Page:United States Statutes at Large Volume 100 Part 3.djvu/980

 100 STAT. 2788

PUBLIC LAW 99-514—OCT. 22, 1986 ^5 ". * ^

"(iii) TAX-EXEMPT CONTROLLED ENTITY.—The term 'tax-exempt controlled entity' means any corporation ' (which is not a tax-exempt entity determined without regard to this subparagraph and paragraph (4)(E)) if 50 n percent or more (by value) of the stock in such corpora^* -' tion is held (directly or through the application of section 318 determined without regard to the 50-percent limitation contained in subsection (a)(2)(C) thereof) by 1 or more tax-exempt entities." •;«i ^ (ii)(I) Except as otherwise provided in this clause, the amendment made by clause (i) shall apply to property iii 1 placed in service after September 27, 1985; except that such amendment shall not apply to any property acquired pursuant to a binding written contract in effect on such date (and at all times thereafter). (II) If an election under this subclause is made with respect to any property, the amendment made by clause (i) shall apply to such property whether or not placed in service on or before September 27, 1985. (F) Clause (i)(I) of section 31(g)(16)(C) of the Tax Reform Act of 1984 (defining exempt arbitrage profits) is amended by striking out "section 168(j)(4)(E)(i)(I) and inserting in lieu thereof "section 168(j)(4)(E)(i)". i »*" (G) Clause (i) of section 168(j)(4)(E) is amended by striking out "preceding sentence" and inserting in lieu thereof ^ f "preceding sentence and subparagraph (D)(ii)". (3) REPEAL OF OVERLAPPING SECRETARIAL AUTHORITY.—Clause

(iv) of section 168(j)(5)(C) (relating to property not subject to rapid obsolescence may be excluded) is hereby repealed. (4) PARTNERSHIP RULES.—

r;.'

(A) Paragraph (8) of section 168(j) (relating to tax-exempt use of property leased to partnerships, etc., determined at partner level) is amended by striking out "and paragraphs (4) and (5) of section 48(a)" in the matter preceding subparagraph (A). (B) Paragraph (9) of section 168(j) (relating to treatment of property owned by partnerships, etc.) is amended— (i) by striking out "and paragraphs (4) and (5) of section 48(a)" in subparagraph (A), and (ii) by striking out "loss deduction" in subparagraph (B)(i) and inserting in lieu thereof "loss, deduction". (C) Paragraph (5) of section 48(a) (relating to property used by governmental units or foreign persons or entities) is amended by redesignating subparagraph (D) as subparagraph (E) and by inserting after subparagraph (C) the following new subparagraph: "(D) SPECIAL RULES FOR PARTNERSHIPS, ETC.—For purposes

of this paragraph and paragraph (4), rules similar to the rules of paragraphs (8) and (9) of section 168(j) shall apply." (5) TREATMENT OF CERTAIN AIRCRAFT LEASED TO FOREIGN PERSONS.—

(A) Subsection (a) of section 47 (relating to certain dispositions, etc., of section 38 property) is amended by adding at the end thereof the following new paragraph: "(9) AIRCRAFT LEASED TO FOREIGN PERSONS OR ENTITIES.—

t, Ar

"(A) IN GENERAL.—Any aircraft which was new section 38 property for the taxable year in which it was placed in

