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Page:United States Statutes at Large Volume 98 Part 1.djvu/549

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 501

Subtitle A—Amendments Related to the Tax Equity and Fiscal Responsibility Act of 1982 Sec. Sec. Sec. Sec. Sec.

711. 712. 713. 714. 715.

Technical corrections of provisions relating to individuals. Technical corrections of provisions primarily relating to businesses. Technical corrections of pension provisions. Miscellaneous provisions. Effective date.

Subtitle B—Amendments Related to Subchapter S Revision Act of 1982; Etc. Sec. 721. Technical corrections of Subchapter S Revision Act of 1982. Sec. 722. Miscellaneous provisions. Subtitle C—Amendments Relating to Highway Revenue Act of 1982 Sec. 731. Value of used components furnished by first user not taken into account in determining price. Sec. 732. Clarification of application of gasoline excise tax to gasohol, etc. Sec. 733. Certain chain operators of retail gasoline stations treated as producers. Sec. 734. Other technical amendments. Sec. 735. Repeal of certain provisions made obsolete by Highway Revenue Act of 1982. Sec. 736. Effective date. TITLE VIII—FOREIGN SALES CORPORATIONS

w8

Sec. 801. Foreign sales corporations. Sec. 802. Interest charge DISC. Sec. 803. Taxable year of DISC and FSC required to conform to taxable year of majority shareholder. Sec. 804. Reporting requirements. Sec. 805. Effective date; transition rules. TITLE IX—HIGHWAY REVENUE PROVISIONS Subtitle A—Provisions Relating to Heavy Vehicle Use Tax Sec. 901. Reduction of heavy vehicle use tax. Sec. 902. Special rule for trucks used in logging. Sec. 903. Special rule for certain agricultural vehicles. Subtitle B—Provisions Relating to Fuel Taxes Sec. Sec. Sec. Sec. Sec.

911. 912. 913. 914. 915.

Increase in diesel fuel tax. Decrease in tax imposed on gasohol. Modification of tax imposed on methanol and ethanol. Extension of reduction in tax for fuel used by taxicabs. 3 cent tax on diesel fuel, etc., used in certain buses.

Subtitle C—Temporary Reduction in Retail Tax on Certain Piggyback Trailers Sec. 921. Temporary reduction in tax. ^i^^r f

-

Subtitle D—Studies PART I—STUDIES RELATING TO HEAVY VEHICLE USE TAX

Sec. Sec. Sec. Sec.

931. 932. 933. 934.

Whether heavy vehicles bear fair share of highway costs. Trans-border trucking. Weight-distance teixes. Reports, etc. PART II—OTHER STUDIES

Sec. 935. Study of reduced fuel taxes for taxicabs. Sec. 936. Study of piggyback trailers. TITLE X—MISCELLANEOUS REVENUE PROVISIONS Subtitle A—Capital Gains and Losses Sec. 1001. Decrease in holding period required for long-term capital gain treatment. Sec. 1002. Repeal of special rule for pre-1970 losses.

^

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Page:United States Statutes at Large Volume 98 Part 1.djvu/550

 98 STAT. 502

PUBLIC LAW 98-369—JULY 18, 1984 1

Subtitle B—Excise Tax Provisions -jsn Jwis,! / - A ^L-itsiyE PART I—BOATING SAFETY AND SPORT FISH RESTORATION SUBPART A—BOATING SAFETY AMENDMENTS

Sec. Sec. Sec. Sec.

1010. 1011. 1012. 1013.

Policy. General amendments to title 46. Authorization of funds for boating safety. Effective date. SUBPART B—SPORT FISH RESTORATION PROGRAM

Sec. 1014. Amendments to the sport fish restoration program. Subpart C—Taxes on Sales of Sport Fishing Equipment, Etc. Sec. 1015. Tax on sale of sport fishing equipment. Sec. 1016. Establishment of Aquatic Resources Trust Fund. Sec. 1017. Tax on certain arrows. PART II—OTHER EXCISE TAXES

Sec. 1018. Exemption from aviation excise tax for certain helicopter operations. Sec. 1019. Technical amendments to the Hazardous Substance Response Revenue Act of 1980. Subtitle C—Estate and Gift Tax Provisions Sec. 1021. Deferral of estate taxes for interest in holding company which owns stock in closely held operating company. Sec. 1022. Permanent rules for reforming governing instruments creating charitable remainder trusts and other charitable interests. Sec. 1023. Alternate valuation election available only where it results in reduction of gross estate and estate tax. Sec. 1024. Alternate valuation election available on certain late returns. Sec. 1025. Modification of election or agreement under section 2082A. Sec. 1026. No gain recognized from net gifts made before March 4, 1981. Sec. 1027. Marital deduction for a usufruct. Sec. 1028. Credit against estate tax for transfers to Toiyabe National Forest. Subtitle D—Charitable Contributions and Exempt Organizations Sec. 1031. Increase in charitable volunteer mileage. Sec. 1032. Certain organizations providing child care included within the definition of tax-exempt organizations. Sec. 1033. Restrictions on church tax inquiries and examinations. Sec. 1034. Acquisition indebtedness of certain educational institutions. Sec. 1035. Transitional rule relating to the definition of qualified conservation contributions. Subtitle E—Income Tax Credits Sec. 1041. 1-year extension of targeted jobs credit. Sec. 1042. Increase in earned income credit. Sec. 1043. Alternative test for definition of qualified rehabilitated building. Subtitle F—Miscellaneous Housing Provisions Sec. 1051. Disaster loss deduction where taxpayer ordered to demolish or relocate residence in disaster area because of disaster. Sec. 1052. Allocation of expenses to parsonage allowances. Sec. 1053. Armed Forces overseas quarters. Sec. 1054. Treatment of home won in local radio contest and specially designed for handicapped foster child. Subtitle G—Extension of Existing Provisions and Transition Rules Sec. 1061. Extension of Payment-in-Kind Tax Treatment Act of 1983 to wheat for 1984 crop year. Sec. 1062. Extension of increased deduction for eliminating architectural and transportation barriers to the handicapped. Sec. 1063. Permanent disallowance of deduction for expenses of demolition of certain structures. Sec. 1064. Amortization of expenditures to rehabilitate low-income rental housing. Sec. 1065. Rules treating Indian tribal governments as States made permanent. Sec. 1066. Transitional rule for treatment of certain income from S corporations. Sec. 1067. Special leasing rules for certain coal gasification facilities.

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Page:United States Statutes at Large Volume 98 Part 1.djvu/551

 PUBLIC LAW 98-369—JULY 18, 1984

Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec.

Subtitle H—Additional Provisions 1071. Tax treatment of regulated investment companies. 1072. Technical modifications to tip reporting requirements. 1073. Tips treated as wages for purposes of Federal unemployment tax. 1074. Exclusion of certain services from the Federal Unemployment Tax Act. 1075. Taxation of unemployment compensation not to apply to compensation paid for weeks of unemployment ending before December 1, 1978. 1076. Exclusion from gross income of cancellations of certain student loans. 1077. Migratory bird hunting stamps. 1078. Exclusion from gross income of payments from the United States Forest Service as a result of restricting motorized traffic in the boundary waters canoe area. 1079. Tax exemption of corporations organized under Acts of Congress.

98 STAT. 503 " ?

i

?

Subtitle I—Studies Sec. 1081. Study of alternative income tax systems. Sec. 1082. Study of taxation by foreign countries on services performed in the United States.

Subtitle A—Deferral of Certain Tax Reductions PART I—INCOME TAX PROVISIONS SEC. 11. AMOUNT OF USED PROPERTY ELIGIBLE FOR INVESTMENT TAX CREDIT.

(a) GENERAL RULE,—Subparagraph (A) of section 48(c)(2) (relating 26 USC 48. to dollar limitation on amount of used section 38 property) is amended— (1) by striking out "$150,000 ($125,000 for taxable years beginning in 1981, 1982, 1983, or 1984)" and inserting in lieu thereof "$125,000 ($150,000 for taxable years beginning after 1987)", and (2) by striking out "$150,000 (or $125,000" each place it appears and inserting in lieu thereof "$125,000 (or $150,000^'. (b) TECHNICAL AMENDMENT.—Subparagraph (B) of section 48(c)(2) is amended by striking out "$75,000 ($62,500 for taxable years beginning in 1981, 1982, 1983, or 1984)" and inserting in lieu thereof "$62,500 ($75,000 for taxable years beginning after 1987)". SEC. 12. FINANCE LEASE PROVISIONS. (a) FOUR-YEAR DEFERRAL OF FINANCE LEASE PROVISIONS.—

(1) IN GENERAL.—Subparagraph (A) of section 209(d)(l) of the Tax Equity and Fiscal Responsibility Act of 1982 is amended by 26 USC 168 note. striking out "December 31, 1983" and inserting in lieu thereof "December 31, 1987". (2) FINANCE LEASE PROVISIONS CONTINUE TO APPLY TO FARM

PROPERTY.—Clause (i) of section 209(d)(l)(B) of such Act is 26 USC 168 note. amended by striking out "January 1, 1984" and inserting in lieu thereof "January 1, 1988". (3) TECHNICAL AMENDMENTS.—

b

(A) Subclause (I) of section 168(f)(8)(B)(ii) (relating to re- 26 USC 168. quirement that only 40 percent of lessee's property may be treated as qualified), as amended by section 209 of the Tax Equity and Fiscal Responsibility Act of 1982, is amended by striking out "1986" and inserting in lieu thereof "1990. (B) Paragraph (4) of section 168(i) (relating to limitations), as so amended, is amended by striking out "1985" each place it appears and inserting in lieu thereof "1989".

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Page:United States Statutes at Large Volume 98 Part 1.djvu/552

 98 STAT. 504 26 USC 168 note. 96 Stat. 432. 96 Stat. 442. Post, p. 1048. 26 USC 168 note.

.

PUBLIC LAW 98-369—JULY 18, 1984

(b) TERMINATION OF SAFE HARBOR LEASING RuLES.—Paragraph (8) of section 168(f) of the Internal Revenue Code of 1954 (relating to special rules for leasing), as in effect after the amendments made by section 208 of the Tax Equity and Fiscal Responsibility Act of 1982 but before the amendments made by section 209 of such Act, shall not apply to agreements entered into after December 31, 1983. The preceding sentence shall not apply to property described in paragraph (3)(G) or (5) of section 208(d) of such Act. (c) TRANSITIONAL RULES.—

(1) IN GENERAL.—The amendments made by subsection (a) shall not apply with respect to any property if— (A) a binding contract to acquire or to construct such property was entered into by or for the lessee before March 7, 1984, or (B) such property was acquired by the lessee, or the construction of such property was begun, by or for the lessee, before March 7, 1984. (2) SPECIAL RULE FOR CERTAIN AUTOMOTIVE PROPERTY.—

Y 26 USC 168 note.

