Page:United States Statutes at Large Volume 100 Part 3.djvu/739

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PUBLIC LAW 99-514—OCT. 22, 1986

100 STAT. 2547

ated group of corporations (as defined in section 864(e)(5)(A) of the Internal Revenue Code of 1986, as added by this section) shall be treated as one taxpayer whether or not such members filed a consolidated return. (C) SPECIAL RULE.—In the case of the first 9 taxable years beginning after December 31, 1986, the following applicable percentages shall be applied (in lieu of those set forth in subparagraph (A)) to interest expenses paid or accrued with respect to the amount of indebtedness described in subparagraph (D) or (E): The applicable percentage is: 10 20 30 40 50 60 70 80 90.

In the case of the: 1st taxable year 2nd taxable year 3rd taxable year 4th taxable year 5th taxable year 6th taxable year 7th taxable year 8th taxable year 9th taxable year (D)

INDEBTEDNESS

OUTSTANDING

ON

M A Y 29,

1985.—

Indebtedness is described in this subparagraph if it is indebtedness (which was outstanding on May 29, 1985) of a corporation incorporated on June 13, 1917, which has its principal place of business in Bartlesville, Oklahoma. (E) INDEBTEDNESS OUTSTANDING ON MAY 29, 1985.—Indebt-

edness is described in this subparagraph if it is indebtedness (which was outstanding on May 29, 1985) of a member of an affiliated group (as defined in section 1504(a)), the common parent of which was incorporated on August 26, 1926, and has its principal place of business in Harrison, New York. (3) SPECIAL RULE.—

(A) IN GENERAL.—In the case of a qualified corporation, in lieu of applying paragraph (2), the amendments made by this section shall not apply to interest expenses allocable to any indebtedness to the extent such indebtedness does not exceed $500,000,000 if— (i) the indebtedness was incurred to develop or improve existing property that is owned by the taxpayer on November 16, 1985, and was acquired with the intent to develop or improve the property, (ii) the loan agreement with respect to the indebtedness provides that the funds are to be utilized for purposes of developing or improving the above property, and (iii) the debt to equity ratio of the companies that join in the filing of the consolidated return is less than 15 percent. (B) QUALIFIED CORPORATION.—For purposes of subparagraph (A), the term "qualified corporation" means a corporation— (i) which was incorporated in Delaware on June 29, 1964, (ii) the principal subsidiary of which is a resident of Arkansas, and

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