Page:United States Statutes at Large Volume 100 Part 3.djvu/479

 PUBLIC LAW 99-514—OCT. 22, 1986 •'•'{

100 STAT. 2287

"(B) SPECIAL RULE WHERE ALLOCATION OF TAXES OR INTEREST REFLECT COST TO CORPORATION OF STOCKHOLDER'S

UNIT.— "(i) IN GENERAL.—If, for any taxable year— "(I) each dwelling unit owned or leased by a cooperative housing corporation is separately allocated a share of such corporation's real estate taxes described in subsection (a)(1) or a share of such corporation's interest described in subsection (a)(2), and "(II) such allocations reasonably reflect the cost to such corporation of such taxes, or of such interest, attributable to the tenant-stockholder's dwelling unit (and such unit's share of the common areas),

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the n the term 'tenant-stockholder's proportionate s h a r e ' means the s h a r e s determined in accordance with the allocations described in subclause (II).



"(ii) ELECTION BY CORPORATION REQUIRED.—Clause (i)

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shall apply with respect to any cooperative housing corporation only if such corporation elects its application. Such a n election, once made, may be revoked only with the consent of the Secretary."

(e) T R E A T M E N T OF A M O U N T S RECEIVED I N CONNECTION W I T H THE R E F I N A N C I N G OF INDEBTEDNESS OF CERTAIN COOPERATIVE H O U S I N G CORPORATIONS; T R E A T M ENT OF A M O U N T S P A I D F R O M QUALIFIED R E FINANCING-RELATED R E S E R V E. — (1) P A Y M E N T OF CLOSING COSTS AND CREATION OF RESERVE

EXCLUDED FROM GROSS INCOME.—For purposes of the Internal e Revenue Code of 1954, no amount shall be included in the gross s. income of a qualified cooperative housing corporation by reason t of the payment or reimbursement by a city housing developV ment agency or corporation of amounts for— (A) closing costs, or (B) the creation of reserves for the qualified housing corporation, in connection with a qualified refinancing. f^

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(2) INCOME FROM RESERVE F U N D TREATED AS MEMBER I N C O M E. —

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(A) IN GENERAL.—Income from a qualified refinancingrelated reserve shall be t r e a t e d a s derived from its members for purposes of— (i) section 216 of the I n t e r n a l Revenue Code of 1954 (relating to deduction of taxes, interest, and business depreciation by cooperative housing corporation tenant-stockholder), and (ii) section 277 of such Code (relating to deductions

incurred by certain membership organizations in transactions with members). (B) No INFERENCE.—Nothing in the provisions of this paragraph shall be construed to infer that a change in law is intended with respect to the treatment of deductions under section 277 of the Internal Revenue Code of 1954 with respect to cooperative housing corporations, and any determination of such issue shall be made as if such provisions had not been enacted. (3) TREATMENT OF CERTAIN INTEREST CLAIMED AS DEDUCTION.—

Any amount—

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