Page:United States Statutes at Large Volume 100 Part 3.djvu/436

 100 STAT. 2244

PUBLIC LAW 99-514—OCT. 22, 1986 ing of personal property and the providing of services which are incidental to making real property available as living accommodations. "(ii) MINERAL PROPERTY.—The activity of holding real property shall not include the holding of mineral property."

"

(c) EFFECTIVE DATES.—

(1) IN GENERAL.—Except as provided in this subsection, the amendments made by this section shall apply to losses incurred after December 31, 1986, with respect to property placed in service by the taxpayer after December 31, 1986. (2) SPECIAL RULE FOR LOSSES OF S CORPORATION, PARTNERSHIP,

' ^'

J

OR PASS-THRU ENTITY.—In the case of an interest in an S corporation, a partnership, or other pass-thru entity acquired after December 31, 1986, the amendments made by this section shall apply to losses after December 31, 1986, which are attributable to property placed in service by the S corporation, partnership, or pass-thru entity on, before, or after January 1, 1986. (3) SPECIAL RULE FOR ATHLETIC STADIUM.—The amendments made by this section shall not apply to any losses incurred by a taxpayer with respect to the holding of a multi-use athletic stadium in Pittsburgh, Pennsylvania, which the taxpayer acquired in a sale for which a letter of understanding was entered into before April 16, 1986.

,;

Subtitle B—Interest Expense

SEC. 511. LIMITATIONS ON DEDUCTION FOR NONBUSINESS INTEREST.

(a) LIMITATION ON INVESTMENT INTEREST.—Subsection (d) of section 163 (relating to limitation on interest on investment indebtedness) is amended to read as follows: "(d) LIMITATION ON INVESTMENT INTEREST.—

"(1) IN GENERAL.—In the case of a taxpayer other than a •• * corporation, the amount allowed as a deduction under this chapter for investment interest for any taxable year shall not exceed the net investment income of the taxpayer for the taxable year. "(2) CARRYFORWARD OF DISALLOWED INTEREST.—The amount

not allowed as a deduction for any taxable year by reason of paragraph (1) shall be treated as investment interest paid or accrued by the taxpayer in the succeeding taxable year. "(3) INVESTMENT INTEREST.—For purposes of this subsection— mm "(A) IN GENERAL.—The term 'investment interest' means any interest allowable as a deduction under this chapter Bit? (determined without regard to paragraph (1)) which is paid or accrued on indebtedness incurred or continued to purchase or carry property held for investment. "(B) EXCEPTIONS.—The term 'investment interest' shall not include— "(i) any qualified residence interest (as defined in subsection (h)(3)), or "(ii) any interest which is taken into account under section 469 in computing income or loss from a passive '*-'0t|: < activity of the taxpayer. "(C) PERSONAL PROPERTY USED IN SHORT SALE.—For

- '-'^

pur-

poses of this paragraph, the term 'interest' includes any