,

(A) IN GENERAL.—The amendments made by subsection (a) shall not apply to property which is placed in service before January 1, 1988— (i) which is automotive manufacturing property, and (ii) with respect to which the lessee is a qualified lessee (within the meaning of section 208(d)(6) of the Tax Equity and Fiscal Responsibility Act of 1982). (B) $150,000,000 LIMITATION.—The provisions of subparagraph (A) shall not apply to any agreement if the sum of— (i) the cost basis of the property subject to the agreement, plus (ii) the cost basis of any property subject to an agreement to which subparagraph (A) previously applied and with respect to which the lessee was the lessee under the agreement described in clause (i) (or any related person within the meaning of section 168(e)(4)(D) of the Internal Revenue Code of 1954), exceeds $150,000,000. (C) AUTOMOTIVE MANUFACTURING PROPERTY.—For purposes of this paragraph, the term "automotive manufacturing property' means— (i) property used principally by the taxpayer directly in connection with the trade or business of the taxpayer of the manufacturing of automobiles or trucks (other than truck tractors) with a gross vehicle weight of 13,000 pounds or less, (ii) machinery, equipment, and special tools of the type included in former depreciation range guideline classes 37.11 and 37.12, and (iii) any special tools owned by the taxpayer which are used by a vendor solely for the production of component parts for sale to the taxpayer. (3) SPECIAL RULE FOR CERTAIN COGENERATION FACILITIES.—The

amendments made by subsection (a) shall not apply with respect to any property which is part of a coal-fired cogeneration facility— (A) for which an application for certification was filed with the Federal Energy Regulatory Commission on December 30, 1983,

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Page:United States Statutes at Large Volume 98 Part 1.djvu/553

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 505

(B) for which an application for a construction permit was filed with a State environmental protection agency on February 20, 1984, and (C) which is placed in service before January 1, 1988. SEC. 13. ELECTION TO EXPENSE CERTAIN DEPRECIABLE BUSINESS ASSETS. Paragraph (1) of section 1790)) (relating to dollar limitation) is amended by striking out the table contained therein and inserting in lieu thereof the following: "If the taxable year begins in: 1983, 1984, 1985, 1986, or 1987 1988 or 1989 1990 or thereafter

,.,,,

26 USC 179.

The applicable amount is: $5,000 7,500 10,000."

SEC. 14. EMPLOYEE STOCK OWNERSHIP CREDIT.

Subparagraph (B) of section 44GKaX2) (relating to employee stock ownership credit), as in effect before the amendments made by title rV of this Act, is amended by striking out the table contained therein and inserting in lieu thereof the following: "For aggregate compensation paid or accrued during a portion of the taxable year occurring in calendar yean 1983, 1984, 1985, 1986, or 1987 1988 or thereafter

The applicable percentage is: 0.5 " 0."

26 USC 44G. Post, p. 788.

]u(f^ "fe^u fe ^j- »

SEC. 15. COST-OF-LIVING ADJUSTMENTS IN PENSION PLAN LIMITATIONS. (a) GENERAL RULE.—Paragraph (3) of section 415(d) (relating to 26 USC 415.

freeze on adjustment to defined contribution and benefit plan limits) is amended by striking out "January 1, 1986" and inserting in lieu, thereof "January 1, 1988". (b) TECHNICAL AMENDMENT.—Subparagraph (A) of section 415(d)(2) (defining base periods), as amended by section 235(b)(2)(B) of the Tax Equity and Fiscal Responsibility Act of 1982, is amended by striking 96 Stat. 505. out "October 1, 1984" and inserting in lieu thereof "October 1, 1986". SEC. 16. REPEAL OF PARTIAL INTEREST EXCLUSION. (a) GENERAL RULE.—Subsections (a) and (c) of section 302 of the

26 USC 46, loi.

Economic Recovery Tax Act of 1981 are hereby repealed, and the 128 and note, ^ Internal Revenue Code of 1954 shall be applied and administered as ^^^^^21'^' if such subsections (and the amendments made by such subsections) 26 USC 1 etseq. had not been enacted. (b) CONFORMING AMENDMENT.—Paragraph (1) of section 57(a) is 26 USC 57. amended to read as follows: "(1) EXCLUSION OF DIVIDENDS.—Any amount excluded from gross income for the taxable year under section 116." SEC. 17. FOREIGN EARNED INCOME OF INDIVIDUALS. Subparagraph (A) of section 911(b)(2) (relating to limitation on 26 USC 911. foreign earned income) is amended by striking out the table contained therein and inserting in lieu thereof the following: "In the case of taxable years beginning in: 1983, 1984, 1985, 1986, or 1987 1988 1989 1990 and thereafter

The annual rate is: $80,000 85,000 90,000 95,000."

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Page:United States Statutes at Large Volume 98 Part 1.djvu/554

 98 STAT. 506 26 USC 48 note.

Ante, p. 505.

PUBLIC LAW 98-369—JULY 18, 1984 SEC. 18. EFFECTIVE DATE.

(a) GENERAL RULE.—The amendments made by this part shall apply to taxable years ending after December 31, 1983. (b) SPECIAL RuLE FOR SECTION 14.—The amendment made by section 14 shall not apply in the case of a tax credit employee stock ownership plan if— (1) such plan was favorably approved on September 23, 1983, by employees, and (2) not later than January 11, 1984, the employer of such employees was 100 percent owned by such plan. PART II—ESTATE AND GIFT TAX RATES SEC. 21. MAXIMUM RATE.

26 USC 2001.

26 USC 2001 note.

(a) GENERAL RULE.—Paragraph (2) of section 2001(c) (relating to phase-in of 50 percent maximum rate) is amended— (1) by striking out "1985" in subparagraph (A) and inserting in lieu thereof "1988", and (2) by striking out "1984" each place it appears in subparagraph (D) and inserting in lieu thereof "1984, 1985, 1986, or 1987". (b) EFFECTIVE DATE.—The amendments made by subsection (a) shall apply to the estates of decedents dying after, and gifts made after, December 31, 1983. PART III—EXCISE TAXES

26 USC 4987.

'

SEC. 25. TAX RATE ON NEWLY DISCOVERED OIL. (a) GENERAL RuLE.—Subparagraph (B) of section 4987(b)(3) (relating to rate of tax on newly discovered oil) is amended by striking out the table contained therein and inserting in lieu thereof the following: "For taxable periods beginning in: 1984, 1985, 1986, or 1987 1988 1989 and thereafter!!!!!"!!!!!!!"^

The applicable percentage is: 22^! 20 15."

(b) CONTINUATION OF PERCENTAGE DEPLETION FOR OIL AND GAS FROM SECONDARY OR TERTIARY PROCESS.—

26 USC 613A.

(1) Paragraph (2) of section 613A(c) (relating to exemption for independent producers and royalty owners) is amended by striking out the last sentence. (2) Subparagraph (A) of section 613A(c)(3) (defining depletable oil quantity) is amended by adding at the end thereof the following new sentence: "Clause (ii) shall not apply after December 31, 1983." (3) Subparagraph (E) of section 613A(c)(7) is amended by adding at the end thereof the following new sentence: "This subparagraph shall not apply after December 31, 1983." (4) Subparagraph (A) of section 613A(c)(9) (relating to transfer of oil or gas property) is amended by striking out "paragraph (1)" and inserting in lieu thereof "this subsection". (c) EFFECTIVE DATES.—

26 USC 4987 note.

(1) SUBSECTION (a).—The amendment made by subsection (a) shall apply to taxable periods beginning after December 31, 1983.

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Page:The Yellow Book - 06.djvu/295

By R. Murray Gilchrist

Master and I had wandered from our track and lost ourselves on the side of a great "edge." It was a two-days journey from the Valley of the Willow Brakes, and we had roamed aimlessly; eating at hollow-echoing inns where grey-haired hostesses ministered, and sleeping side by side through the dewless midsummer nights on beds of fresh-gathered heather.

Beyond a single-arched wall-less bridge that crossed a brown stream whose waters leaped straight from the upland, we reached the Domain of the Crimson Weaver. No sooner had we reached the keystone when a beldam, wrinkled as a walnut and bald as an egg, crept from a cabin of turf and osier and held out her hands in warning.

"Enter not the Domain of the Crimson Weaver!" she shrieked. "One I loved entered.—I am here to warn men. Behold, I was beautiful once!"

She tore her ragged smock apart and discovered the foulness of her bosom, where the heart pulsed behind a curtain of livid skin. My Master drew money from his wallet and scattered it on the ground.

"She is mad," he said. "The evil she hints cannot exist. There is no fiend." So

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Page:United States Statutes at Large Volume 98 Part 1.djvu/555

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 507

1 ^

(2) SUBSECTION (b).—The amendments made by subsection (b) 26 USC 613A. shall take effect on January 1, 1984. SEC. 26. EXCISE TAX ON COMMUNICATIONS SERVICES. Paragraph (2) of section 4251(b) (relating to rate of tax on commu- 26 USC 4251. nications services) is amended by striking out the table contained therein and inserting in lieu thereof the following: "With respect to amount paid pursuant to bills first rendered: During 1983, 1984, 1986, or 1987 During 1988 or thereafter

The applicable percentage is: 3 0."

SEC. 27. EXCISE TAX ON DISTILLED SPIRITS. (a) IMPOSITION OF TAX.—

(1) IN GENERAL.—Paragraphs (1) and (3) of section 5001(a) 26 USC 5001. (relating to rate of tax on distilled spirits) are each amended by I striking out "$10.50" and inserting in lieu thereof "$12.50'\ (2) TECHNICAL AMENDMENT.—Paragraphs (1) and (2) of section 5010(a) (relating to credit for wine content and for flavors 26 USC 5010. content) are each amended by striking out "$10.50" and inserting in lieu thereof "$12.50". t) 26 USC 500i (1) IMPOSITION OF TAX.—On distilled spirits on which tax was note. imposed under section 5001 or 7652 of the Internal Revenue Code of 1954 before October 1, 1985, and which were held on such date for sale by any person, there shall be imposed a tax at the rate of $2.00 for each proof gallon and a proportionate tax at the like rate on all fractional parts of a proof gallon. (2) EXCEPTION FOR CERTAIN SMALL WHOLESALE OR RETAIL DEAL-
 * O> FLOOR STOCKS TAXES ON DISTILLED SPIRITS.—

f:

ERS.—No tax shall be imposed by paragraph (1) on distilled spirits held on October 1, 1985, by any dealer if— (A) the aggregate liquid volume of distilled spirits held by such dealer on such date does not exceed 500 wine gallons, and (B) such dealer submits to the Secretary (at the time and in the manner required by the Secretary) such information as the Secretary shall require for purposes of this paragraph. (3) CREDIT AGAINST TAX.—Each dealer shall be allowed as a credit against the taxes imposed by paragraph (1) an amount equal to $800. Such credit shall not exceed the amount of taxes imposed by paragraph (1) for which the dealer is liable.

j = ..;r,

(4) LlABILITY FOR TAX AND METHOD OF PAYMENT.— (A) LIABILITY FOR TAX.—A person holding distilled

spirits on October 1, 1985, to which the tax imposed by paragraph (1) applies shall be liable for such tax.

" '

(B) METHOD OF PAYMENT.—The tax imposed by paragraph

(1) shall be paid in such manner as the Secretary shall by regulations prescribe. (C) T I M E FOR PAYMENT.—

- - '-^

•

(i) IN GENERAL.—Except as provided in clause (ii), the tax imposed by paragraph (1) shall be paid on or before April 1, 1986. (ii) INSTALLMENT PAYMENT OF TAX IN CASE OF SMALL

^" -

OR MIDDLE-SIZED DEALERS.—In the case of any small or middle-sized dealer, the tax imposed by paragraph (1) may be paid in 3 equal installments due as follows:

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Page:United States Statutes at Large Volume 98 Part 1.djvu/556

 98 STAT. 508

PUBLIC LAW 98-369—JULY 18, 1984 (I) The first installment shall be paid on or before April 1, 1986. (II) The second installment shall be paid on or before July 1, 1986. (III) The third installment shall be paid on or before October 1, 1986. If the taxpayer does not pay any installment under this clause on or before the date prescribed for its payment, the whole of the unpaid tax shall be paid upon notice and demand from the Secretary. (iii) SMALL OR MIDDLE-SIZED DEALER.—For purposes of

clause (ii), the term "smsdl or middle-sized dealer" means any dealer if the aggregate gross sales receipts of such dealer for its most recent taxable year ending before October 1, 1985, does not exceed $500,000. (5) CONTROLLED GROUPS.— (A) CONTROLLED GROUPS OF CORPORATIONS.—In

t; 1 If:

the case of a controlled group— (i) the 500 wine gallon amount specified in paragraph (2), (ii) the $800 amount specified in paragraph (3), and (iii) the $500,000 amount specified in paragraph (4)(C)(iii), shall be apportioned among the dealers who are component members of such group in such manner as the Secretary shall by regulations prescribe. For purposes of the preceding sentence, the term "controlled group" has the meaning given to such term by subsection (a) of section 1563 of the Internal Revenue Code of 1954; except that for such purposes the phrase "more than 50 percent" shall be substituted for the phrase "at least 80 percent" each place it appears in such subsection. (B) NONINCORPORATED DEALERS UNDER COMMON CONTROL.—Under regulations prescribed by the Secretary, principles similar to the principles of subparagraph (A) shall apply to a group of dealers under common control where 1 or more of such dealers is not a corporation.

