Page:United States Statutes at Large Volume 102 Part 4.djvu/387

 PUBLIC LAW 100-647—NOV. 10, 1988

102 STAT. 3357

(C) Clause (iii) of section 47(a)(5)(E) of the 1986 Code is amended by striking out "section 168(c)" and inserting in lieu thereof "section 168(e)". (27) Subparagraph (A) of section 47(a)(9) of the 1986 Code is amended by striking out "section 168(j)(4)(C)" and inserting in lieu thereof "section 168(h)(2)". (28) Clause (i) of section 47(d)(3)(C) of the 1986 Code is amended— (A) by striking out "present class life (as defined in section 168(g)(2)) and inserting in lieu thereof "class life (as defined in section 168(i)(l))", and (B) by striking out "no present class life" and inserting in lieu thereof "no class life'. (29) Paragraph (1) of section 48(a) of the 1986 Code is amended by striking out "recovery property (within the meaning of section 168)" in the material following subparagraph (G) and inserting in lieu thereof "property to which section 168 applies". (30) Subparagraph (C) of section 48(1)(2) of the 1986 Code is amended by striking out "which is recovery property (within the meaning of section 168)" and inserting in lieu thereof "to which section 168 applies". (31) Subsection (d) of section 167 of the 1986 Code is amended by striking out "recoverv property defined in section 168" and inserting in lieu thereof property to which section 168 applies". (b) AMENDMENTS RELATED TO SECTION 202 OF THE REFORM ACT.—

(1) Paragraph (3) of section 179(b) of the 1986 Code is amended to read as follows: "(3) LIMITATION BASED ON INCOME FROM TRADE OR BUSINESS.—

"(A) IN GENERAL.—The amount allowed as a deduction under subsection (a) for any taxable year (determined after the application of paragraphs (1) and (2)) shall not exceed the aggregate amount of taxable income of the taxpayer for such taxable year which is derived from the active conduct by the taxpayer of any trade or business during such taxable year. "(B) CARRYOVER OF DISALLOWED DEDUCTION.—The amount allowable as a deduction under subsection (a) for any taxable year shall be increased by the lesser of— "(i) the aggregate amount disallowed under subparagraph (A) for all prior taxable years (to the extent not previously allowed as a deduction by reason of this subparagraph), or "(ii) the excess (if any) of—"(I) the limitation of paragraphs (1) and (2) (or if lesser, the aggregate amount of taxable income referred to in subparagraph (A)), over "(II) the amount allowable as a deduction under subsection (a) for such taxable year without regard to this subparagraph. "(C) COMPUTATION OF TAXABLE INCOME.—For purposes of

this paragraph, taxable income derived from the conduct of a trade or business shall be computed without regard to the deduction allowable under this section." (2) Paragraph (1) of section 280F(d) of the 1986 Code is amended by striking out "subsections (a) and (b)" and inserting in lieu thereof "subsections (a) and (b), and the limitation of paragraph (3) of this subsection,".

