SECTION 6. SALE OR EXCHANGE

OF QUALIFIED PREFERRED STOCK BY CERTAIN SUBSIDIARIES OF APPLICABLE FINANCIAL INSTITUTIONS

.01 Scope . This section applies if either all of the requirements in Paragraph (1) of this Subsection, or all of the requirements in Paragraph (2) of this Subsection, are satisfied.

(1) Sale or exchange on or after Jan- uary 1, 2008, and before September 7, 2008. (a) A corporation for state law or federal tax law purposes (the Subsidiary) sold or exchanged QPS on or after January 1, 2008, and before September 7, 2008 (the Transaction);

(b) At the time of the Transaction, the Subsidiary was owned (in whole or in part, directly or indirectly) by another corporation that was a financial institution referred to in section 582(c)(2)(A)(i) or (ii) (Financial Institution);

(c) In the calendar quarter in which the Transaction occurred, the assets of the Subsidiary were consolidated with the assets of the Financial Institution on a line-by-line basis on the Consolidated Reports of Condition and Income and their supporting schedules (the call report) that the Financial Institution filed with its federal bank supervisory authorities; and

(d) The Subsidiary and the Financial Institution joined in the filing of a federal income tax return on which gain or loss from the Transaction was reported.

(2) Sale or exchange after September 6, 2008. (a) A corporation for state law or federal tax law purposes (the Subsidiary) sold or exchanged QPS after September 6, 2008 (the Transaction);

(b) On September 6, 2008, and at all times thereafter until the Transaction, the Subsidiary held the QPS that was the subject of the Transaction;

(c) On September 6, 2008, and at all times thereafter until immediately after the Transaction, the Subsidiary was owned (in whole or in part, directly or indirectly) by another corporation that was a financial institution referred to in section 582(c)(2)(A)(i) or (ii) (Financial Institution);

(d) In every calendar quarter that both ends after September 6, 2008, and begins

on or before the date of the Transaction, the assets of the Subsidiary were consolidated with the assets of the Financial Institution on a line-by-line basis on the Consolidated Reports of Condition and Income and their supporting schedules (the call report) that the Financial Institution filed with its federal bank supervisory authorities; and

(e) The Subsidiary and the Financial Institution joined in filing the same federal income tax return(s) for each taxable year of the Subsidiary and the Financial Institution that included all, or any portion, of the period beginning on September 7, 2008, and extending through and including the date of the Transaction.

.02 Application . EESA § 301 treats the Subsidiary’s gain or loss on the Transaction as ordinary income or loss.