Page:United States Statutes at Large Volume 100 Part 3.djvu/315

 PUBLIC LAW 99-514—OCT. 22, 1986 in >

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100 STAT. 2123

"(A) IN GENERAL.—Except as provided in regulations, if during any taxable year— "(i) the aggregate bases of property to which this section applies and which are placed in service during the last 3 months of the taxable year, exceed "(ii) 40 percent of the aggregate bases of property to which this section applies placed in service during such taxable year, the applicable convention for all property to which this section applies placed in service during such taxable year shall be the mid-quarter convention. «^g^ CERTAIN REAL PROPERTY NOT TAKEN INTO ACCOUNT.—

For purposes of subparagraph (A), nonresidential real property and residential rental property shall not be taken into account. "(4) DEFINITIONS.— "(A) HALF-YEAR CONVENTION.—The

half-year convention is a convention which treats all property placed in service during any taxable year (or disposed of during any taxable year) as placed in service (or disposed of) on the mid-point of such taxable year. "(B) MID-MONTH CONVENTION.—The mid-month convention is a convention which treats all property placed in service during any month (or disposed of during any month) as placed in service (or disposed of) on the mid-point of such month.

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"(C)

MID-QUARTER

CONVENTION.—The

mid-quarter


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convention is a convention which treats all property placed in service during any quarter of a taxable year (or disposed

« of during any quarter of a taxable year) as placed in service (or disposed of) on the mid-point of such quarter. i "(e) CLASSIFICATION OF PROPERTY.—For purposes of this section— "(1) IN GENERAL.—Except as otherwise provided in this subsection, property shall be classified under the following table: "Property shall be treated as: 3-year property 5-year property 7-year property i 10-year property 15-year property 20-year property

If such property has a class life (in years) of: 4 or less More than 4 but less than 10 10 or more but less than 16 16 or more but less than 20 20 or more but less than 25 25 or more.

"(2) RESIDENTIAL RENTAL OR NONRESIDENTIAL REAL PROPERTY.— "(A) RESIDENTIAL RENTAL PROPERTY.—The term 'residen-

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tial rental property' has the meaning given such term by section 167(j)(2)(B). "(B) NONRESIDENTIAL REAL PROPERTY.—The term 'nonresidential real property' means section 1250 property which is not— "(i) residential rental property, or "(ii) property with a class life of less than 27.5 years. "(3) CLASSIFICATION OF CERTAIN PROPERTY.—

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"(A) 3-YEAR PROPERTY.—The term '3-year property' includes—

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