Page:United States Statutes at Large Volume 100 Part 3.djvu/386

 100 STAT. 2194

PUBLIC LAW 99-514—OCT. 22, 1986 "(7) ACQUISITION OF BUILDING BEFORE END OF PRIOR COMPLIANCE PERIOD.—

"(A) IN GENERAL.—Under regulations prescribed by the Secretary, in the case of a building described in subparagraph (B) which is acquired by the taxpayer— "(i) paragraph (2)(B) shall not apply, but "(ii) the credit allowable by reason of subsection (a) to the taxpayer for any period after such acquisition shall be equal to the amount of credit which would have been allowable under sebsection (a) for such period to the prior owner referred to in subparagraph (B) had such owner not disposed of the building. "(B) DESCRIPTION OF BUILDING.—A building is described in

this subparagraph if— "(i) a credit was allowed by reason of subsection (a) to any prior owner of such building, and "(ii) the taxpayer acquired such building before the end of the compliance period for such building with respect to such prior owner (determined without regard to any disposition by such prior owner). "(e) REHABIUTATION EXPENDITURES TREATED AS SEPARATE N E W BUILDING.—

"(1) IN GENERAL.—Rehabilitation expenditures paid or incurred by the taxpayer with respect to any building shall be treated for purposes of this section as a separate new building. "(2) REHABIUTATION EXPENDITURES.—For purposes of paragraph (D— "(A) IN GENERAL.—The term 'rehabilitation expenditures' means amounts chargeable to captial account and incurred for property (or additions or improvements to property) of a character subject to the allowance for depreciation in connection with the rehabilitation of a building. "(B) COST OF ACQUISITION, ETC, NOT INCLUDED.—Such term does not include the cost of acquiring any building (or interest therein) or any amount not permitted to be taken into account under paragraph (3) or (4) of subsection (d). "(3) AVERAGE OF REHABIUTATION EXPENDITURES MUST BE $2,OOO OR MORE.—

"(A) IN GENERAL.—Paragraph (1) shall apply to rehabilitation expenditures with respect to any building only if the qualified basis attributable to such expenditures incurred during any 24-month period, when divided by the low-income units in the building, is $2,000 or more. "(B) DATE OF DETERMINATION.—The determination under

subparagraph (A) shall be made as of the close of the 1st taxable year in the credit period with respect to such expenditures, "(4) SPECIAL RULES.—For purposes of applying this section with respect to expenditures which are treated as a separate building by reason of this subsection— "(A) such expenditures shall be treated as placed in service at the close of the 24-month period referred to in paragraph (3)(A), and "(B) the applicable fraction under subsection (c)(1) shall be the applicable fraction for the building (without regard to paragraph (1)) with respect to which the expenditures were incurred.

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