(6) OTHER LAWS APPLICABLE.—All provisions of law, including

penalties, applicable with respect to the taxes imposed by section 5001 of the Internal Revenue Code of 1954 shall, insofar as applicable and not inconsistent with the provisions of this subsection, apply in respect of the taxes imposed by paragraph (1) to the same extent as if such taxes were imposed by such section 5001. (7) DEFINITIONS AND SPECIAL RULES.—For purposes of this subsection— (A) DEALER.—The term "dealer" means— (i) any wholesale dealer in liquors (as defined in .J section 5112(b) of the Internal Revenue Code of 1954), and (ii) any retail dealer in liquors (as defined in section 5122(a) of such Code). (B) DISTILLED SPIRITS.—The term "distilled spirits" hsis the meaning given such term by section 5002(a)(8) of the Internal Revenue Code of 1954.,

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Page:Notes and Queries - Series 1 - Volume 1.djvu/228

218

A query made by so experienced a writer as the noble historian of Audley End, cannot admit of easy solution; and instead of professing to answer the two-fold query on pokership, it might more become me to style this note an attempt to answer it.

In the Historical collections of the noble families of Cavendishe, etc. the passage which contains the doubtful word is printed thus:—

Are we to read parkership or pokership? If pokership, what is its meaning?

Skelton, the rhymer, has parker for park-keeper, so that parkership is an admissible word; but I reject it on this occasion, as inapplicable to a forest or chace. I incline to believe that pokership is the true lection. Poke denoted a purse; witness Chaucer:—

We do not find poker in Barret or Cotgrave; but if poke denoted a purse, poker might denote a purse-bearer or treasurer, and pokership, the office of purse-bearer. So we have, [Glossarivm manvale, 1772. I. 849.] bursar, bursarship, etc.

A correspondent, "W.," in No. 12. p. 185., wishes to learn "the real surname of Theodoric Mertens, Martins, or Martini, the printer of Louvain."

In Latin the name is written Theodoricus Martinus; in French, Thierri Martin; in Flemish, Diedrych Meertens, and occasionally, but I think incorrectly, Dierix Martens.

In a side chapel of the chancel of the church at Alost, midway between Brussels and Ghent, is the printer's tomb, and a double inscription, in Latin and in Flemish, commemorates his celebrity and the dates of his birth and death: in the Latin inscription the name is Theodoricus Martinus; in the Flemish, which is very old and nearly effaced it is Diedrych Meertens.

The name of Meertens, as a surname, is as common in Brabant and Flanders as that of Martin with us.

I beg to say that, in Peignot's Dictionnaire raisonné de Bibliologie, the name of the printer Mertens is given as "Martens, Mertens, ou Martin d'Alost (Thierry), en Latin Theodoricus Martinus." The article is too long for insertion in your pages, but it contains an account of the title-page of one of his editions, in 4to., in which the name is spelt Mertens: "Theo. Mertens impressore." Two other title-pages have "Apud Theod. Martinum." So it appears that the printer himself used different modes of spelling his own name. Erasmus wrote a Latin epitaph on his friend, in which a graceful allusion is made to his printer's mark, the anchor:—

In reply to the inquiry of "D. S. Y." (p. 158. of your 10th number), I beg to say that the name of Armagh is written, in Irish, Ardmacha, and signifies the Height (or high ground) of Macha. It is supposed to have derived this name from Macha Mong-ruadh [i.e. Macha of the red hair], who was queen of Ireland, according to the Chronology of O'Flaherty, 3603.

Sir, There are the following authorities for different derivations of the word Armagh.

Camden, in his Britannia, says:—

Dr. Keating's ''Hist. of Ireland'' has as follows:—

Circles of Gomer (London, 1771), contains as follows:—

M. Bullet, Mémoires de la Langue Celtique, writes thus:—

But the 2nd and 3rd vols. of these Mémoires, which contain the Celtic Dictionary, afford a more probable interpretation:—

"Ar or Ard signifies a height, mountain, hill,


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Page:United States Statutes at Large Volume 98 Part 1.djvu/557

 PUBLIC LAW 98-369—JULY 18, 1984 "' '•

98 STAT. 509

(C) PERSON.—The term "person" includes any State or political subdivision thereof, or any agency or instrumentality of a State or political subdivision thereof. (D) SECRETARY.—The term "Secretary" means the Secretary of the Treasury or his delegate. (E) TREATMENT OF IMPORTED PERFUMES CONTAINING DISTILLED SPIRITS.—Any article described in section 5001(a)(3)

'

of such Code shall be treated as distilled spirits; except that the tax imposed by paragraph (1) shall be imposed on a wine gallon basis in lieu of a proof gallon basis. To the extent provided in regulations prescribed by the Secretary, the preceding sentence shall not apply to any article held on October 1, 1985, on the premises of a retail establishment.

(c) REQUIREMENT OF ELECTRONIC FUNDS TRANSFER FOR ALCOHOL AND TOBACCO EXCISE TAXES.— (1) ALCOHOL TAXES.—Section 5061 (relating to method of col-

26 USC 5061.

lecting tax on distilled spirits) is amended by adding at the end thereof the following new subsection: "(e) PAYMENT BY ELECTRONIC FUND TRANSFER.—

"(1) IN GENERAL.—Any person who in any 12-month period ending December 31, was liable for a gross amount equal to or exceeding $5,000,000 in taxes imposed on distilled spirits, wines, or beer by sections 5001, 5041, and 5051 (or 7652), respectively, shall pay such taxes during the succeeding calendar year by electronic fund transfer to a Federal Reserve Bank. "(2) ELECTRONIC FUND TRANSFER.—The term 'electronic fund transfer' means any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, which is initiated through an electronic terminal, telephonic instrument, or computer or magnetic tape so as to order, instruct, or authorize a financial institution to debit or credit an account." (2) TOBACCO TAXES.—Subsection (b) of section 5703 (relating to method of payment of tobacco taxes) is amended by adding at the end thereof the following new paragraph: "(3) PAYMENT BY ELECTRONIC FUND TRANSFER.—Any person who in any 12-month period, ending December 31, was liable for a gross amount equal to or exceeding $5,000,000 in taxes imposed on tobacco products and cigarette papers and tubes by section 5701 (or 7652) shall pay such taxes during the succeeding calendar year by electronic fund transfer (as defined in section 5061(e)(2)) to a Federal Reserve Bank." (d) EFFECTIVE DATES.— (1) IN GENERAL.—Except as provided in paragraph (2), the amendments made by this section shall take effect on October 1, (2) ELECTRONIC TRANSFER PROVISIONS.—The amendments made by subsection (c) shall apply to taxes required to be paid on or after September 30, 1984.
 * 1985.

26 USC 5703.

Supra. 26 USC 500i note.

Subtitle B—Tax-Exempt Entity Leasing SEC. 31. DENIAL OF TAX INCENTIVES FOR PROPERTY LEASED TO GOV"^^.k ERNMENTS AND OTHER TAX-EXEMPT ENTITIES. (a) GENERAL RULE.—Section 168 (relating to accelerated cost re- 26 USC 168. covery system) is amended by redesignating subsection (j) as subsec-

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Page:United States Statutes at Large Volume 98 Part 1.djvu/558

 98 STAT. 510

PUBLIC LAW 98-369—JULY 18, 1984 tion (k) and by inserting after subsection (i) the following new subsection: "(j) PROPERTY LEASED TO GOVERNMENTS AND OTHER TAX-EXEMPT ENTITIES.—

"(1) IN GENERAL.—Notwithstanding any other provision of this section, the deduction allowed under subsection (a) (and any other deduction allowable for depreciation or amortization) for any taxable year with respect to tax-exempt use property shall be determined— "(A) by using the straight-line method (without regard to salvage value), and "(B) by using a recovery period determined under the following table: "In the case of: The recovery period shall be: (I) Property not described in subclause (II) or subclause (III) The present class life. (II) Personal property with no present class life 12 years. (III) 18-year real property 40 years. "(2) OPERATING RULES.— "(A) RECOVERY PERIOD MUST AT LEAST EQUAL 125 PERCENT OF LEASE TERM.—In the case of any tax-exempt use prop-

erty, the recovery period used for purposes of paragraph (1) shall not be less than 125 percent of the lease term. "(B) CONVENTIONS.— "(i) PROPERTY OTHER THAN 18-YEAR REAL PROPERTY.—

In the case of property other than 18-year real property, the half-year convention shall apply for purposes of paragraph (1). (ii) 18-YEAR REAL PROPERTY.—In the case of 18-year real property, the amount determined under paragraph (1) shall be determined on the basis of the number of months (using a mid-month, convention) in the year in which the property is in service. "(C)

EXCEPTION WHERE LONGER RECOVERY PERIOD AP-

PLIES.—Paragraph (1) shall not apply to any recovery property if the recovery period which applies to such property (without regard to this subsection) exceeds the recovery period for such property determined under this subsection. "(D) DETERMINATION OF CLASS FOR REAL PROPERTY WHICH

Ante, p. 494.

IS NOT RECOVERY PROPERTY.—In the case of any real property which is not recovery property, for purposes of this subsection, the determination of whether such property is 18-year real property shall be made as if such property were recovery property. " (E) COORDINATION WITH SUBSECTION (f) (12).—Paragraph (12) of subsection (f) shall not apply to any tax-exempt use property to which this subsection applies. "(F) 18-YEAR REAL PROPERTY.—For purposes of this subsection, the term '18-year real property' includes— "(i) low-income housing, and "(ii) any property which was treated as 15-year real property under this section (as in effect before the . jros ifi - : amendments made by the Tax Reform Act of 1984).

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Page:United States Statutes at Large Volume 98 Part 1.djvu/559

 PUBLIC LAW 98-369—JULY 18, 1984 "(3) TAX-EXEMPT USE PROPERTY.—For purposes subsection—

98 STAT. 511 of this

"(A) PROPERTY OTHER THAN i 8-YEAR REAL PROPERTY.—

Except as otherwise provided in this subsection, the term 'tax-exempt use property' means that portion of any tangible property (other than 18-year real property) leased to a tax-exempt entity. "(B) 18-YEAR REAL PROPERTY.— "(i) IN GENERAL.—In the case of 18-year real property, the term 'tax-exempt use property' means that portion of the property leased to a tax-exempt entity in a disqualified lease. "(ii) DiSQUAUFiED LEASE.—For purposes of this subparagraph, the term 'disqualified lease' means any lease of the property to a tax-exempt entity, but only if— "(I) part or all of the property was financed ji /: o (directly or indirectly) by an obligation the interest on which is exempt from tax under section 103 and such entity (or a related entity) participated in W' such financing, "(II) under such lease there is a fixed or determinable price purchase or sale option which involves such entity (or a related entity) or there is the equivalent of such an option, "(III) such lease has a lease term in excess of 20 years, or "(IV) such lease occurs after a. sale (or other transfer) of the property by, or lease of the property from, such entity (or a related entity) and such i*:\ property has been used by such entity (or a related entity) before such sale (or other transfer) or lease, "(iii) 35-PERCENT THRESHOLD TEST.—Clause (i) shall apply to any property only if the portion of such property leased to tax-exempt entities in disqualified leases is more than 35 percent of the property. "(iv) TREATMENT OF IMPROVEMENTS.—For purposes of this subparagraph, improvements to a property (other than land) shall not be treated as a separate property. "(v) LEASEBACKS DURING IST 3 MONTHS OF USE NOT

TAKEN INTO ACCOUNT.—Subclause (IV) of clause (ii) shall not apply to any property which is leased within 3 months after the date such property is first used by the tax-exempt entity (or a related entity).

