Page:United States Statutes at Large Volume 100 Part 3.djvu/548

 100 STAT. 2356

PUBLIC LAW 99-514—OCT. 22, 1986 "(C) CONSTRUCTION PERIOD.—The term 'construction period' has the meaning given the term production period under section 263A(f)(4)(B)." (4) Section 471 (relating to general rule for inventories) is amended— (A) by striking out "Whenever" and inserting in lieu thereof "(a) GENERAL RULE.—Whenever", and

(B) by adding at the end thereof the following new subsection: "(b) CROSS REFERENCE.— "For rules relating to capitalization of direct and indirect costs of property, see section 263A."

(5) Section 267(e)(5)(D) is amended— (A) by striking out "low-income housing (as defined in paragraph (5) of section 189(e))" and inserting "property described in clause (i), (ii), (iii), or (iv) of section 1250(a)(l)(B)", and (B) by striking out "low-income housing (as so defined)" and inserting "such property". (6) Section 278 is hereby repealed. (7)(A) Subsection (b) of section 447 is amended to read as follows: "(b) PREPRODUCTIVE PERIOD OF EXPENSES.— "For rules requiring capitalization of certain preproductive period of expenses, see section 263A."

(B) Subsection (a) of section 447 is amended by striking out "and with the capitalization of preproductive period of expenses described in subsection (b)". (C) Section 447(g)(l) is amended by striking out " I f and inserting in lieu thereof "Notwithstanding subsection (a) or section 263A, i f. (8) Subsection (d) of section 464 is amended to read as follows: "(d) EXCEPTION.—Subsection (a) shall not apply to any amount paid for supplies which are on hand at the close of the taxable year on account of fire, storm, or other casualty, or on account of disease or drought." (c) CLERICAL AMENDMENTS.—

(1) The table of sections for part IX of subchapter B of chapter 1 is amended by striking out the item relating to section 278 and by inserting after the item relating to section 263 the following: "Sec. 263A. Capitalization and inclusion in inventory costs of certain expenses."

(2) The table of sections for part VI of subchapter B of chapter 1 is amended by striking out the item relating to section 189. (3) The table of sections for part IX of subchapter B of chapter 1 is amended by striking out the item relating to section 280. (d) EFFECTIVE DATE.—

(1) IN GENERAL.—Except as provided in this subsection, the amendments made by this section shall apply to costs incurred after December 31, 1986, in taxable years ending after such date. (2) SPECIAL RULE FOR INVENTORY PROPERTY.—In the case of any property which is inventory in the hands of the taxpayer— (A) IN GENERAL.—The amendments made by this section shall apply to taxable years beginning after December 31, 1986.

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