Page:United States Statutes at Large Volume 101 Part 2.djvu/1186

 101 STAT. 1330-392

PUBLIC LAW 100-203—DEC. 22, 1987

ness shall be treated as a payment received on such installment {.^ obligation as of the later of— "(A) the time the indebtedness becomes secured indebtedness, or "(B) the proceeds of such indebtedness are received by the taxpayer. "(2)

LIMITATION

BASED ON TOTAL CONTRACT

PRICE.—The

amount treated as received under paragraph (1) by reason of any secured indebtedness shall not exceed the excess (if any) of— "(A) the total contract price, over "(B) any portion of the total contract price received under the contract before such secured indebtedness was incurred (including amounts previously treated as received under paragraph (1) but not including amounts not taken into account by reason of paragraph (3)).

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"(3) LATER

PAYMENTS TREATED AS RECEIPT OF TAX PAID

AMOUNTS.—If any amount is treated as received under paragraph (1) with respect to any installment obligation, subsequent payments received on such obligation shall not be taken into account for purposes of section 453 to the extent that the aggregate of such subsequent payments does not exceed the aggregate amount treated as received under paragraph (1). "(4) SECURED INDEBTEDNESS.—For purposes of this subsection indebtedness is secured by an installment obligation to the extent that payment of principal or interest on such indebtedness is directly secured (under the terms of the indebtedness or any underlying arrangements) by any interest in such installment obligation." (2) CLERICAL AMENDMENT.—The table of sections for subpart B of part II of subchapter E of chapter 1 is amended by striking out the item relating to section 453A and inserting in lieu thereof the following new item:

a' ' n^ i n i' "'•

"Sec. 453A. Special rules for nondealers of real property." ' (3) CONFORMING AMENDMENTS.—Sections 381(c)(8) and 691(a)

''^_ place it appears. (d) MINIMUM TAX.—Paragraph (6) of section 56(a) (relating to
 * (4) and (5) are each amended by striking out "or 453A" each

installment sales of certain property) is amended to read as follows: "(6) INSTALLMENT SALES OF CERTAIN PROPERTY.—In the

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.i) f K d:.K 26 USC 453 note.

case of any disposition after March 1, 1986, of any property described in section 1221(1), income from such disposition shall be determined without regard to the installment method under section 453. This paragraph shall not apply to any disposition with respect to which an election is in effect under section 453(1)(2)(B)."

(e) EFFECTIVE D A T E S. —

(1) IN GENERAL.—Except as provided in this subsection, the amendments made by this section shall apply to dispositions in taxable years beginning after December 31, 1987. ^/ (2) SPECIAL RULES FOR DEALERS.—

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(A) IN GENERAL.—In the case of dealer dispositions (within the meaning of section 453A of the Internal Revenue Code of 1986), the amendments made by subsections (a) and (b) shall apply to installment obligations arising from dispositions after December 31, 1987. ,;.,,,,,.,,

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