Page:United States Statutes at Large Volume 100 Part 3.djvu/522

 100 STAT. 2330

PUBLIC LAW 99-514—OCT. 22, 1986 "(i) PROPERTY PLACED IN SERVICE AFTER 1989.—The

depreciation deduction with respect to any property placed in service in a taxable year beginning after 1989 shall be determined under whichever of the following methods yields deductions with a smaller present value: "(I) The alternative system of section 168(g), or "(II) The method used for book purposes, "(ii) PROPERTY TO WHICH NEW ACRS SYSTEM APPLIES.—

In the case of any property to which the amendments made by section 201 of the Tax Reform Act of 1986 apply and which is placed in service in a taxable year beginning before 1990, the depreciation deduction shall be determined— "(I) by taking into account the adjusted basis of such property (as determined for purposes of computing alternative minimum taxable income) as of the close of the last taxable year beginning before January 1, 1990, and "(II) by using the straight-line method over the remainder of the recovery period applicable to such property under the alternative system of section 168(g). "(iii) PROPERTY TO WHICH ORIGINAL ACRS SYSTEM APPLIES.—In the case of any property to which section 168 (as in effect on the day before the date of the enactment of the Tax Reform Act of 1986 and without regard to subsection (d)(l)(A)(ii) thereof) applies, the depreciation deduction shall be determined— "(I) by taking into account the adjusted basis of such property (as determined for purposes of computing the regular tax) as of the close of the last taxable year beginning before January 1, 1990, and "(II) by using the straight line method over the remainder of the recovery period which would apply to such property under the alternative system of section 168(g). "(iv) PROPERTY PLACED IN SERVICE BEFORE 1981.—In

the case of any property not described in clause (i), (ii), or (iii), the amount allowable as depreciation or amortization with respect to such property shall be determined in the same manner as for purposes of computing taxable income. "(v) SLOWER METHOD USED IF USED FOR BOOK PUR-

POSES.—In the case of any property to which clause (ii), (iii), or (iv) applies, if the depreciation method used for book purposes yields deductions for taxable years beginning after 1989 with a smaller present value than the method which would otherwise be used under such clause, the method used for book purposes shall be used in lieu of the method which would otherwise be used under such clause. "(B) INCLUSION OF ITEMS INCLUDED FOR PURPOSES OF COMPUTING EARNINGS AND PROFITS.—

"(i) IN GENERAL.—In the case of any amount which is excluded from gross income for purposes of computing

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