102 STAT. 3490

PUBLIC LAW 100-647—NOV. 10,1988

26 USC 134 note.

26 USC 134 note.
26 USC 409.

Loans.

(2XA) Section 134(bXD of the 1986 Code is amended by insert-
ing "(other than personal use of a vehicle)" after "in-kind
benefit".

(B) The amendment made by subparagraph (A) shall apply to
taxable years beginning after December 31, 1986.

(3) Section 134(bX3XA) of the 1986 Code is amended by striking
out "under any provision of law or regulation described in
paragraph (1)".

(4) Section 1168(c) of the Reform Act is amended by striking
out "1986" and inserting in lieu thereof "1984".

(g) AMENDMENTS RELATED TO SECTION 1172 OP THE REFORM ACT.-—

(1) Section 1172(bXlXA) of the Reform Act is amended by
inserting "each place it appears" before the comma.

(2) Paragraphs (2) and (3) of section 409(n) of the 1986 Code
(relating to securities received in certain transactions) is
amended by inserting "or section 2057" after "section 1042"
each place it appears.

(3) Paragraph (1) of section 2057(b) of the 1986 Code (relating
to qualified sale) is amended by striking out "is".

(h) AMENDMENTS RELATED TO SECTION 1173 OP THE REFORM ACT.—
(1) Section 133 of the 1986 Code (relating to exclusion of
interest on securities acquisition loans) is amended by adding at
the end thereof the following new subsection:
"(e) PERIOD TO WHICH INTEREST EXCLUSION APPLIES.—
"(1) IN GENERAL.—In the case of—

"(A) an original securities acquisition loan, and
"(B) any securities acquisition loan (or series of such
loans) used to refinance the original securities acquisition
loan,

subsection (a) shall apply only to interest accruing during the
excludable period with respect to the original securities acquisi-
tion loan.

"(2) EXCLUDABLE PERIOD.—For purposes of this subsection, the
term 'excludable period' means, with respect to any original
securities acquisition loan—

"(A) IN GENERAL.—The 7-year period beginning on the
date of such loan.

"(B) LOANS DESCRIBED IN SUBSECTION (bXIXA).—If the

term of an original securities acquisition loan described in

subsection (bXIXA) is greater than 7 years, the term of such

loan. This subparagraph shall not apply to a loan described

t( in subsection (bX3XB).

"(3) ORIGINAL SECURITIES ACQUISITION LOAN.—For the pur-
poses of this subsection, the term 'original securities acquisition
loan' means a securities acquisition loan described in subpara-
graph (A) or (B) of subsection (bXD."

(2XA) Section 133(b) of the 1986 Code (defining securities
acquisition loan) is amended—

(i) by striking out "or are used to refinance such a loan,"
in paragraph (1XA),

(ii) by striking out ", except that this subparagraph shall
not apply to any loan the commitment period of which
exceeds 7 years" in paragraph (1XB), and

(iii) by adding at the end thereof the following new
paragraph:

"(5) TREATMENT OF REFINANCINGS.—The term 'securities ac-
quisition loan1 shall include any loan which—