"
 * • i ^""^^•

"(C) EXCEPTION FOR SHORT-TERM LEASES.—

'••" '

"(i) IN GENERAL.—Property shall not be treated as tax-exempt use property merely by reason of a shortterm lease. "(ii) SHORT-TERM LEASE.—For purposes of clause (i),

the term 'short-term lease' means any lease the term of which is— "(I) less than 3 years, and "(II) less than the greater of 1 year or 30 percent of the property's present class life. In the case of 18-year real property and property with no present class life, subclause (II) shall not apply.

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Page:United States Statutes at Large Volume 98 Part 1.djvu/560

 98 STAT. 512

PUBLIC LAW 98-369—JULY 18, 1984 "(D)

EXCEPTION WHERE PROPERTY USED IN UNRELATED

TRADE OR BUSINESS.—The term 'tax-exempt use property' shall not include any portion of a property if such portion is predominantly used by the tax-exempt entity (directly or through a partnership of which such entity is a partner) in an unrelated trade or business the income of which is subject to tax under section 511. "(4) TAX-EXEMPT ENTITY.—

"(A) IN GENERAL.—For purposes of this subsection, the term 'tax-exempt entity' means— "(i) the United States, any State or political subdivision thereof, any possession of the United States, or any agency or instrumentality of any of the foregoing, "(ii) an organization (other than a cooperative described in section 521) which is exempt from tax imposed by this chapter, and "(iii) any foreign person or entity. "(B) EXCEPTIONS FOR CERTAIN PROPERTY USED BY FOREIGN PERSON OR ENTITY.— "(i) INCOME FROM PROPERTY SUBJECT TO UNITED STATES

TAX.—Clause (iii) of subparagraph (A) shall not apply with respect to any property if more than 50 percent of the gross income for the taxable year derived by the foreign person or entity from the use of such property is— "(I) subject to tax under this chapter, or "(II) included under section 951 in the gross income of a United States shareholder for the taxable year with or within which ends the taxable year of the controlled foreign corporation in which such income was derived. For purposes of the preceding sentence, any exclusion or exemption shall not apply for purposes of determining the amount of the gross income so derived, but shall apply for purposes of determining the portion of such gross income subject to tax under this chapter. "(ii) MOVIES AND SOUND RECORDINGS.—Clause (iii) of

Post, p. 635.

Corporations. Post, p. 635.

subparagraph (A) shall not apply with respect to any qualified film (as defined in section 48(k)(l)(B)) or any sound recording (as defined in section 48(r)). "(C) FOREIGN PERSON OR ENTITY.—For purposes of this paragraph, the term 'foreign person or entity' means— "(i) any foreign government, any international organization, or any agency or instrumentality of any of the foregoing, and "(ii) any person who is not a United States person. Such term does not include any foreign partnership or other foreign pass-thru entity. "(D) TREATMENT OF CERTAIN TAXABLE INSTRUMENTALITIES.—For purposes of this subsection and paragraph (5) of section 48(a), a corporation shall not be treated as an instrumentality of the United States or of any State or political subdivision thereof if— "(i) all of the activities of such corporation are subject to tax under this chapter, and

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text:
Page:United States Statutes at Large Volume 98 Part 1.djvu/561

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 513

"(ii) a majority of the board of directors of such corporation is not selected by the United States or any State or political subdivision thereof. "(E) CERTAIN PREVIOUSLY TAX-EXEMPT ORGANIZATIONS.—

"(i) IN GENERAL.—For purposes of this subsection and paragraph (4) of section 48(a), an organization shall be treated as an organization described in subparagraph (A)(ii) with respect to any property of which such organization is the lessee if such organization was an organization (other than a cooperative described in section 521) exempt from tax imposed by this chapter at any time during the 5-year period ending on the date such property was first leased to such organization. The preceding sentence shall not apply to the Federal Home Loan Mortgage Corporation, "(ii) ELECTION NOT TO HAVE CLAUSE (i) APPLY.—

"(I) IN GENERAL.—In the case of an organization formerly exempt from tax under section 501(a) as an organization described in section 501(c)(12), clause (i) shall not apply to such organization with respect to any property of which such organization is the lessee if such organization elects not to be exempt from tax under section 501(a) during the tax-exempt use period with respect to such property.

I, .. • ^

"(II)

'^"^^^

'

' J Sim;'

TAX-EXEMPT USE PERIOD.—For purposes of

subclause (I), the term 'tax-exempt use period' means the period beginning with the taxable year in which the property described in subclause (I) is placed in service under the lease and ending with ^jjg close of the 15th taxable year following the last taxable year of the recovery period of such property. "(III) ELECTION.—Any election under subclause (I), once made, shall be irrevocable, "(iii) TREATMENT OF SUCCESSOR ORGANIZATIONS.—Any organization which is engaged in activities substantially similar to those engaged in by a predecessor organization shall succeed to the treatment under this subparagraph of such predecessor organization.

"(5) SPECIAL RULES FOR CERTAIN HIGH TECHNOLOGY EQUIPMENT.— "(A) EXEMPTION WHERE LEASE TERM IS 5 YEARS OR LESS.—

For purposes of this subsection, the term 'tax-exempt use property' shall not include any qualified technological equipment if the lease to the tax-exempt entity has a lease term of 5 years or less. "(B)

RECOVERY PERIOD WHERE LEASE TERM IS GREATER

I

THAN 5 YEARS.—In the case of any qualified technological equipment not described in subparagraph (A) and which is not property to which subsection (f)(2) applies, the recovery period used for purposes of paragraph (1) shall be 5 years.

^

poses of this paragraph— "(i) IN GENERAL.—Except as otherwise provided in this subparagraph, the term 'qualified technological equipment' means—

"(C)

QUALIFIED TECHNOLOGICAL EQUIPMENT.—For

pur-

= ' ,,,

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text:
Page:United States Statutes at Large Volume 98 Part 1.djvu/562

 98 STAT. 514

PUBLIC LAW 98-369—JULY 18, 1984 "(I) any computer or peripheral equipment, "(II) any high technology telephone station equipment installed on the customer's premises, and "(III) any high technology medical equipment, "(ii) EXCEPTION FOR CERTAIN PROPERTY.—The term 'qualified technological equipment' shall not include any property leased to a tax-exempt entity if— "(I) part or all of the property was financed (directly or indirectly) by an obligation the interest on which is exempt from tax under section 103, "(II) such lease occurs after a sale (or other transfer) of the property by, or lease of such property from, such entity (or related entity) and such property has been used by such entity (or a related entity) before such sale (or other transfer) or lease, or "(III) such tax-exempt entity is the United States or any agency or instrumentality of the United States. "(iii) LEASEBACKS DURING 1ST 3 MONTHS OF USE NOT

TAKEN INTO ACCOUNT.—Subclause (II) of clause (ii) shall not apply to any property which is leased within 3 months after the date such property is first used by the tax-exempt entity (or a related entity). "(iv) PROPERTY NOT SUBJECT TO RAPID OBSOLESCENCE

Federal Register, publication.

MAY BE EXCLUDED.—The term 'qualified technological equipment' shall not include any equipment described in subclause (II) or (III) of clause (i)— "(I) which the Secretary determines by regulations is not subject to rapid obsolescence, and "(II) which is placed in service after the date on which final regulations implementing such determination are published in the Federal Register. "(D) COMPUTER OR PERIPHERAL EQUIPMENT DEFINED.—For

purposes of this paragraph— "(i) IN GENERAL.—The term 'computer or peripheral equipment' means— "(I) any computer, and "(II) any related peripheral equipment, "(ii) COMPUTER.—The term 'computer' means a programmable electronically activated device which— "(I) is capable of accepting information, applying prescribed processes to the information, and supplying the results of these processes with or without human intervention, and "(II) consists of a central processing unit containing extensive storage, logic, arithmetic, and control capabilities, "(iii) RELATED PERIPHERAL EQUIPMENT.—The term 'related peripheral equipment' means any auxiliary machine (whether on-line or off-line) which is designed to be placed under the control of the central processing unit of a computer. "(iv) EXCEPTIONS.—The term 'computer or peripheral equipment' shall not include—

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Page:United States Statutes at Large Volume 98 Part 1.djvu/563

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 515

"(I) any equipment which is an integral part of other property which is not a computer, "(II) typewriters, calculators, adding and accounting machines, copiers, duplicating equipment, and similar equipment, and "(III) equipment of a kind used primarily for amusement or entertainment of the user. "(E) HIGH TECHNOLOGY MEDICAL EQUIPMENT.—For purposes of this paragraph, the term 'high technology medical equipment' means any electronic, electromechanical, or computer-based high technology equipment used in the screening, monitoring, observation, diagnosis, or treatment of patients in a laboratory, medical, or hospital environment. "(6) OTHER SPECIAL RULES.—For purposes of this subsection— "(A) LEASE.—The term 'lease' includes any grant of a right to use property. "(B) LEASE TERM.—In determining a lease term—

 * u.

"(i) there shall be taken into account options to renew, and "(ii) 2 or more successive leases which are part of the same transaction (or a series of related transactions) with respect to the same or substantially similar property shall be treated as 1 lease. "(C) SPECIAL RULE FOR FAIR RENTAL OPTIONS ON 18-YEAR

REAL PROPERTY.—For purposes of clause (i) of subparagraph (B), in the case of 18-year real property, there shall not be taken into account any option to renew at fair market value, determined at the time of renewal. "(7) RELATED ENTITIES.—For purposes of this subsection— "(A)(i) Each governmental unit and each agency or instrumentality of a governmental unit is related to each other such unit, agency, or instrumentality which directly or indirectly derives its powers, rights, and duties in whole or in part from the same sovereign authority. "(ii) For purposes of clause (i), the United States, each State, and each possession of the United States shall be treated as a separate sovereign authority. "(B) Any entity not described in subparagraph (A)(i) is related to any other entity if the 2 entities have— "(i) significant common purposes and substantial lijfcfi,, common membership, or ,. ^., ^^i "(ii) directly or indirectly substantial common direc, * ^^ tion or control. "(C)(i) An entity is related to another entity if either entity owns (directly or through 1 or more entities) a 50 percent or greater interest in the capital or profits of the other entity. "(ii) For purposes of clause (i), entities treated as related under subparagraph (A) or (B) shall be treated as 1 entity. "(D) An entity is related to another entity with respect to a transaction if such transaction is part of an attempt by such entities to avoid the application of this subsection, section 46(e), paragraph (4) or (5) of section 48(a), or clause Post, p. 517. (vi) of section 48(g)(2)(B). Post, p. 518.

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Page:United States Statutes at Large Volume 98 Part 1.djvu/564

 98 STAT. 516

PUBLIC LAW 98-369—JULY 18, 1984 "(8) TAX-EXEMPT USE OF PROPERTY LEASED TO PARTNERSHIPS,

Post, p. 517.

