclusion
for any taxable year shall not be taken into account—

"(A) in determining under section 172 the amount of any
net operating loss for such taxable year, and

"(B) in determining taxable income for such taxable year
for purposes of the 2nd sentence of section 172(bX2)."
(u) AMENDMENTS RELATED TO SECTION 672 OF THE REFORM ACT.—

(1) Subparagraph (B) of section 163(eX2) of the 1986 Code is
amended by striking out "paragraph (6)" and inserting in lieu
thereof "paragraph (7)".

(2) Subparagraph (B) of section 1278(aX4) of the 1986 Code is
amended by striking out "section 1272(aX6)" and inserting in
lieu thereof "section 1272(aX7)".

(3) Section 1288(a) of the 1986 Code is amended by striking out
"paragraph (6)" each place it appears and inserting in lieu
thereof "paragraph (7)".

(4) Sections 1271(aX2XAXii) and 1275(aX4XBXiiXD of the 1986
Code are each amended by striking out "subsection (aX6)" and
inserting in lieu thereof "subsection (aX7)".

(v) AMENDMENT RELATED TO SECTION 674 OF THE REFORM ACT.—
Subparagraph (A) of section 6049(dX7) of the 1986 Code is amended
by inserting "(and such amounts shall be treated as paid when
includible in gross income under section 860B(b))" before the period
at the end thereof.

(w) AMENDMENTS RELATED TO SECTION 675 OF THE REFORM ACT.-—

(1) Subsection (a) of section 675 of the Reform Act is amended
to read as follows:

"(a) GENERAL RULE.—Except as otherwise provided in this section, Effective date.
the amendments made by this subtitle shall take effect on Janu-
ary 1, 1987."

(2) Section 675 of the Reform Act is amended by adding at the
end thereof the following new subsection:

"(d) STUDY.—The Secretary of the Treasury or his delegate shall
conduct a study of the operation of the amendments made by this
part and their competitive impact on savings and loan institutions
and similar financial institutions. Not later than January 1, 1990,
the Secretary shall submit a report of such study to the Committee
on Ways and Means of the House of Representatives and the
Committee on Finance of the Senate (together with such rec-
ommendations as he may deem advisable)."

26 USC 860A
note.

Banks and
banking.
26 USC 860A
note.
Reports.