26 U.S.C. § 597: Treatment of transactions in which Federal financial assistance provided

The treatment for purposes of this chapter of any transaction in which Federal financial assistance is provided with respect to a bank or domestic building and loan association shall be determined under regulations prescribed by the Secretary. provide that Federal financial assistance shall be properly taken into account by the institution from which the assets were acquired, and provide the proper method of allocating basis among the assets so acquired (including rights to receive Federal financial assistance). In the case of any transaction not described in paragraph (1), the regulations prescribed under subsection (a) shall provide for the proper treatment of Federal financial assistance and appropriate adjustments to basis or other tax attributes in connection with such assistance. No regulations prescribed under this section shall permit the utilization of any deduction (or other tax benefit) if such amount was in effect reimbursed by nontaxable Federal financial assistance. any money or other property provided with respect to a domestic building and loan association by the Federal Savings and Loan Insurance Corporation or the Resolution Trust Corporation pursuant to section 406(f) of the National Housing Act (or under any other similar provision of law), and any money or other property provided with respect to a bank or domestic building and loan association by the Federal Deposit Insurance Corporation pursuant to section 11(f) or 13(c) of the Federal Deposit Insurance Act (or under any other similar provision of law), For purposes of this section, the term “domestic building and loan association” has the meaning given such term by section 7701(a)(19) without regard to subparagraph (C) thereof. The amendments made by subsection (a)(3) [amending this section and repealing provisions set out below] shall apply to any amount received or accrued by the financial institution on or after May 10, 1989 , except that such amendments shall not apply to transfers on or after such date pursuant to an acquisition to which the amendment made by subsection (a)(1) [amending section 368 of this title ] does not apply. In the case of any payment pursuant to a transaction on or after May 10, 1989 , and before the date on which the Secretary of the Treasury (or his delegate) takes action in exercise of his regulatory authority under section 597 of the Internal Revenue Code of 1986 (as amended by subsection (a)(3)), the taxpayer may rely on the legislative history for the amendments made by subsection (a)(3) in determining the proper treatment of such payment. The provisions of subsection (b)(1) [set out below] shall take effect on the date of the enactment of the Tax Reform Act of 1986 [ Oct. 22, 1986 ]. The amendment made by subsection (b)(2) [amending provisions set out below] shall take effect on the date of the enactment of the Technical and Miscellaneous Revenue Act of 1988 [ Nov. 10, 1988 ].” after the date of the enactment of this Act [ Nov. 10, 1988 ], and before January 1, 1990 , unless such transfer is pursuant to an acquisition occurring on or before such date of enactment, and after December 31, 1989 , if such transfer is pursuant to an acquisition occurring after such date of enactment and before January 1, 1990 .” after December 31, 1988 , and before January 1, 1990 , unless such transfer is pursuant to an acquisition occurring before January 1, 1989 , and after December 31, 1989 , if such transfer is pursuant to an acquisition occurring after December 31, 1988 , and before January 1, 1990 .