ETC., DETERMINED AT PARTNER LEVEL.—For purposes of this subsection and paragraphs (4) and (5) of section 48(a)— "(A) IN GENERAL.—In the case of any property which is leased to a partnership, the determination of whether any portion of such property is tax-exempt use property shall be made by treating each tax-exempt entity partner's proportionate share (determined under paragraph (9)(C)) of such property as being leased to such partner. "(B) OTHER PASS-THRU ENTITIES; TIERED ENTITIES.—Rules

similar to the rules of subparagraph (A) shall also apply in the case of any pass-thru entity other than a partnership and in the case of tiered partnerships and other entities. "(C) PRESUMPTION WITH RESPECT TO FOREIGN ENTITIES.—

Unless it is otherwise established to the satisfaction of the Secretary, it shall be presumed that the partners of a foreign partnership (and the beneficiaries of any other foreign pass-thru entity) are persons who are not United States persons. "(9) TREATMENT OF PROPERTY OWNED BY PARTNERSHIPS, ETC.—

Post, p. 589.

"(A) IN GENERAL.—For purposes of this subsection and paragraphs (4) and (5) of section 48(a), if— "(i) any property which (but for this subparagraph) is not tax-exempt use property is owned by a partnership which has both a tax-exempt entity and a person who is not a tax-exempt entity as partners, and "(ii) any allocation to the tax-exempt entity of partnership items is not a qualified allocation, an amount equal to such tax-exempt entity's proportionate share of such property shall (except as provided in paragraph (3)(D)) be treated as tax-exempt use property. "(B) QuAUFiED ALLOCATION.—For purposes of subparagraph (A), the term 'qualified allocation' means any allocation to a tax-exempt entity which— "(i) is consistent with such entity's being allocated the same distributive share of each item of income, gain, loss deduction, credit, and basis and such share remains the same during the entire period the entity is a partner in the partnership, and "(ii) has substantial economic effect within the meaning of section 704(b)(2). For purposes of this subparagraph, items allocated under section 704(c) shall not be taken into account. "(C) DETERMINATION OF PROPORTIONATE SHARE.—

"(i) IN GENERAL.—For purposes of subparagraph (A), a tax-exempt entity's proportionate share of any property owned by a partnership shall be determined on the basis of such entity's share of partnership items of income or gain (excluding gain allocated under section 704(c)), whichever results in the largest proportionate share. "(ii) DETERMINATION WHERE ALLOCATIONS VARY.—For

purposes of clause (i), if a tax-exempt entity's share of partnership items of income or gain (excluding gain allocated under section 704(c)) may vary during the period such entity is a partner in the partnership, such

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Page:United States Statutes at Large Volume 98 Part 1.djvu/565

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 517

share shall be the highest share such entity may receive. "(D) OTHER PASS-THRU ENTITIES; TIERED ENTITIES.—Rules

similar to the rules of subparagraphs (A), (B), and (C) shall also apply in the case of any pass-thru entity other than a partnership and in the case of tiered partnerships and other entities. "(E) REGULATIONS.—For purposes of determining whether there is a qualified allocation under subparagraph (B), the regulations prescribed under paragraph (10) for purposes of this paragraph— "(i) shall set forth the proper treatment for partnership guaranteed payments, and "(ii) may provide for the exclusion or segregation of items. "(10) REGULATIONS.—The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this subsection." Ob) DENIAL OF INVESTMENT TAX CREDIT FOR PROPERTY USED BY FOREIGN GOVERNMENTS AND OTHER FOREIGN PERSONS.—Paragraph

(5) of section 48(a) (relating to property used by governmental units) is amended to read as follows: "(5) PROPERTY USED BY GOVERNMENTAL UNITS OR FOREIGN PERSONS OR ENTITIES.—

^"

26 USC 48. ,, >

"(A) IN GENERAL.—Property used— "(i) by the United States, any State or political subdivision thereof, any possession of the United States, or any agency or instrumentality of any of the foregoing, or "(ii) by any foreign person or entity (as defined in section 168(j)(4)(C)), but only with respect to property to Ante, p. 509. which section 168(j)(4)(A)(iii) applies (determined after the application of section 168(j)(4)(B)), r shall not be treated as section 38 property. "(B) EXCEPTION FOR SHORT-TERM LEASES.—
 * K c *jh.i\

"(i) IN GENERAL.—This paragraph and paragraph (4) shall not apply to any property by reason of use under a lease with a term of less than 6 months (determined under section 168(j)(6)). "(ii) EXCEPTION FOR CERTAIN OIL DRILLING PROPERTY

^

AND CERTAIN CONTAINERS.—For purposes of this paragraph and paragraph (4), clause (i) shall be applied by substituting the lease term limitation in section 168(j)(3)(C)(ii) for the lease term limitation in clause (i) in the case of property which is leased to a foreign person or entity and— "(I) which is used in offshore drilling for oil and gas (including drilling vessels, barges, platforms, and drilling equipment) and support vessels with respect to such property, or "(II) which is a container described in section 48(a)(2)(B)(v) (without regard to whether such container is used outside the United States) or container chassis or trailer but only if such container, chassis, or trailer has a present class life of not more than 6 years, "(iii) EXCEPTION FOR CERTAIN AIRCRAFT.—

' > >C;L ^;S

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Page:United States Statutes at Large Volume 98 Part 1.djvu/566

 98 STAT. 518

PUBLIC LAW 98-369—JULY 18, 1984 "(I) IN GENERAL.—In the case of any aircraft used under a qualifying lease (as defined in section 47(a)(7)(C)) and which is leased to a foreign person or entity before January 1, 1990, clause (i) shall be applied by substituting '3 years' for '6 months'. "(II) RECAPTURE PERIOD EXTENDED.—For purposes of applying subparagraph (B) of section 47(a)(5) and paragraph (1) of section 47(a), there shall not be taken into account any period of a lease to which subclause (I) applies. "(C) EXCEPTION FOR QUALIFIED REHABILITATED BUILDINGS

LEASED TO GOVERNMENTS, ETC.—If any qualified rehabilitated building is leased to a governmental unit (or a foreign person or entity), this paragraph shall not apply to that portion of the basis of such building which is attributable to qualified rehabilitation expenditures. "(D) CROSS REFERENCE.— Ante, p. 509.

"For provisions providing special rules for the application of this paragraph and paragraph (4), see section 168(j)." (c) REHABILITATION CREDIT NOT TO APPLY WHERE PROPERTY USED B TAX-EXEMPT ENTITY.— Y

26 USC 48.

(1) IN GENERAL.—Subparagraph (B) of section 48(g)(2) (relating to certain expenditures not treated as qualified rehabilitation expenditures) is amended by adding at the end thereof the following new clause: "(vi) TAX-EXEMPT USE PROPERTY.—

Ante, p. 509.

"(I) IN GENERAL.—Any expenditure in connection with the rehabilitation of a building which is allocable to that portion of such building which is (or may reasonably be expected to be) tax-exempt use property (within the meaning of section 168(j)(3)). "(II) CLAUSE NOT TO APPLY FOR PURPOSES OF PARA-

GRAPH (i)(c).—This clause shall not apply for purposes of determining under paragraph (I)(C) whether a building has been substantially rehabilitated." (2) TECHNICAL AMENDMENT.—Clause (i) of section 48(g)(2)(B) is amended by adding at the end thereof the following new sentence: "The preceding sentence shall not apply to any expenditure to the extent subsection (f)(12) or (j) of section 168 applies to such expenditure." (d) AUTHORITY TO PRESCRIBE PRESENT CLASS LIFE FOR CERTAIN

26 USC 168.

PROPERTY.—Paragraph (2) of section 168(g) (defining present class life) is amended by adding at the end thereof the following new sentence: "If any property (other than section 1250 class property) does not have a present class life within the meaning of the preceding sentence, the Secretary may prescribe a present class life for such property which reasonably reflects the anticipated useful life of such property to the industry or other group."

26 USC 7701. Post, p. 672.

ETC.—Section 7701 (relating to definitions), as amended by this Act, is amended by redesignating subsection (e) as subsection (f) and by inserting after subsection (d) the following new subsection:

26 USC 1 et seq.

ETC.—For purposes of chapter 1—

(e) TREATMENT OF CERTAIN CONTRACTS FOR PROVIDING SERVICES,

"(e) TREATMENT OF CERTAIN CONTRACTS FOR PROVIDING SERVICES,

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text:
Page:The Yellow Book - 06.djvu/297

 arches. Huge pike quivered on the muddy bed, crayfish moved sluggishly amongst the weeds.

There was an island in the middle, where a leaden Diana, more compassionate than a crocodile, caressed Actæon s horns ere delivering him to his hounds. The huntress head and shoulders were white with the excrement of a crowd of culvers that moved as if entangled in a snare.

Northwards an avenue rose for the space of a mile, to fall abruptly before an azure sky. For many years the yew-mast on the pathway had been undisturbed by human foot; it was covered with a crust of greenish lichen.

My Master pressed my fingers. "There is some evil in the air of this place," he said. "I am strong, but you—you may not endure. We will return."

"'Tis an enchanted country," I made answer, feverishly. "At the end of yonder avenue stands the palace of the sleeping maiden who awaits the kiss. Nay, since we have pierced the country thus far, let us not draw back. You are strong, Master—no evil can touch us."

So we fared to the place where the avenue sank, and then our eyes fell on the wondrous sight of a palace, lying in a concave pleasaunce, all treeless, but so bestarred with fainting flowers, that neither blade of grass nor grain of earth was visible.

Then came a rustling of wings above our heads, and looking skywards I saw flying towards the house a flock of culvers like unto those that had drawn themselves over Diana s head. The hindmost bird dropped its neck, and behold it gazed upon us with the face of a mannikin!

"They are charmed birds, made thus by the whim of the Princess," I said.

As the birds passed through the portals of a columbary that crowned

title: Page:The Yellow Book - 06.djvu/297


text:
Page:United States Statutes at Large Volume 98 Part 1.djvu/567

 PUBLIC LAW 98-369—JULY 18, 1984 "(1) IN GENERAL.—A contract which purports to be a service contract shall be treated as a lease of property if such contract is properly treated as a lease of property, taking into account all relevant factors including whether or not— "(A) the service recipient is in physical possession of the property, "(B) the service recipient controls the property, "(C) the service recipient has a significant economic or possessory interest in the property, "(D) the service provider does not bear any risk of substantially diminished receipts or substantially increased expenditures if there is nonperformance under the contract, "(E) the service provider does not use the property concurrently to provide significant services to entities unrelated to the service recipient, and "(F) the total contract price does not substantially exceed the rental value of the property for the contract period. "(2) OTHER ARRANGEMENTS.—An arrangement (including a

partnership or other pass-thru entity) which is not described in paragraph (1) shall be treated as a lease if such arrangement is properly treated as a lease, taking into account all relevant factors including factors similar to those set forth in paragraph (1). "(3) SPECIAL RULES FOR CONTRACTS OR ARRANGEMENTS INVOLVING SOLID WASTE DISPOSAL, ENERGY, AND CLEAN WATER FACILITIES.—

"(A) IN GENERAL.—Notwithstanding paragraphs (1) and (2), and except as provided in paragraph (4), any contract or arrangement between a service provider and a service re' cipient— "(i) with respect to— "(I) the operation of a qualified solid waste disposal facility, .'!!.. i jc "(ij) the sale to the service recipient of electrical or thermal energy produced at a cogeneration or i^AF; *' alternative energy facility, or "(III) the operation of a water treatment works • facility, and "(ii) which purports to be a service contract, shall be treated as a service contract. "(B) QUALIFIED SOLID WASTE DISPOSAL FACILITY.—For purposes of subparagraph (A), the term 'qualified solid waste disposal facility' means any facility if such facility provides solid waste disposal services for residents of part or all of 1 or more governmental units and substantially all of the solid waste processed at such facility is collected from the general public. "(C) COGENERATION FACILITY.—For purposes of subpara-

graph (A), the term 'cogeneration facility means a facility which uses the same energy source for the sequential generation of electrical or mechanical power in combination with steam, heat, or other forms of useful energy. "(D) ALTERNATIVE ENERGY FACILITY.—For purposes of subparagraph (A), the term 'alternative energy facility' means a facility for producing electrical or thermal energy if the

98 STAT. 519

J:

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Page:United States Statutes at Large Volume 98 Part 1.djvu/568

 98 STAT. 520

PUBLIC LAW 98-369—JULY 18, 1984 primary energy source for the facility is not oil, natural gas, coal, or nuclear power. "(E) WATER TREATMENT WORKS FACILITY.—For purposes of subparagraph (A), the term 'water treatment works facility' means any treatment works within the meaning of section 212(2) of the Federal Water Pollution Control Act.

