102 STAT. 3606 PUBLIC LAW 100-647—NOV. 10, 1988

from the amendments made by this section if such
distribution is with respect to stock not held by the
distributee (determined without regard to clause (i)) on
the designated date directly or indirectly through a
corporation which goes out of existence in the trans-
action.

"(iii) DESIGNATED DATE.—For purposes of this
subparagraph, the term 'designated date' means the
later of—

"(I) December 15,1987, or

"(II) the date on which the acquisition meeting
the requirements of subparagraph (A) occurred."
(4) Subparagraph (B) of section 10223(dX2) of the Revenue Act
26 use 304 note. of 1987 is amended—

(A) by striking out "before January 1, 1993" and inserting
in lieu thereof "on or before March 31,1988", and

(B) by striking out "before January 1,1989,".

(1) AMENDMENT RELATED TO SECTION 10224 OF THE ACT.—Sections
1201(a) and 1561(a) of the 1986 Code, and section 904(b)(3)(D)(ii) of the
1986 Code (as amended by section 106(bX2) of this Act), are each
amended by striking out "section ll(b)" and inserting in lieu thereof
"section ll(b)(l)".
(m) AMENDMENTS RELATED TO SECTION 10226 OF THE ACT.—

(1)(A) Subsection (a) of section 384 of the 1986 Code is
amended to read as follows:
"(a) GENERAL RULE.—If—

"(1)(A) a corporation acquires directly (or through 1 or more
other corporations) control of another corporation, or

"(B) the assets of a corporation are acquired by another
corporation in a reorganization described in subparagraph (A),
(C), or (D) of section 368(a)(l), and

"(2) either of such corporations is a gain corporation,
income for any recognition period taxable year (to the extent attrib-
utable to recognized built-in gains) shall not be offset by any
preacquisition loss (other than a preacquisition loss of the gain
corporation)."

(B) Subsection (c) of section 384 of the 1986 Code is amended
by redesignating paragraph (4) as paragraph (8) and by insert-
ing after paragraph (3) the following new paragraphs:

(4) GAIN CORPORATION.—The term 'gain corporation' means
any corporation with a net unrealized built-in gain.

'(5) CONTROL.—The term 'control' means ownership of stock
in a corporation which meets the requirements of section
1504(aX2).

"(6) TREATMENT OF MEMBERS OF SAME GROUP.—Except as pro-
vided in regulations and except for purposes of subsection (b), all
corporations which are members of the same affiliated group

immediately before the acquisition date shall be treated as
corporation. To the extent provided in regulations, section 1504
shall be applied without regard to subsection (b) thereof for
purposes of the preceding sentence.

"(7) TREATMENT OF PREDECESSORS AND SUCCESSORS.—Any ref-
erence in this section to a corporation shall include a reference
to any predecessor or successor thereof."

(C) Paragraph (2) of section 384(c) of the 1986 Code is amended
to read as follows:

"(2) ACQUISITION DATE.—The term 'acquisition date' means