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TITLE 26--INTERNAL REVENUE CODE the real estate investment trust, such trust does not meet the requirement of section 856(a)(4) of the Inter- nal Revenue Code of 1954 (as in effect before the amendment of such section by this Act) (section 856(a)(4) of this title] for any taxable year beginning on or before the date of the enactment of this Act (Oct. 4, 1976], such trust may elect, within 60 days after such determination in the manner provided in regulations prescribed by the Secretary of the Trea- sury or his delegate, to have the provisions of section 1603 (other than paragraphs (1), (2), (3), and (4) of section 1603(c)) apply with respect to such taxable year. Where the provisions of section 1603 apply to a real estate investment trust with respect to any tax- able year beginning on or before the date of the enact- ment of this Act [Oct. 4, 1976]- "(A) credit or refund of any overpayment of tax which results from the application of section 1603 to such taxable year shall be made as if on the date of the determination (as defined in section 859(c) of the Internal Revenue Code of 1954) 2 years re- mained before the expiration of the period of limita- tion prescribed by section 6511 of such Code (section 6511 of this title] on the filing of claim for refund for the taxable year to which the overpayment re- lates, "(B) the running of the statute of limitations pro- vided in section 6501 of such Code [section 6501 of this title] on the making of assessments, and the bringing of distraint or a proceeding in court for col- lection, in respect of any deficiency (as defined in section 6211 of such Code [section 6211 of this title]) established by such a determination, and all interest, additions to tax, additional amounts, or assessable penalties in respect thereof, shall be suspended for a period of 2 years after the date of such determina- tion, and "(C) the collection of any deficiency (as defined in section 6211 of such Code) established by such deter- mination and all interest, additions to tax, additional amounts, and assessable penalties in respect thereof shall, except in cases of jeopardy, be stayed until the expiration of 60 days after the date of such determi- nation. No distraint or proceeding in court shall be begun for the collection of an amount the collection of which is stayed under subparagraph (C) during the period for which the collection of such amount is stayed. "(3) Section 856(g)(3) of the Internal Revenue Code of 1954 [subsec. (g)(3) of this section], as added by sec- tion 1604 of this Act, shall not apply with respect to a termination of an election, filed by a taxpayer under section 856(c)(1) of such Code [subsec. (c)(1) of this section] on or before the date of the enactment of this Act [Oct. 4, 1976], unless the provisions of part II of subchapter M of chapter 1 of subtitle A of such Code [this title] apply to such taxpayer for a taxable year ending after the date of the enactment of this Act [Oct. 4, 1976] for which such election is in effect." EFFECTIVE DATr OF 1975 AMENDMENT Section 6(e) of Pub. L. 93-625 provided that: "The amendments made by this section [to this section and section 857 of this title] apply to foreclosure property acquired after December 31, 1973. Notwithstanding the provisions of section 856(e)(5) of the Internal Rev- enue Code of 1954 [subsec. (e)(5) of this section] (as added by subsection (a) of this section) any taxpayer required to make an election with respect to foreclo- sure property sooner than 90 days after the date of en- actment of this Act [Jan. 3, 1975], may make that elec- tion at any time before the 91st day after the date of enactment of this Act [Jan. 3, 1975)." EFFECTIVE DATE OF 1964 AMENDMENT Amendment by section 4 of Pub. L. 88-554 effective Aug. 31, 1964, except that for purposes of sections 302 and 304 of this title, such amendments shall not apply to distributions in payment for stock acquisitions or redemptions, if such acquisitions or redemptions oc- curred before Aug. 31, 1964, see section 4(c) of Pub. L. 88-554 set out as an Effective Date of 1964 Amend. ment note under section 318 of this title. Amendment by Pub. L. 88-272 applicable to taxable years beginning after Dec. 31, 1963, see section 225(l) of Pub. L. 88-272 set out as an Effective Date of 1964 Amendment note under section 316 of this title. EFFECTIVE DATE Section 10(k) of Pub, L. 86-779 provided that: "The amendments made by this section [adding sections 856 to 858 and amending sections 11(d)(3), 34(c), 116(b), 243(c), 318(b), 443(d), 852(a), (b)(3)(), 855(c) and 1504(b)(6) of this title] shall apply with respect to tax- able years of real estate investment trusts beginning after December 31, 1960." TRUST NOT DISQUALIFIEiD IN CERTAIN CASES WHERE INCOME TESTS NOT MET Section 1608(b) of Pub. L. 94-455 provided that: "The amendment made by section 1602 [enacting subsec. (c)(7) of this section and section 857(b)(2)(E), (5) of this title] sha! apply to taxable years of real estate investment trusts beginning after the date of the enactment of this Act [Oct. 4, 1976]. In addition, the amendments made by section 1602 shall apply to a taxable year of a real estate investment trust begin- ning before the date of the enactment of this Act [Oct. 4, 1976] if, as the result of a determination (as defined in section 859(c) of the Internal Revenue Code of 1954) [section 859(c) of this title] with respect to such trust occurring after the date of the enactment of this Act [Oct. 4, 19701, such trust for such taxable years does not meet the requirements of section 856(c)(2) or section 856(c)(3), or of both such sections, of such Code [subsecs. (c)(2) or (c)(3) of this section] as in effect for such taxable year. In any case, the amendment made by section 1602(a) requiring a sched- ule to be attached to the income tax return of certain real estate investment trusts shall apply only to tax- able years of such trusts beginning after the date of the enactment of this Act [Oct. 4, 1976]. If the amend- ments made by section 1602 apply to a taxable year ending on or before the date of enactment of this Act [Oct. 4, 1976], the reference to paragraph (2)(B) in section 857(b)(5) of such Code, as amended (section 857(b)(5) of this title], shall be considered to be a ref- erence to paragraph (2)(C) of section 857(b) of such Code, as in effect immediately before the enactment of this Act [Oct. 4, 1976]." CROSS REFERENCES Liquidations before Jan. 1, 1966, see section 225(h) of Pub. L. 88-272, set out as a Liquidations Before Jan- uary 1, 1966 note under section 333 of this title. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 318, 857, 1212 of this title. SECTION REFERRED TO IN D.C. CODE This section is referred to in section 47-1557b of the District of Columbia Code. § 857. Taxation of real estate investment trusts and their beneficiaries (a) Requirements applicable to real estate investment trusts The provisions of this part (other than sub- section (d) of this section and subsection (g) of section 856) shall not apply to a real estate in- vestment trust for a taxable year unless- (1) the deduction for dividends paid during the taxable year (as defined in section 561, but determined without regard to capital gains dividends equals or exceeds- (A) the sum of- (i) 95 percent (90 percent for taxable years beginning before January 1, 1980) of Page 548 § 857