Complete Home & Office Legal Guide/Complete Home and Office Legal Guide (Chestnut) (1993).ISO/stat/fed/irc7.asc

Text File | 1993-08-24 | 51KB | 938 lines

(2)  Transfers of debt more than 1 year after initial borrowing
not treated as increasing non qualified nonrecourse financing. --
For purposes of paragraph (1), the amount of nonqualified
nonrecourse financing (within the meaning of subsection
(a)(1)(D)) with respect to the taxpayer shall not be treated as
increased by reason of a transfer of (or agreement to transfer)
any evidence of any indebtedness if such transfer occurs (or such
agreement is entered into) more than 1 year after the date such
indebtedness was incurred.
(3)  Special rules for certain energy property. -- Rules similar
to the rules of section 47(d)(3) (as in effect on the day before
the date of the enactment of the Revenue Reconciliation Act of
1990) shall apply for purposes of this subsection.
(4)  Special rule. -- Any increase in tax under paragraph (1)
shall not be treated as tax imposed by this chapter for purposes
of determining the amount of any credit allowable under subpart
A, B, D, or G.

50.  Other special rules
(a)  Recapture in case of dispositions, etc. -- Under regulations
prescribed by the Secretary --
(1)  Early disposition, etc. --
(A)  General rule. -- If, during any taxable year, investment
credit property is disposed of, or otherwise ceases to be
investment credit property with respect to the taxpayer, before
the close of the recapture period., then the tax under this
chapter for such taxable year shall be increased by the recapture
percentage of the aggregate decrease in the credits allowed under
section 38 for all prior taxable years which would have resulted
solely form reducing to zero any credit determined under this
subpart with respect to such property.
(B)  Recapture percentage. -- For purposes of subparagraph (A),
the recapture percentage shall be determined in accordance with
the following table:
If the property ceases to be                       The recapture
investment credit property within --               percentage is:
(i)  One full year after placed in service              100
(ii) One full year after the close of the period
described in clause (i)                                  80
(iii) One full year after the close of the period
described in clause (ii)                                 60
(iv)  One full year after the close of the period
described in clause (iii)                                40
(v)   One full year after the close of the period
described in clause (iv)                                  20

(2)  Property ceases to qualify for progress expenditures. --
(A)  In general. -- If during any taxable year any building to
which section 47(d) applied ceases (by reason of sale or other
disposition, cancellation or abandonment of contract, or
otherwise) to be, with respect to the taxpayer, property which,
when placed in service, will be a qualified rehabilitated
building, then the tax under this chapter for such taxable year
shall be increased by an amount equal to the aggregate decrease

in the credits allowed under section 38 for all prior taxable
years which would have resulted solely from reducing to zero the
credit determined under this subpart with respect to such
building.
(B)  Certain excess credit recaptured. -- Any amount which would
have been applied as a reduction under paragraph (2) of section
47(b) but for the fact that a reduction under such paragraph
cannot reduce the amount taken into account under section
47(b)(1) below zero shall be treated as an amount required to be
recaptured under subparagraph (A) for the taxable year during
which the building is placed in service.
(C)  Certain sales and leasebacks. -- Under regulations
prescribed by the secretary, a sale by, and leaseback to, a
taxpayer who, when the property is placed in service, will be a
lessee to whom the rules referred to in subsection (c)(4) apply
shall not be treated as a cessation described in subparagraph (A)
to the extent that the amount which will be passed through to the
lessee under such rules with respect to such property is not less
than the qualified rehabilitation expenditures properly taken
into account by the lessee under section 47(d) with respect to
such property.
(D)  Coordination with paragraph (1). -- If, after property is
placed in service, there is a disposition or other cessation
described in paragraph (1), then paragraph (1) shall be applied
as if any credit which was allowed by reason of section 47(d) and
which has not been required to be recaptured before such
disposition, cessation, or change in use were allowable for the
taxable year the property was laced in service.
(E)  Special rules. -- Rules similar to the rules of this
paragraph shall apply in cases where qualified progress
expenditures were taken into account under the rules referred to
in section 48(a)(5)(A).
(3)  Carrybacks and carryovers adjusted. -- In the case of any
cessation described in paragraph (1) or (2), the carrybacks and
carryovers under section 39 shall be adjusted by reason of such
cessation.
(4)  Subsection not to apply in certain cases. -- Paragraphs (1)
and (2) shall not apply to --
(A)  a transfer by reason of death, or
(B)  a transaction to which section 381(a) applies.
For purposes of this subsection, property shall not be treated as
ceasing to be investment credit property with respect to the
taxpayer by reason of a mere change in the form of conducting the
trade or business so long as the property is retained in such
trade or business as investment credit property and the taxpayer
retains a substantial interest in such trade or business.
 (5)  Definitions and special rules. --
(A)  Investment credit property. -- For purposes of this
subsection, the term "investment credit property" means any
property eligible for a credit determined under this subpart.
(B)  Transfer between spouses or incident to divorce. -- In the
case of any transfer described in subsection (a) of section 1041
(i)  the foregoing provisions of this subsection shall not apply,
and
(ii)  the same tax treatment under this subsection respect to the
transferred property shall apply to the transferee as would have
applied to the transferor.
(C)  Special rule. -- Any increase in tax under paragraph (1) or
(2) shall not be treated as tax imposed by this chapter for
purposes of determining the amount of any credit allowable under
subpart A, B, D, or G.
(b)  Certain property not eligible. -- No credit shall be
determined under this subpart with respect to --
(1)  Property used outside United States. --
(A)  In general. -- Except as provided in subparagraph (B), no
credit shall be determined under this subpart with respect to any
property which is used predominantly outside the United States.
(B)  Exceptions. -- Subparagraphs (A) shall not apply to any
property described in section 168(g)(4).
(2)  Property used for lodging. -- No credit shall be determined
under this subpart with respect to any property which is used
predominantly to furnish lodging or in connection with the
furnishing of lodging.  The preceding sentence shall not apply to
--
(A)  nonlodging commercial facilities which are available to
persons not using the lodging facilities on the same basis as
they are available to persons using the lodging facilities.
(B)  property used by a hotel or motel in connection with the
trade or business of furnishing lodging where the predominant
portion of the accommodations is used by transients;
(C)  a certified historic structure to thee extent of that
portion of the basis which is attributable to qualified
rehabilitation expenditures; and
(D)  any energy property.
(3)  Property used by certain tax-exempt organizations. -- No
credit shall be determined under this subpart with respect to any
property used by an organization (other than a cooperative
described in section 521) which is exempt from the tax imposed by
this chapter unless such property is used predominantly in an
unrelated trade or business th