((a)) ** In general** For purposes of title 26, gain or loss from the sale or exchange of any applicable preferred stock by any applicable financial institution shall be treated as ordinary income or loss.
((b)) ** Applicable preferred stock** For purposes of this section, the term “applicable preferred stock” means any stock—
((1)) which is preferred stock in—
((A)) the Federal National Mortgage Association, established pursuant to the Federal National Mortgage Association Charter Act ( et seq.), or
((B)) the Federal Home Loan Mortgage Corporation, established pursuant to the Federal Home Loan Mortgage Corporation Act ( et seq.), and
((2)) which—
((A)) was held by the applicable financial institution on , or
((B)) was sold or exchanged by the applicable financial institution on or after , and before .
((c)) ** Applicable financial institution** For purposes of this section:
((1)) ** In general** Except as provided in paragraph (2), the term “applicable financial institution” means—
((A)) a financial institution referred to in , or
((B)) a depository institution holding company (as defined in ).
((2)) ** Special rules for certain sales** In the case of—
((A)) a sale or exchange described in subsection (b)(2)(B), an entity shall be treated as an applicable financial institution only if it was an entity described in subparagraph (A) or (B) of paragraph (1) at the time of the sale or exchange, and
((B)) a sale or exchange after , of preferred stock described in subsection (b)(2)(A), an entity shall be treated as an applicable financial institution only if it was an entity described in subparagraph (A) or (B) of paragraph (1) at all times during the period beginning on , and ending on the date of the sale or exchange of the preferred stock.
((d)) ** Special rule for certain property not held on ** The Secretary of the Treasury or the Secretary’s delegate may extend the application of this section to all or a portion of the gain or loss from a sale or exchange in any case where—
((1)) an applicable financial institution sells or exchanges applicable preferred stock after , which the applicable financial institution did not hold on such date, but the basis of which in the hands of the applicable financial institution at the time of the sale or exchange is the same as the basis in the hands of the person which held such stock on such date, or
((2)) the applicable financial institution is a partner in a partnership which—
((A)) held such stock on , and later sold or exchanged such stock, or
((B)) sold or exchanged such stock during the period described in subsection (b)(2)(B).
((e)) ** Regulatory authority** The Secretary of the Treasury or the Secretary’s delegate may prescribe such guidance, rules, or regulations as are necessary to carry out the purposes of this section.
((f)) ** Effective date** This section shall apply to sales or exchanges occurring after , in taxable years ending after such date.December 31, 20072007-12-31