Page:United States Statutes at Large Volume 100 Part 3.djvu/549

 PUBLIC LAW 99-514—OCT. 22, 1986

100 STAT. 2357

(B) CHANGE IN METHOD OF ACCOUNTING.—If the taxpayer

is required by the amendments made by this section to change its method of accounting with respect to such property for any taxable year— (i) such change shall be treated as initiated by the taxpayer, (ii) such change shall be treated as made with the consent of the Secretary, and (iii) the period for taking into account the adjustments under section 481 by reason of such change shall not exceed 4 years. (3)

SPECIAL RULE FOR SELF-CONSTRUCTED PROPERTY.—The

amendments made by this section shall not apply to any property which is produced by the taxpayer for use by the taxpayer if substantial construction had occurred before March 1, 1986. (4) TRANSITIONAL RULE FOR CAPITALIZATION OF INTEREST AND TAXES.— (A) TRANSITION PROPERTY EXEMPTED FROM INTEREST

CAPiTAUZATiON.—Section 263A(f) of the Internal Revenue Code of 1986 (as added by this section) and the amendment made by subsection OaXl) shall not apply to any property— (i) to which the amendments made by section 201 do not apply by reason of sections 203(a)(l)(D) and (E) and 203(a)(5)(A), and (ii) to which the amendments made by section 251 do not apply by reason of section 251(d)(3)(M). (B) INTEREST AND TAXES.—Section 263A of such Code shall not apply to property described in the matter following subparagraph (B) of section 207(e)(2) of the Tax Equity and Fiscal Responsibility Act of 1982 to the extent it would require the capitalization of interest and taxes paid or incurred in connection with such property which are not required to be capitalized under section 189 of such Clode (as in effect before the amendment made by subsection (b)(D). (5) TRANSITION RULE CONCERNING CAPITAUZATION OF INVENTORY RULES.—In the case of a corporation which on the date of

the enactment of this Act was a member of an affiliated group of corporations (within the meaning of section 1504(a) of the Internal Revenue Code of 1986), the parent of which— (A) was incorporated in California on April 15, 1925, (B) adopted LIFO accounting as of the close of the taxable year ended December 31, 1950, and (C) was, on May 22, 1986, merged into a Delaware corporation incorporated on March 12, 1986, the amendments made by this section shall apply under a cutoff method whereby the uniform capitalization rules are applied only in costing layers of inventory acquired during taxable years beginning on or after January 1, 1987. (6) TREATMENT OF CERTAIN REHABIUTATION PROJECT.—The

amendments made by this section shall not apply to interest and taxes paid or incurred with respect to the rehabilitation and conversion of a certified historic building which was formerly a factory into an apartment project with 155 units, 39 units of which are for low-income families, if the project was approved for annual interest assistance on June 10, 1986, by the housing authority of the State in which the project is located.

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