Page:United States Statutes at Large Volume 102 Part 4.djvu/384

 102 STAT. 3354

PUBLIC LAW 100-647—NOV. 10, 1988 "(B) EXCEPTION FOR CERTAIN PROPERTY SUBJECT TO UNITED STATES TAX AND USED BY FOREIGN PERSON OR ENTITY.—

Clause (iii) of subparagraph (A) shall not apply with respect to any property if more than 50 percent of the gross income for the taxable year derived by the foreign person or entity from the use of such property is— "(i) subject to tax under this chapter, or "(ii) included under section 951 in the gross income of a United States shareholder for the taxable year with or within which ends the taxable year of the controlled foreign corporation in which such income was derived. For purposes of the preceding sentence, any exclusion or exemption shall not apply for purposes of determining the amount of the gross income so derived, but shall apply for purposes of determining the portion of such gross income subject to tax under this chapter." (9) Subsection (a) of section 178 of the 1986 Code is amended by striking out "the deduction allowable to a lessee of a lease for any taxable year for amortization under section 167, 169, 179, 185, 190, 193, or 194" and inserting in lieu thereof "the deduction allowable to a lessee for exhaustion, wear and tear, obsolescence, or amortization". (10) Subparagraph (A) of section 280F(d)(3) of the 1986 Code is amended by striking out "any recovery deduction" and inserting in lieu thereof "any depreciation deduction". (IIXA) Paragraph (2) of section 1680^) of the 1986 Code is amended to read as follows: "(2)

1 5 0 PERCENT DECUNING BALANCE METHOD IN CERTAIN

CASES.—Paragraph (1) shall be applied by substituting '150 percent' for '200 percent' in the case of— "(A) any 15-year or 20-year property, or "(B) any property (other than property described in paragraph (3)) with respect to which the taxpayer elects under paragraph (5) to have the provisions of this paragraph apply." (B) Paragraph (5) of section 168(b) of the 1986 Code is amended by striking out "under paragraph (3)(C)" and inserting in lieu thereof "under paragraph (2)(B) or (3)(C)". (C) Subsection (c) of section 168 of the 1986 Code is amended to read as follows: "(c) APPLICABLE RECOVERY PERIOD.—For purposes of this section— "(1) IN GENERAL.—Except as provided in paragraph (2), the applicable recovery period shall be determined in accordance with the following table: "In the case of: 3-year property 5-year property 7-year property 10-year property 15-year property 20-year property Residential rental property Nonresidential real property "(2)

The applicable recovery period is: 3 years 5 years 7 years 10 years 15 years 20 years 27.5 years 31.5 years.

PROPERTY FOR W H I C H 1 5 0 PERCENT METHOD ELECTED.—In

the case of property to which an election under subsection (b)(2)(B) applies, the applicable recovery period shall be determined under the table contained in subsection (g)(2)(C)."

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