Page:United States Statutes at Large Volume 100 Part 3.djvu/738

 100 STAT. 2546

PUBLIC LAW 99-514—OCT. 22, 1986

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gate amount of indebtedness outstanding on November 16, 1985:

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The applicable percentage is: 25 50 75.

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(B) CONSOLIDATION RULE NOT TO APPLY TO CERTAIN INTEREST.— INTEREST ATTRIBUTABLE TO INCREASE IN INDEBTEDi NESS FROM JANUARY 1, 1984, THROUGH MAY 28, 1985.—In

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the case of the first 5 taxable years of the taxpayer beginning after December 31, 1986, with respect to interest expenses attributable to the excess of— (I) the amount of the outstanding debt of the taxpayer on May 29, 1985, over (II) the amount of the outstanding debt of the taxpayer on December 31, 1983, paragraph (1) of section 864(e) of the Internal Revenue Code of 1986 (as added by this section) shall apply only to the applicable percentage (determined under the following table) of such interest expenses paid or accrued by the taxpayer during the taxable year:

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The applicable percentage is: 16% SSVa 50 66% 83%.

In the case of the: 1st taxable year 2nd taxable year 3rd taxable year 4th taxable year 5th taxable year

(ii) I N T E R E S T A T T R I B U T A B L E TO I N C R E A S E I N I N D E B T E D -

N E S S FROM JANUARY 1, 1983, THROUGH DECEMBER 31,

1983.—In the case of the first 4 taxable years of the taxpayer beginning after December 31, 1986, with respect to interest expenses attributable to the excess of(I) the amount of the outstanding debt of the taxpayer on January 1, 1984, over (II) the amount of the outstanding debt of the taxpayer on December 31, 1982, paragraph (1) of section 864(e) of the Internal Revenue Code of 1986 (as added by this section) shall apply only to the applicable percentage (determined under the following table) of such interest expenses paid or accrued by the taxpayer during the taxable year:

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In the case of the: 1st taxable year 2nd taxable year 3rd taxable year 4th taxable year



The applicable percentage is: 20 40 60 80.

(iii) ORDERING RULE.—For purposes of this subparagraph, indebtedness outstanding on November 16, 1985, shall be treated as attributable first to any excess described in clause (i), then to any excess described in clause (ii), and then to other indebtedness. (iv) TREATMENT OF AFFILIATED GROUP.—For purposes of this subparagraph, all members of the same affili-

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