102 STAT. 3536 PUBLIC LAW 100-647—NOV. 10, 1988

"(1) any amount deemed distributed to such shareholder
under subsection (b),

"(2) any actual distribution to such shareholder which under
section 996 is treated as out of accumulated DISC income, and
"(3) any gain which is treated as a dividend under subsection
(0,

shall be treated as derived from the conduct of an unrelated trade or
business (and the modifications of section 512(b) shall not apply).
The rules of the preceding sentence shall apply also for purposes of
determining any such shareholder's DISC-related deferred tax liabil-
ity under subsection (f)."

26 use 995 note. (B) The amendment made by subparagraph (A) shall

apply to taxable years beginning after December 81, 1987.

(7) TREATMENT OF CERTAIN AMOUNTS PREVIOUSLY TAXED UNDER

SECTION 1248.—

(A) IN GENERAL.—Subsection (e) of section 959 of the 1986
Code is amended by striking out "such person under" and
inserting in lieu thereof "such person (or, in any case to
which section 1248(e) applies, of the domestic corporation
referred to in section 1248(eX2)) under".

26 USC 959 note. (B) EFFECTIVE DATE.—The amendment made by subpara-

graph (A) shall apply in the case of transactions to which
section 1248(e) of the 1986 Code applies and which occur
after December 81,1986.

(8) TREATMENT OF SHARED FSC'S.—

(A) IN GENERAL.—Section 927 of the 1986 Code is amend-
ed by adding at the end thereof the following new subsec-
tion:
"(g) TREATMENT OF SHARED FSC's.—

"(1) IN GENERAL.—Except as provided in paragraph (2), each
separate account referred to in paragraph (3) maintained by a
shared FSC shall be treated as a separate corporation for
purposes of this subpart.

"(2) CERTAIN REQUIREMENTS APPLIED AT SHARED FSC LEVEL.—
Paragraph (1) shall not apply—
"(A) for purposes of—

"(i) subparagraphs (A), (B), (D), and (E) of section
922(aXD,

"(ii) paragraph (2) of section 922(a),
"(iii) subsections (b), (c), and (e) of section 924, and
"(iv) subsection (f) of this section, and
"(B) for such other purposes as the Secretary may by
regulations prescribed.

"(3) SHARED FSC.—For purposes of this subsection, the term
'shared FSC' means any corporation if—

"(A) such corporation maintains a separate account for
transactions with each shareholder (and persons related to
such shareholder),

"(B) distributions to each shareholder are based on the
amounts in the separate account maintained with respect
to such shareholder, and

"(C) such corporation meets such other requirements as
the Secretary may by regulations prescribe."

26 USC 927 note. (B) The amendment made by subparagraph (A) shall apply as

if included in the provision of the Tax Reform Act of 1984 to
which it relates.