33 USC 1292.

"(4) PARAGRAPH (3) NOT TO APPLY IN CERTAIN CASES.—

i I

^ '

"(A) IN GENERAL.—Paragraph (3) shall not apply to any qualified solid waste disposal facility, cogeneration facility, alternative energy facility, or water treatment works facility used under a contract or arrangement if^ "(i) the service recipient (or a related entity) operates such facility, "(ii) the service recipient (or a related entity) bears s-^i ij;:, any significant financial burden if there is nonperformance under the contract or arrangement (other than for reasons beyond the control of the service provider), "(iii) the service recipient (or a related entity) receives any significant financial benefit if the operating costs of such facility are less than the standards of performance or operation under the contract or arrangement, or "(iv) the service recipient (or a related entity) has an option to purchase, or may be required to purchase, all or a part of such facility at a fixed and determinable jj' price (other than for fair market value). "(B) SPECIAL RULES FOR APPLICATION OF SUBPARAGRAPH

(A) WITH RESPECT TO CERTAIN RIGHTS AND ALLOCATIONS UNDER THE CONTRACT.—For purposes of subparagraph (A), ^•^ there shall not be taken into account— "(i) any right of a service recipient to inspect any facility, to exercise any sovereign power the service .»"lTi,' recipient may possess, or to act in the event of a breach of contract by the service provider, or r "(ii) any allocation of any financial burden or benefits in the event of any change in any law. "(C)

SPECIAL RULES FOR APPLICATION OF SUBPARAGRAPH

f. 7r V J <A) IN THE CASE OF CERTAIN E V E N T S. —

Post, p. 682.

"(i) TEMPORARY SHUT-DOWNS, ETC.—For purposes of clause (ii) of subparagraph (A), there shall not be taken into account any temporary shut-down of the facility for repairs, maintenance, or capital improvements, or any financial burden caused by the bankruptcy or similar financial difficulty of the service provider. "(ii) REDUCED COSTS.—For purposes of clause (iii) of subparagraph (A), there shall not be taken into account any significant financial benefit merely because payments by the service recipient under the contract or arrangement are decreased by reason of increased production or efficiency or the recovery of energy or other products. "(5) EXCEPTION FOR CERTAIN LOW-INCOME HOUSING.—This subsection shall not apply to any low-income housing (within the meaning of section 168(C)(2)(F)) if— "(A) such property is operated by or for an organization described in paragraph (3) or (4) of section 501(c), and

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Page:United States Statutes at Large Volume 98 Part 1.djvu/569

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 521

"(B) at least 80 percent of the units in such property are leased to low-income tenants (within the meaning of section 167(k)(3)(B)). "(6) REGULATIONS.—The Secretary may prescribe such regulations as may be necessary or appropriate to carry out the provisions of this subsection." (f) INVESTMENT TAX CREDIT FOR PROPERTY LEASED BY CERTAIN PERSONS NOT TO EXCEED CREDIT ALLOWED IF SUCH PERSONS OWNED

PROPERTY.—Section 46(e) (relating to limitations with respect to 26 USC 46. certain persons) is amended by adding at the end thereof the following new paragraph: "(4) SPECIAL RULES WHERE SECTION 593 ORGANIZATION IS

"(A) IN GENERAL.—For purposes of paragraph (1)(A), if an organization described in section 593 is the lessee of any section 38 property, the lessor of such property shall be treated as an organization described in section 593 with respect to such property. "(B) EXCEPTION FOR SHORT-TERM LEASES.—This paragraph

shall not apply to any property by reason of use under a lease with a term of less than 6 months (determined under s e c t i o n 168(j)(6)). "(C) ELECTION NOT TO HAVE SUBPARAGRAPH (A) APPLY.—

Ante, p. 509.

Subparagraph (A) shall not apply for any taxable year to an organization described in section 593 if such organization elects to compute for such year and all subsequent taxable years the amount of the deduction for a reasonable addition to a reserve for bad debts on the basis of actual experience. Any such election shall apply to any successor organization engaged in substantially similar activities and, once made, shall be irrevocable." (g) EFFECTIVE DATES.— 26 USC 168 note. (1) IN GENERAL.—Except as otherwise provided in this subsection, the amendments made by this section shall apply— (A) to property placed in service by the taxpayer after May 23, 1983, in taxable years ending after such date, and (B) to property placed in service by the taxpayer on or before May 23, 1983, if the lease to the tax-exempt entity is entered into after May 23, 1983. (2) LEASES ENTERED INTO ON OR BEFORE MAY 23, 1983.—The

amendments made by this section shall not apply with respect to any property leased to a tax-exempt entity if the property is leased pursuant to— (A) a lease entered into on or before May 23, 1983 (or a sublease under such a lease), or (B) any renewal or extension of a lease entered into on or before May 23, 1983, if such renewal or extension is pursuant to an option exercisable by the tax-exempt entity which was held by the tax-exempt entity on May 23, 1983. (3) BINDING CONTRACTS, ETC.—

(A) The amendments made by this section shall not apply with respect to any property leased to a tax-exempt entity if such lease is pursuant to 1 or more written binding contracts which, on May 23, 1983, and at all times thereafter, required—

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Page:United States Statutes at Large Volume 98 Part 1.djvu/570

 98 STAT. 522

PUBLIC LAW 98-369—JULY 18, 1984

(i) the taxpayer (or his predecessor in interest under the contract) to acquire, construct, reconstruct, or rehabilitate such property, and (ii) the tax-exempt entity (or a tax-exempt predecessor thereof) to be the lessee of such property. (B) The amendments made by this section shall not apply with respect to any property owned by a partnership if— (i) such property was acquired by such partnership M, on or before October 21, 1983, or (ii) such partnership entered into a written binding contract which, on October 21, 1983, and at all times m i^/ thereafter, required the partnership to acquire or construct such property. (C) The amendments made by this section shall not apply with respect to any property leased to a tax-exempt entity (other than any foreign person or entity)— ^riv,,. (pif^ (I) on or before May 23, 1983, the taxpayer (or his predecessor in interest under the contract) or the, tax-exempt entity entered into a written binding contract to acquire, construct, reconstruct, or reha(iO?, Q AJv bilitate such property and such property had not previously been used by the tax-exempt entity, or (II) the taxpayer or the tax-exempt entity acquired the property after June 30, 1982, and on or before May 23, 1983, or completed the construction, reconstruction, or rehabilitation of the property after December 31, 1982, and on or before May 23, 1983, and (ii) if such lease is pursuant to a written binding contract entered into before January 1, 1985, which ,., „ requires the tax-exempt entity to be the lessee of such property. f

(4) OFFICIAL GOVERNMENTAL ACTION ON OR BEFORE NOVEMBER 1, 1983.—

(A) IN GENERAL.—The amendments made by this section shall not apply with respect to any property leased to a taxexempt entity (other than the United States, any agency or instrumentality thereof, or any foreign person or entity) -^'"'

^ '5

(i) on or before November 1, 1983, there was significant official governmental action with respect to the project or its design, and (ii) the lease to the tax-exempt entity is pursuant to a written binding contract entered into before January 1, 1985, which requires the tax-exempt entity to be the lessee of the property. (B) SIGNIFICANT OFFICIAL GOVERNMENTAL ACTION.—For

i'

purposes of subparagraph (A), the term "significant official governmental action" does not include granting of permits, zoning changes, environmental impact statements, or similar governmental actions. (5) MASS COMMUTING VEHICLES.—The amendments made by this section shall not apply to any qualified mass commuting vehicle (as defined in section 103(b)(9) of the Internal Revenue Code of 1954) which is financed in whole or in part by obliga-

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Page:United States Statutes at Large Volume 98 Part 1.djvu/571

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 523

tions the interest on which is excludable from gross income under section 103(a) of such Code if— (A) such vehicle is placed in service before January 1, 1988, or ^^ (B) such vehicle is placed in service on or after such L.^.. date— (i) pursuant to a binding contract or commitment •itm] entered into before April 1, 1983, and (ii) solely because of conditions which, as determined by the Secretary of the Treasury or his delegate, are not within the control of the lessor or lessee. (6) CERTAIN TURBINES AND BOILERS.—The amendments made by this section shall not apply to any property described in J section 208(d)(3)(E) of the Tax Equity and Fiscal Responsibility Act of 1982. 96 Stat. 439. (7) CERTAIN FACILITIES FOR WHICH RULING REQUESTS FILED ON

OR BEFORE MAY 23, 1983.—The amendments made by this section shall not apply with respect to any facilities described in clause (ii) of section 168(f)(12)(C) of the Internal Revenue Code of 1954 (relating to certain sewage or solid waste disposal facilities), as in effect on the day before the date of the enactment of this Act, if a ruling request with respect to the lease of such facility to the tax-exempt entity was filed with the Internal Revenue Service on or before May 23, 1983. (8) RECOVERY FACILITIES.—

PERIOD

FOR

CERTAIN

QUALIFIED

.,. •'• "*

SEWAGE

(A) IN GENERAL.—In the case of any property (other than 15-year real property) which is part of a qualified sewage facility, the recovery period used for purposes of paragraph (1) of section 168(j) of the Internal Revenue Code of 1954 (as Ante, p. 509. added by this section) shall be 12 years. For purposes of the preceding sentence, the term "15-year real property" includes 18-year real property. (B) QUALIFIED SEWAGE FACILITY.—For purposes of subparagraph (A), the term "qualified sewage facility" means any facility which is part of the sewer system of a city, if— (i) on June 15, 1983, the City Council approved a resolution under which the city authorized the procure'^' ment of equity investments for such facility, and ^ ^ ^ (ii) on July 12, 1983, the Industrial Development •* *"' "" Board of the city approved a resolution to issue a $100,000,000 industrial development bond issue to provide funds to purchase such facility. (9) PROPERTY USED BY THE POSTAL SERVICE.—In the case of property used by the United States Postal Service, paragraphs (1) and (2) shall be applied by substituting "October 31" for "May 23". (10) EXISTING APPROPRIATIONS.—The amendments made by this section shall not apply to personal property leased to or used by the United States if^ (A) an express appropriation has been made for rentals under such lease for the fiscal year 1983 before May 23, 1983, and (B) the United States or an agency or instrumentality thereof has not provided an indemnification against the loss of all or a portion of the tax benefits claimed under the lease or service contract.

�


text:
Page:United States Statutes at Large Volume 98 Part 1.djvu/572

 98 STAT. 524

PUBLIC LAW 98-369—JULY 18, 1984 ^„^,.

