Page:United States Statutes at Large Volume 100 Part 3.djvu/559

 PUBLIC LAW 99-514—OCT. 22, 1986

100 STAT. 2367

"(A) subject to the limitations of paragraph (1), be allocated to applicable installment obligations outstanding as of the close of such taxable year which arose in preceding taxable years, beginning with applicable installment obligations arising in the earliest preceding taxable year, and "(B) be treated as a payment under subsection (a)(2). "(e) DEFINITIONS AND SPECIAL RULES.—For purposes of this section— "(1) APPLICABLE INSTALLMENT OBLIGATION.—

"(A) IN GENERAL.—The term 'applicable installment obligation' means any obligation— "(i) which arises from the disposition— "(I) after February 28, 1986, of personal property under the installment method by a person who regularly sells or otherwise disposes of personal property of the same type on the installment plan, "(II) after February 28, 1986, of real property under the installment method which is held by the taxpayer for sale to customers in the ordinary course of the taxpayer's trade or business, or "(III) after August 16, 1986, of real property under the installment method which is property used in the taxpayer's trade or business or property held for the production of rental income, but only if the sales price of such property exceeds $150,000 (determined after application of the rule under the last sentence of section 1274(c)(3)(A)(ii)), and "(ii) which is held by the seller or a member of the same affiliated group (within the meaning of section 1504(a), but without regard to section 15O40t>)) as the seller. "(B) EXCEPTION FOR PERSONAL USE AND FARM PROPERTY.—

The term 'applicable installment obligation' shall not include any obligation which arises from the disposition— "(i) by an individual of personal use property (within the meaning of section 12750t)X3)), or "(ii) of any property used or produced in the trade or business of farming (within the meaning of section 2032A(e)(4) or (5)). "(2) AGGREGATION RULES.—For purposes of this section, all persons treated as a single employer under section 52 shall be treated as 1 taxpayer. The Secretary shall prescribe regulations for the treatment under this section of transactions between such persons. "(3) AGGREGATION OF OBLIGATIONS.—The Secretary may

by

regulations provide that all (or any portion of) applicable installment obligations of a taxpayer may be treated as 1 obligation. "(4) EXCEPTION FOR SALES OF TIMESHARES AND RESIDENTIAL LOTS.—

"(A) IN GENERAL.—If a taxpayer elects the application of this paragraph, this section shall not apply to any installment obligation which— "(i) arises from a sale in the ordinary course of the taxpayer's trade or business to an individual of—

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