A bill to amend the Internal Revenue Code of 1954 to require a mandatory section 338 election in hostile stock takeovers, and for other purposes.

Amends the Internal Revenue Code to require that a hostile stock purchase in a corporate takeover attempt be treated as an asset acquisition by the purchasing corporation.

Disallows any income tax deduction for: (1) any "greenmail payment" made in connection with a corporate takeover; or (2) any interest paid or accrued on indebtedness incurred to acquire stock in a corporation pursuant to a hostile offer. Defines "greenmail payment" as any payment made by a corporation in redemption of stock of such corporation which is held by a four-percent shareholder if: (1) such shareholder held such stock for less than two years; and (2) during the two-year period ending on the date of such sale or exchange there was a public tender offer for stock in such corporation.