(11) SPECIAL RULE FOR CERTAIN PARTNERSHIPS.— (A) PARTNERSHIPS FOR WHICH QUALIFYiNG ACTION

EXISTED BEFORE OCTOBER 21, 1983.—Paragraph (9) of section 168(j) of the Internal Revenue Code of 1954 (as added by this section) shall not apply to any property acquired, directly or indirectly, before January 1, 1985, by any partnership described in subparagraph (B). (B) APPLICATION FILED BEFORE OCTOBER 21, 1983.—A partnership is described in this subparagraph if— (i) before October 21, 1983, the partnership was organized, a request for exemption with respect to such partnership was filed with the Department of Labor, and a private placement memorandum stating the maximum number of units in the partnership that would be offered had been circulated, (ii) the interest in the property to be acquired, directly or indirectly (including through acquiring an interest in another partnership) by such partnership was described in such private placement memorandum, and (iii) the marketing of partnership units in such partnership is completed not later than two years after the .^ jg^^gj. Qf ^j^g jjg^^g Qf ^j^g enactment of this Act or the date of publication in the Federal Register of such r*'?/;w."exemption by the Department of Labor and the aggregate number of units in such partnership sold does not exceed the amount described in clause (i). r

Ante, p. 509.

Mt- Jf;.' V

Federal Register, publication.

(C) PARTNERSHIPS FOR WHICH QUALIFYING ACTION EXISTED

BEFORE MARCH 6, 1984.—Paragraph (9) of section 168(j) of

Ante, p. 509.

'"''* ^^

gf.,,,.

the Internal Revenue Code of 1954 (as added by this section) shall not apply to any property acquired directly or indirectly, before January 1, 1986, by any partnership described in subparagraph (D). For purposes of this subparagraph, property shall be deemed to have been acquired prior to January 1, 1986, if the partnership had entered into a written binding contract to acquire such property prior to January 1, 1986 and the closing of such contract takes place within 6 months of the date of such contract (24 months in the case of new construction). (D) PARTNERSHIP ORGANIZED BEFORE MARCH 6, 1984.—A partnership is described in this subparagraph if— (i) before March 6, 1984, the partnership was organized and publicly announced the maximum amount (as shown in the registration statement, prospectus or partnership agreement, whichever is greater) of interests which would be sold in the partnership, and (ii) the marketing or partnership interests in such partnership was completed not later than the 90th day after the date of the enactment of this Act and the aggregate amount of interest in such partnership sold does not exceed the maximum amount described in clause (i). (12)

SPECIAL RULE

FOR AMENDMENT MADE

BY SUBSECTION

(c)(2).—The amendment made by subsection (c)(2) to the extent it relates to subsection (f)(12) of section 168 of the Internal Revenue Code of 1954 shall take effect as if it had been included

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Page:United States Statutes at Large Volume 98 Part 1.djvu/573

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 525

in the amendments made by section 216(a) of the Tax Equity and Fiscal Responsibility Act of 1982.

96 Stat. 470.

(13) SPECIAL RULE FOR SERVICE CONTRACTS NOT INVOLVING TAXEXEMPT ENTITIES.—In the case of a service contract or other

arrangement described in section 7701(e) of the Internal Revenue Code of 1954 (as added by this section) with respect to which no party is a tax-exempt entity, such section 7701(e) shall not apply to— (A) such contract or other arrangement if such contract or other arrangement was entered into before November 5, 1983, or (B) any renewal or other extension of such contract or other arrangement pursuant to an option contained in such contract or other arrangement on November 5, 1983.

Ante, p. 518.

(14) PROPERTY LEASED TO SECTION 593 ORGANIZATIONS.—For

purposes of the amendment made by subsection (f), paragraphs (1), (2), and (4) shall be applied by substituting— (A) "November 5, 1983" for "May 23, 1983" and "November 1, 1983", as the case may be, and (B) "organization described in section 593 of the Internal Revenue Code of 1954" for "tax-exempt entity". (15) SPECIAL ENTITIES—

RULES

RELATING

TO

FOREIGN

PERSONS OR

(A) IN GENERAL.—In the case of tax-exempt use property which is used by a foreign person or entity, the amendments made by this section shall not apply to any property which— (i) is placed in service by the taxpayer before January 1, 1984, and (ii) is used by such foreign person or entity pursuant to a lease entered into before January 1, 1984. (B) SPECIAL RULE FOR SUBLEASES.—If tax-exempt use property is being used by a foreign person or entity pursuant to a sublease under a lease described in subparagraph (A)(ii), subparagraph (A) shall apply to such property only if such property was used before January 1, 1984, by any foreign person or entity pursuant to such lease. (C) BINDING CONTRACTS, ETC.—The amendments made by this section shall not apply with respect to any property (other than aircraft described in subparagraph (D)) leased to a foreign person or entity— (i) i f (I) on or before May 23, 1983, the taxpayer (or a predecessor in interest under the contract) or the foreign person or entity entered into a written binding contract to acquire, construct, or rehabilitate such property and such property had not previously been used by the foreign person or entity, or (II) the taxpayer or the foreign person or entity acquired the property or completed the construction, reconstruction, or rehabilitation of the property after December 31, 1982 and on or before May 23, 1983, and (ii) if such lease is pursuant to a written binding contract entered into before January 1, 1984, which

^ ^ '

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Page:United States Statutes at Large Volume 98 Part 1.djvu/574

 98 STAT. 526

PUBLIC LAW 98-369—JULY 18, 1984 ^itupH

.O'^i.teja "rt^

>i^ q "*':,! %

requires the foreign person or entity to be the lessee of such property. (D) CERTAIN AIRCRAFT.—The amendments made by this section shall not apply with respect to any wide-body, fourengine, commercial aircraft used by a foreign person or entity if— (i) on or before November 1, 1983, the foreign person or entity entered into a written binding contract to > acquire such aircraft, and (ii) such aircraft is placed in service before January 1, 1986. (E) U S E AFTER

1983.—Qualified

container

equipment

placed in service before January 1, 1984, which is used before such date by a foreign person shall not, for purposes of section 47 of the Internal Revenue Code of 1954, be treated as ceasing to be section 38 property by reason of the use of such equipment before January 1, 1985, by a foreign person or entity. For purposes of this subparagraph, the term "qualified container equipment" means any container, container chassis, or container trailer of a United States person with a present class life of not more than 6 years.

,,

(16) ORGANIZATIONS E L E C T I N G E X E M P T I O N F R O M RULES R E L A T -

I N G TO PREVIOUSLY TAX-EXEMPT ORGANIZATIONS MUST ELECT TAXATION OF EXEMPT ARBITRAGE PROFITS.—

Ante, p. 509.

^ '®' tiif

(A) IN GENERAL.—An organization may make the election under section 168(j)(4)(E)(ii) of the Internal Revenue Code of 1954 (relating to election not to have rules relating to previously tax-exempt organizations apply) only if such organization elects the tax treatment of exempt arbitrage profits described in subparagraph (B). (B) TAXATION OF EXEMPT ARBITRAGE PROFITS.—

(i) IN GENERAL.—In the case of an organization which elects the application of this subparagraph, there is hereby imposed a tax on the exempt arbitrage profits of such organization. (ii) RATE OF TAX, ETC.—The tax imposed by clause

(i)(I) shall be the amount of tax which would be imposed by section 11 of such Code if the exempt arbitrage profits were taxable income (and there were no other taxable income), and (II) shall be imposed for the first taxable year of the tax-exempt use period (as defined in section 168(j)(4)(E)(ii) of such Code). (C) EXEMPT ARBITRAGE PROFITS.—

Post, p. 922. '::

(i) IN GENERAL.—For purposes of this paragraph, the term exempt arbitrage profits means the aggregate amount described in clauses (i) and (ii) of subparagraph (D) of section 103(c)(6) of such Code for all taxable years for which the organization was exempt from tax under section 501(a) of such Code with respect to obligations— (I) associated with property described in section 168(j)(4)(E)(i)(I), and (II) issued before January 1, 1985. (ii) APPLICATION OF SECTION IO3 (B)(6).—For purposes

of this paragraph, section 103(b)(6) of such Code shall

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Page:United States Statutes at Large Volume 98 Part 1.djvu/575

 PUBLIC LAW 98-369—JULY 18, 1984 yj si a

98 STAT. 527

apply to obligations issued before January 1, 1985, but the amount described in clauses (i) and (ii) of subparagraph (D) thereof shall be determined without regard to clauses (i)(II) and (ii) of subparagraph (F) thereof. (D) OTHER LAWS APPLICABLE.—

(i) IN GENERAL.—Except as provided in clause (ii), all provisions of law, including penalties, applicable with ' ' respect to the tax imposed by section 11 of such Code shall apply with respect to the tax imposed by this ^- ' * paragraph. (ii) No CREDITS AGAINST TAX, ETC.—The tax imposed by this paragraph shall not be treated as imposed by section 11 of such Code for purposes of— '^ '• (I) part VI of subchapter A of chapter 1 of such Code (relating to minimum tax for tax preferences), and (II) determining the amount of any credit allowable under subpart A of part IV of such sub; -. ^ chapter. M. - , (E) ELECTION.—Any election under subparagraph (A)— (i) shall be made at such time and in such manner as the Secretary may prescribe, 1„,, (ii) shall apply to any successor organization which is engaged in substantially similar activities, and (iii) once made, shall be irrevocable. (17) CERTAIN TRANSITIONAL LEASED PROPERTY.—The amendments made by this section shall not apply to property described in section 168(c)(2)(D) of the Internal Revenue Code of 1954, as in effect on the day before the date of the enactment of this Act, and which is described in any of the following subparagraphs: (A) Property is described in this subparagraph if such ^ property is leased to a university, and— (i) on June 16, 1983, the Board of Administrators of the university adopted a resolution approving the rehabilitation of the property in connection with an overall campus development program; and ' (ii) the property houses a basketball arena and university offices. (B) Property is described in this subparagraph if such property is leased to a charitable organization, and— (i) on August 21, 1981, the charitable organization "'^--'•acquired the property, with a view towards rehabilitatr<r-.: j. ing the property; and (ii) on June 12, 1982, an arson fire caused substantial r:-''- T. damage to the property, delaying the planned rehabilitation. (C) Property is described in this subparagraph if such property is leased to a corporation that is described in section 501(c)(3) of the Internal Revenue Code of 1954 (relating to organizations exempt from tax) pursuant to a contract— (i) which was entered into on August 3, 1983; and d » (ii) under which the corporation first occupied the property on December 22, 1983. (D) Property is described in this subparagraph if such ^ 1 property is leased to an educational institution for use as an Arts and Humanities Center and with respect to which—

26 USC 55.

26 USC 31.

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Page:United States Statutes at Large Volume 98 Part 1.djvu/576

 98 STAT. 528

PUBLIC LAW 98-369—JULY 18, 1984

,I':.''JPA;

.i..j

(i) in November 1982, an architect was engaged to design a planned renovation; (ii) in January 1983, the architectural plans were completed; (iii) in December 1983, a demolition contract was entered into; and (iv) in March 1984, a renovation contract was entered into. (E) Property is described in this subparagraph if such property is used by a college as a dormitory, and— (i) in October 1981, the college purchased the property with a view towards renovating the property; (ii) renovation plans were delayed because of a zoning dispute; and (iii) in May 1983, the court of highest jurisdiction in the State in which the college is located resolved the zoning dispute in favor of the college. (F) Property is described in this subparagraph if such property is a fraternity house related to a university with respect to which— (i) in August 1982, the university retained attorneys to advise the university regarding the rehabilitation of the property; (ii) on January 21, 1983, the governing body of the university established a committee to develop rehabilitation plans; (iii) on January 10, 1984, the governor of the state in which the university is located approved historic district designation for an area that includes the property; and (iv) on February 2, 1984, historic preservation certification applications for the property were filed with a historic landmarks commission. (G) Property is described in this subparagraph if such property is leased to a retirement community with respect to which— (i) on January 5, 1977, a certificate of incorporation was filed with the appropriate authority of the state in which the retirement community is located; and (ii) on November 22, 1983, the Board of Trustees adopted a resolution evidencing the intention to begin immediate construction of the property. (H) Property is described in this subparagraph if such property is used by a university, and— (i) in July 1982, the Board of Trustees of the university adopted a master plan for the financing of the property; and .. (ii) as of August 1, 1983, at least $60,000 in private expenditures had been expended in connection with the property. (I) Property is described in this subparagraph if such property is used by a university as a fine arts center and the Board of Trustees of such university authorized the sale-leaseback agreement with respect to such property on March 7, 1984.

