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107 STAT. 466 PUBLIC LAW 103-66—AUG. 10, 1993 26 use 305. (1) IN GENERAL.—Section 305 is amended by redesignating subsection (e) as subsection (f) and by inserting after subsection (d) the following new subsection: "(e) TREATMENT OF PURCHASER OF STRIPPED PREFERRED STOCK.— "(1) IN GENERAL.—If any person purchases after April 30, 1993, any stripped preferreid stock, then such person, while holding such stock, shall include in gross income amounts equal to the amounts which would have been so includible if such stripped preferred stock were a bond issued on the purchase date and having original issue discount equal to the excess, if any, of— "(A) the redemption price for such stock, over "(B) the price at which such person purchased such stock. The preceding sentence shall also apply in the case of any person whose basis in such stock is determined by reference to the basis in the hands of such purchaser. "(2) BASIS ADJUSTMENTS.—Appropriate adjustments to basis shall be made for amounts includible in gross income under paragraph (1). "(3) TAX TREATMENT OF PERSON STRIPPING STOCK.—If any person strips the rights to 1 or more dividends from any stock described in paragraph (5XB) and after April 30, 1993, disposes of such dividend rights, for purposes of paragraph (1), such person shall be treated as having purchased the stripped pre- ferred stock on the date of such disposition for a purchase price equal to such person's adjusted basis in such stripped preferred stock. "(4) AMOUNTS TREATED AS ORDINARY INCOME.—Any amount included in gross income under paragraph (1) shall l>e treated as ordinary income. "(5) STRIPPED PREFERRED STOCK.—^For purposes of this subsection— "(A) IN GENERAL.—^The term 'stripped preferred stock' means any stock described in subparagraph (B) if there has been a separation in ownership between such stock and any dividend on such stock which has not become payable. "(B) DESCRIPTION OF STOCK.—Stock is described in this subsection if such stock— "(i) is limited and preferred as to dividends and does not participate in corporate growth to any signifi- cant extent, and "(ii) has a fixed redemption price. "(6) PURCHASE.—^For piuposes of this subsection, the term 'purchase' means— "(A) any acquisition of stock, where "(B) the basis of such stock is not determined in whole or in part by the reference to the adjusted basis of such stock in the hands of the person from whom acquired." (2) COORDINATION WITH SECTION i67(e).—Paragraph (2) of section 167(e) is amended to read as follows: "(2) COORDINATION WITH OTHER PROVISIONS.— "(A) SECTION 273.—^This subsection shall not apply to any term interest to which section 273 appUes.