Reg. § 1.503(e)-3 Effective dates.
(a) Section and and are effective in the case of an employees' trust described in section for taxable years ending after March 15, 1956. Thus, if during a taxable year ending before March 16, 1956, an employees' trust made a loan which meets the requirements of section , such loan will not be treated as made without the receipt of adequate security and will not cause the loss of exemption for taxable years ending after March 15, 1956, although such loan was not considered adequately secured when made. (However, section does not apply to organizations described in section not referred to in section (2) or (3) for transactions occurring after December 31, 1974.)
(b)
(1) In the case of obligations acquired by an employees' trust described in section before September 2, 1958, which were held on that date, the requirements described in and which were not satisfied immediately following the acquisition shall be treated as satisfied at that time if those requirements would have been satisfied had the obligations been acquired on September 2, 1958. For example, on January 3, 1955, an employees' trust described in section purchased through the New York Stock Exchange unsecured debentures issued by the employer corporation. Under section the acquisition of such debentures by the trust will not be treated for taxable years ending after March 15, 1956, as a loan made without the receipt of adequate security if the debentures were held by the employees' trust on September 2, 1958, and if the requirements of and which were not met on January 3, 1955, were met on September 2, 1958, as if that date were the date of acquisition.
(2) In the case of obligations acquired before September 2, 1958, which were not held by the employees' trust described in section on that date, only the requirements described in must be satisfied for section to be applicable to such acquisition. For example, if on December 5, 1956, an employees' trust lent money to the employer corporation by purchasing a debenture issued by the employer and if the trust sold the debenture on August 1, 1958, such loan would not be treated as made without the receipt of adequate security if the requirement described in was met on December 5, 1956.
(c) Section and and are effective in the case of trusts described in section with respect to loans made, renewed, or, in the case of demand loans, continued after December 31, 1959, and in the case of trusts described in section with respect to loans made, renewed or, in the case of demand loans, continued after December 31, 1969.
(d) See for the effective dates for the application of the definition of adequate security.
[T.D. 7428, 41 FR 34626, Aug. 16, 1976]