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PUBLIC LAW 103-66—AUG. 10, 1993 107 STAT. 445 SEC. 13149. TREATMENT OF PENSION FUND INVESTMENTS IN REAL ESTATE INVESTMENT TRUSTS. (a) GENERAL RULE.—Subsection (h) of section 856 (relating 26 use 856. to closely held determinations) is amended by adding at the end thereof the following new paragraph: "(3) TREATMENT OF TRUSTS DESCRIBED IN SECTION 40i(a).— "(A) LOOK-THRU TREATMENT.— "(i) IN GENERAL.—Except as provided in clause (ii), in determining whether the stock ownership requirement of section 542(a)(2) is met for purposes of paragraph (IXA), any stock held by a qualified trust shall be treated as held directly by its beneficiaries in proportion to their actuarial interests in such trust and shall not be treated as held by such trust. "(ii) CERTAIN RELATED TRUSTS NOT ELIGIBLE.— Clause (i) shall not apply to any qualified trust if one or more disqualified persons (as defined in section 4975(e)(2), without regard to subparagraphs (B) and (I) thereof) with respect to such qualified trust hold in the aggregate 5 percent or more in value of the interests in the real estate investment trust and such real estate investment trust has accumulated earnings and profits attributable to any period for which it did not qualify as a real estate investment trust. "(B) COORDINATION WITH PERSONAL HOLDING COMPANY RULES.—If any entity qualifies as a real estate investment trust for any taxable year by reason of subparagraph (A), such entity shall not be treated as a personal holding company for such taxable year for purposes of part II of subchapter G of this chapter. "(C) TREATMENT FOR PURPOSES OF UNRELATED BUSI- NESS TAX.—If any qualified trust holds more than 10 per- cent (by value) of the interests in any pension-held REIT at any time during a taxable year, the trust shall be treated as having for such taxable year gross income from an unrelated trade or business in an amount which bears the same ratio to the aggregate dividends paid (or treated as paid) by the REIT to the trust for the taxable year of the REIT with or within which the taxable year of the trust ends (the 'REIT year*) as— "(i) the gross income (less direct expenses related thereto) of the REIT for the REIT year from unrelated trades or businesses (determined as if the REIT were a qualified trust), bears to "(ii) the gross income (less direct expenses related thereto) of the REIT for the REIT year. This subparagraph shall apply only if the ratio determined under the preceding sentence is at least 5 percent. "(D) PENSION-HELD REIT.—The purposes of subpara- graph (C)— "(i) IN GENERAL.—^A real estate investment trust is a pension-held REIT if such trust would not have qualified as a real estate investment trust but for the provisions of this paragraph and if such trust is predominantly held by qualified trusts.