102 STAT. 3720 PUBLIC LAW 100-647—NOV. 10, 1988

(3) TRANSITIONAL RULES.—

(A) The requirements of subclause (IV) of section
988(cXIXEXiii) of the 1986 Code (as added by subsection (b))
shall not apply to periods before the date of the enactment
of this Act.

(B) In the case of any partner in an existing partnership,
the 20-percent ownership requirements of subclause (I) of
such section 988(cXlXEXiii) shall be treated as met during
any period during which such partner does not own a
percentage interest in the capital or profits of such partner-
ship greater than 33 Vs percent (or, if lower, the lowest such
percentage interest of such partner during any prior period
after October 21,1988, during which such partnership is in
existence). For purposes of the preceding sentence, the term
"existing partnership" means any partnership if—

(i) such partnership was in existence on October 21,
1988, and principally engaged on such date in buying
and selling options, futures, or forwards with respect to
commodities, or

(ii) a registration statement was filed with respect to
such partnership with the Securities and Exchange
Commission on or before such date and such registra-
tion statement indicated that the principal activity of
such partnership will consist of buying and selling
instruments referred to in clause (i).

SEC. 6131. TREATMENT OF INSURANCE COMPANIES UNDER CHAIN DEFI-
CIT RULE.

(a) IN GENERAL.—Subparagraph (B) of section 952(cXD of the 1986

Code is amended by adding at the end thereof the following new

clause:

"(vii) SPECIAL RULES FOR INSURANCE INCOME.—

"(D IN GENERAL.—An election may be made under this
clause to have section 953(a) applied for purposes of this
title without regard to the same country exception under
paragraph (1XA) thereof. Such election, once made, may be
revoked only with the consent of the Secretary.

"(ID SPECIAL RULES FOR AFFILIATED GROUPS.—In the case
of an affiliated group of corporations (within the meaning of
section 1504 but without regard to section 1504(bX3) and by
substituting 'more than 50 percent' for 'at least 80 percent'
each place it appears), no election may be made under
subclause (D for any controlled foreign corporation unless
such election is made for all other controlled foreign cor-
porations who are members of such group and who were
created or organized under the laws of the same country as
such controlled foreign corporation. For purposes of clause
(v), in determining whether any controlled corporation de-
scribed in the preceding sentence is a qualified insurance
company, all such corporations shall be treated as 1 cor-
poration."
26 USC 952 note. (b) EFFECTIVE DATE.—The amendment made by this section shall

take effect as if included in the amendments made by section 1221(f)

of the Reform Act.