Page:United States Statutes at Large Volume 100 Part 3.djvu/1047

 PUBLIC LAW 99-514—OCT. 22, 1986

100 STAT. 2855

struments (as defined in section 71(b)(2)) of the Internal Revenue Code of 1986 executed after December 31, 1986. "(B)

MODIFICATIONS OF INSTRUMENTS EXECUTED BEFORE

JANUARY 1, 1987.—The amendments made by paragraph (1) shall also apply to any divorce or separation instrument (as so defined) executed before January 1, 1987, but modified on or after such date if the modification expressly provides that the amendments made by paragraph (1) shall apply to such modification. (3) TRANSITIONAL RULE.—In the case of any instrument to which the amendment made by paragraph (1) does not apply, paragraph (2) of section 71(f) of the Internal Revenue C!ode of 1954 (as in effect on the day before the date of the enactment of this Act) shall apply only with respect to the first 3 postseparation years, (d) CLERICAL AMENDMENT.—Subparagraph (B) of section 71(c)(2) (relating to treatment of certain reductions related to contingency involving child) is amended by striking out "specified in paragraph (1)" and inserting in lieu thereof "specified in subparagraph (A)". SEC. 1844. AMENDMENTS RELATED TO SECTION 431 OF THE ACT.

(a)

DEFINITION

OF RELATED

PERSON.—Clause (v)

of

section

46(c)(8)(D) is amended by striking out "clause (i)" and inserting in lieu thereof "this subparagraph". (b) CLARIFICATION OF RECAPTURE.—

(1) Paragraph (1) of section 47(d) (relating to increases in nonqualified nonrecourse financing) is amended— (A) by striking out "reducing the qualified investment" and inserting in lieu thereof "reducing the credit base (as defined in section 48(c)(8)(C))", and (B) by adding at the end thereof the following new sentence: 'For purposes of determining the amount of credit subject to the early disposition or cessation rules of subsection (a), the net increase in the amount of the nonqualified nonrecourse financing with respect to the property shall be treated as reducing the property's credit base (and correspondingly reducing the qualified investment in the property) in the year in which the property was first placed in service." (2) Subparagraph (F) of section 47(d)(3) is hereby repealed. (3) Subparagraph (A) of section 46(c)(9) (relating to subsequent decreases in nonqualified nonrecourse financing with respect to property) is amended by striking out "additional qualified investment in" and inserting in lieu thereof "an increase in the credit base for". (4) Clause (i) of section 47(d)(3)(E) is amended by inserting before the semicolon at the end thereof the following: "reduced by the sum of the credit recapture amounts with respect to such property for all preceding taxable years". (5) Clause (i) of section 46(c)(9)(C) is amended by striking out "any increase in a taxpayer's qualified investment" and all that follows down through the period at the end thereof and inserting in lieu thereof the following: "any increase in a taxpayer's credit base for any property by reason of this paragraph shall be taken into account as if it were property placed in service by the taxpayer in the taxable year in which the property referred to in subparagraph (A) was first placed in service.'

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