112 STAT. 808 PUBLIC LAW 105-206-^ULY 22, 1998 (D) Subsection (c) of section 2057 of the 1986 Code (as so redesignated) is amended by striking "(determined without regard to this section)". (E) The table of sections for part III of subchapter A of chapter 11 of the 1986 Code is amended by striking the item relating to section 2033A. (F) The table of sections for part IV of such subchapter is amended by adding at the end the following new item: "Sec. 2057. Family-owned business interests.". (2) Section 2057(b)(3) of the 1986 Code (as so redesignated) is amended to read as follows: "(3) INCLUDIBLE GIFTS OF INTERESTS. —The amount of the gifts of qualified family-owned business interests determined under this paragraph is the sum of— "(A) the amount of such gifts from the decedent to members of the decedent's family taken into account under section 2001(b)(1)(B), plus "(B) the amount of such gifts otherwise excluded under section 2503(b), to the extent such interests are continuously held by members of such family (other than the decedent's spouse) between the date of the gift and the date of the decedent's death.". (3)(A) Section 2057(e)(2)(C) of the 1986 Code (as so redesignated) is amended by striking "(as defined in section 543(a))" and inserting "(as defined in section 543(a) without regard to paragraph (2)(B) thereof) if such trade or business were a corporation". (B) Clause (ii) of section 2057(e)(2)(D) of the 1986 Code (as so redesignated) is amended by striking "income of which is described in section 543(a) or" and inserting "personal holding company income (as defined in subparagraph (C)) or income described". (C) Paragraph (2) of section 2057(e) of the 1986 Code (as so redesignated) is amended by adding at the end the following new flush sentence: "In the case of a lease of property on a net cash basis by the decedent to a member of the decedent's family, income from such lease shall not be treated as personal holding company income for purposes of subparagraph (C), and such property shall not be treated as an asset described in subparagraph (D)(ii), if such income and property would not be so treated if the lessor had engaged directly in the activities engaged in by the lessee with respect to such property.". (4) Paragraph (2) of section 2057(f) of the 1986 Code (as so redesignated) is amended— (A) by striking "(as determined under rules similar to the rules of section 2032A(c)(2)(B))"; and (B) by adding at the end the following new subparagraph: "(C) ADJUSTED TAX DIFFERENCE.— For purposes of subparagraph (A)— "(i) IN GENERAL.— The adjusted tax difference attributable to a qualified family-owned business interest is the amount which bears the same ratio to the adjusted tax difference with respect to the estate (determined under clause (ii)) as the value of such
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