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107 STAT. 426 PUBLIC LAW 103-66—AUG. 10, 1993 "(A) are held as a psirt of the reasonably required working capital needs of a qualified trade or business of the corporation, or "(B) are held for investment and are reasonably expected to be used within 2 ye&ra to finance research and experimentation in a qualified trade or business or increases in working capital needs of a qualified trade or business, shall be treated as used in the active conduct of a qualified trade or business. For periods after the corporation has been in existence for at least 2 years, in no event may more than 50 percent of the assets of the corporation qualify as used in the active conduct of a qualified trade or business by reason of this p£iragraph. **(7) MAXIMUM REAL ESTATE HOLDINGS.—A corporation shall not be treated as meeting the requirements of paragraph (1) for any period during which more than 10 percent of the total value of its assets consists of real property which is not used in the active conduct of a qualified trade or business. For purposes of the preceding sentence, the ownership of, dealing m, or renting of real property shall not be treated as the active conduct of a qualified trade or business. **(8) COMPUTER SOFTWARE ROYALTIES.—For purposes of paragraph (1), rights to computer software which produces active business computer software royalties (within the mean- ing of section 543(dXl)) shall be treated as an asset used in the active conduct of a trade or business. "(f) STOCK ACQUIRED ON CONVERSION OF OTHER STOCK.—If any stock in a corporation is acquired solely through the conversion of other stock in such corporation which is qualified small business stock in the hands of the taxpayer— "(1) the stock so acquired shall be treated as qualified small business stock in the hands of the taxpayer, and "(2) the stock so acquired shall be treated as having been held during the period during which the converted stock was held, "(g) TREATMENT OF PASS-THRU ENTITIES.— "(1) IN GENERAL.—If any amount included in gross income by reason of holding an interest in a pass-thru entity meets the requirements of paragraph (2)— "(A) such amount shall be treated as gain described in subsection (a), and "(B) for purposes of applying subsection (b), such amount shall be treated as gain from a disposition of stock in the corporation issuing the stock disposed of by the pass-thru entity and the taxpayer's proportionate share of the adjusted basis of the pass-thru entity in such stock shall be taken into account. "(2) REQUIREMENTS.—^An amount meets the requirements of this paragraph if— "(A) such amoimt is attributable to gain on the sale or exchange by the pass-thru entity of stock which is quali- fied small business stock in the hands of such entity (deter- mined by treating such entity as an individual) and which was held, by such entity for more than 5 years, and "(B) such amount is includible in the gross income of the taxpayer by reason of the holding of an interest