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Page:United States Statutes at Large Volume 98 Part 1.djvu/577

 PUBLIC LAW 98-369—JULY 18, 1984 (J) Property is described in this subparagraph if such property is used by a tax-exempt entity as an international trade center, and (i) prior to 1982, an environmental impact study for such property was completed; (ii) on June 24, 1981, a developer made a written commitment to provide one-third of the financing for the development of such property; and (iii) on October 20, 1983, such developer was approved by the Board of Directors of the tax-exempt entity. (K) Property is described in this subparagraph if such property is used by university of osteopathic medicine and health sciences, and on or before December 31, 1983, the Board of Trustees of such university approved the construction of such property. (L) Property is described in this subparagraph if such property is used by a tax-exempt entity, and— (i) such use is pursuant to a lease with a taxpayer which placed substantial improvements in service; (ii) on May 23, 1983, there existed architectural plans and specifications (within the meaning of sec. 48(g)(l)(C)(ii) of the Internal Revenue Code of 1954); and (iii) prior to May 23, 1983, at least 10 percent of the total cost of such improvements was actually paid or incurred. (M) Property is described in this subparagraph if such property is used as a convention center and on June 2, 1983, the City Council of the city in which the center is located provided for over $6 million for the project. (18)

98 STAT. 529

fO.; a ^%s^i-,

.nm'ji.^j i-

ML IBU iS

SPECIAL RULE FOR AMENDMENT MADE BY SUBSECTION

(c)(1).— (A) IN GENERAL.—The amendment made by subsection (c)(1) shall not apply to property— (i) leased by the taxpayer on or before November 1, 1983, or (ii) leased by the taxpayer after November 1, 1983, if on or before such date the taxpayer entered into a written binding contract requiring the taxpayer to lease such property. (B) LIMITATION.—Subparagraph (A) shall apply to the amendment made by subsection (c)(1) only to the extent such amendment relates to property described in subclause (II), (III), or (IV) of section 168(j)(3)(B)(ii) of the Internal Revenue Code of 1954 (as added by this section). (19) SPECIAL CONTRACTS.—

RULE

FOR

CERTAIN

ENERGY

MANAGEMENT

(A) IN GENERAL.—The amendments made by subsection (e) shall not apply to property used pursuant to an energy management contract that was entered into prior to May 1, 1984. (B) DEFINITION OF ENERGY MANAGEMENT CONTRACT.—For

purposes of subparagraph (A), the term "energy management contract" means a contract for the providing of energy conservation or energy management services. (20) DEFINITIONS.—For purposes of this subsection— (A) TAX-EXEMPT ENTITY.—The term "tax-exempt entity" has the same meaning as when used in section 168(j) of the

31-194 0 - 86 - 19: OL

3 Part 1

Ante, p. 509.

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Page:United States Statutes at Large Volume 98 Part 1.djvu/578

 98 STAT. 530

PUBLIC LAW 98-369—JULY 18, 1984 Internal Revenue Code of 1954 (as added by this section), except that such term shall include any related entity (within the meaning of such section). (B) TREATMENT OF IMPROVEMENTS.—

(i) IN GENERAL.—For purposes of this subsection, an improvement to property shall not be treated as a separate property unless such improvement is a substantial improvement with respect to such property. (ii) SUBSTANTIAL IMPROVEMENT.—For

Ante, p. 509.

(D)

Ante, p. 518.

26 USC 168.

purposes

of

clause (i), the term "substantial improvement' has the meaning given such term by section 168(f)(1)(C) of such Code determined— (I) by substituting "20 percent" for "25 percent" in clause (ii) thereof, and (II) without regard to clause (iii) thereof. (C) FOREIGN PERSON OR ENTITY.—The term "foreign person or entity" has the meaning given to such term by subparagraph (C) of section 168(j)(4) of such Code (as added by this section). For purposes of this subparagraph and subparagraph (A), such subparagraph (C) shall be applied without regard to the last sentence thereof. LEASES

AND SUBLEASES.—The

determination

of

whether there is a lease or sublease to a tax-exempt entity shall take into account sections 168(j)(6)(A), 168(j)(8)(A), and 7701(e) of the Internal Revenue Code of 1954 (as added by this section). SEC. 32. MOTOR VEHICLE OPERATING LEASES. (a) IN GENERAL.—Section 168(f) (relating to special rules) is amended by adding at the end thereof the following new paragraph: "(13) MOTOR VEHICLE OPERATING LEASES.—

.€!u'; q,/i.K

"(A) IN GENERAL.—For purposes of this title, in the case of a qualified motor vehicle operating agreement which contains a terminal rental adjustment clause— "(i) such agreement shall be treated as a lease if (but for such terminal rental adjustment clause) such agreement would be treated as a lease under this title, and "(ii) the lessee shall not be treated as the owner of the property subject to an agreement during any period such agreement is in effect. "(B) QUALIFIED MOTOR VEHICLE OPERATING AGREEMENT DEFINED.—For purposes of this paragraph— "(i) IN GENERAL.—The term qualified motor vehicle operating agreement' means any agreement with respect to a motor vehicle (including a trailer) which meets the requirements of clauses (ii), (iii), and (iv) of this subparagraph. "(ii) MINIMUM LIABILITY OF LESSOR.—An agreement

meets the requirements of this clause if under such agreement the sum of— "(I) the amount the lessor is personally liable to repay, and (II) the net fair market value of the lessor's interest in any property pledged as security for property subject to the agreement, equals or exceeds all amounts borrowed to finance the acquisition of property subject to the agreement. There

dH ~ 0 f'CI-

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Page:United States Statutes at Large Volume 98 Part 1.djvu/579

 PUBLIC LAW 98-369—JULY 18, 1984

ys -re sie?

-irmBi Mo g|4

shall not be taken into account under subclause (II) any property pledged which is property subject to the agreement or property directly or indirectly financed by indebtedness secured by property subject to the agreement. "(iii) CERTIFICATION BY LESSEE; NOTICE OF TAX OWNERSHIP.—An agreement meets the requirements of this clause if such agreement contains a separate written statement separately signed by the lessee— "(I) under which the lessee certifies, under penalty of perjury, that it intends that more than 50 percent of the use of the property subject to such agreement is to be in a trade or business of the lessee, and "(II) which clearly and legibly states that the lessee has been advised that it will not be treated as the owner of the property subject to the agreement for Federal income tax purposes.

98 STAT. 531

rr ^ o j dk

"(iv) LESSOR MUST HAVE NO KNOWLEDGE THAT CERTIFICATION IS FALSE.—An agreement meets the require-

ments of this clause if the lessor does not know that the certification described in clause (iii)(I) is false. "(C) TERMINAL RENTAL ADJUSTMENT CLAUSE DEFINED.—

1 -iMJ V)

"(i^ I^ GENERAL.—For purposes of this paragraph, the term 'terminal rental adjustment clause' means a provision of an agreement which permits or requires the rental price to be adjusted upward or downward by reference to the amount realized by the lessor under the agreement upon sale or other disposition of such property. "(ii) SPECIAL RULE FOR LESSEE DEALERS.—The term 'terminal rental adjustment clause' also includes a provision of an agreement which requires a lessee who is a dealer in motor vehicles to purchase the motor vehicle for a predetermined price and then resell such vehicle where such provision achieves substantially the same results as a provision described in clause (i).' (b) TERMINATION OF SECTION 210.—Section 210(a) of the Tax Equity and Fiscal Responsibility Act of 1982 is amended by inserting "entered into on or before the 90th day after the date of the enactment of the Tax Reform Act of 1984" after "agreement" the first place it appears. (c) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply to agreements described in section 168(6(13) of the Internal Revenue Code of 1954 (as added by subsection (a)) entered into more than 90 days after the date of the enactment of this Act.

Subtitle C—Treatment of Bonds and Other Debt Instruments SEC. 41. TREATMENT OF BONDS AND OTHER DEBT INSTRUMENTS.

(a) GENERAL RULE.—Subchapter P of chapter 1 (relating to special rules for capital gains and losses) is amended by adding at the end thereof the following new part:

^^. q ^_,^^

26 USC 168 note.

26 USC 168 note.

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text:
Page:United States Statutes at Large Volume 98 Part 1.djvu/580

 98 STAT. 532

PUBLIC LAW 98-369—JULY 18, 1984 "PART V—SPECIAL RULES FOR BONDS AND OTHER DEBT INSTRUMENTS "Subpart "Subpart "Subpart "Subpart

A. Original issue discount. B. Market discount. C. Discount on short-term obligations. D. Miscellaneous provisions.

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"Subpart A—Original Issue Discount

I 26 USC 1271.

"Sec. 1271. Treatment of amounts received on retirement or sale or exchange of debt instruments. "Sec. 1272. Current inclusion in income of original issue discount. "Sec. 1273. Determination of amount of original issue discount. "Sec. 1274. Determination of issue price in the case of certain debt instruments issued for property. "Sec. 1275. Other definitions and special rules.

"SEC. 1271. TREATMENT OF AMOUNTS RECEIVED ON RETIREMENT OR SALE OR EXCHANGE OF DEBT INSTRUMENTS. "(a) GENERAL RULE.—For purposes of this title—

"(1) RETIREMENT.—Amounts received by the holder on retirement of any debt instrument shall be considered as amounts received in exchange therefor. "(2)

ORDINARY INCOME O N SALE OR EXCHANGE W H E R E I N T E N -

TION TO CALL BEFORE MATURITY.—

"(A) IN GENERAL.—If at the time of original issue there was an intention to call a debt instrument before maturity, any gain realized on the sale or exchange thereof which does not exceed an amount equal to— "(i) the original issue discount, reduced by "(ii) the portion of original issue discount previously includible in the gross income of any holder (without regard to subsection (a)(6) or (b)(4) of section 1272 (or the corresponding provisions of prior law)), shall be treated as ordinary income. "(B) EXCEPTIONS.—This paragraph (and paragraph (2) of subsection (c)) shall not apply to— "(i) any tax-exempt obligation, or "(ii) any holder who has purchased the debt instrument at a premium.

Post, p. 533.

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"(3) CERTAIN SHORT-TERM GOVERNMENT OBLIGATIONS.—

"(A) IN GENERAL.—On the sale or exchange of any shortterm Government obligation, any gain realized which does not exceed an amount equal to the ratable share of the acquisition discount shall be treated as ordinary income. "(B) SHORT-TERM GOVERNMENT OBLIGATION.—For purposes

i.

of this paragraph, the term 'short-term Government obligation' means any obligation of the United States or any of its possessions, or of a State or any political subdivision thereof, or of the District of Columbia which is— "(i) issued on a discount basis, and "(ii) payable without interest at a fixed maturity date not more than 1 year from the date of issue. Such term does not include any tax-exempt obligation. "(C) ACQUISITION DISCOUNT.—For purposes of this paragraph, the term 'acquisition discount' means the excess of

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title: Page:The Yellow Book - 06.djvu/292