Page:United States Statutes at Large Volume 102 Part 4.djvu/409

 PUBLIC LAW 100-647—NOV. 10, 1988

102 STAT. 3379

shall not exceed the clause (ii) percentage of the amount of the credit which would (but for this subparagraph) be determined under this section with respect to such building. "(ii) DETERMINATION OF PERCENTAGE.—For purposes

of clause (i), the clause (ii) percentage with respect to any building is the percentage which— "(I) the housing credit dollar amount allocated to such building bears to "(II) the credit amount determined in accordance with clause (iii). "(iii) DETERMINATION OF CREDIT AMOUNT.—The credit amount determined in accordance with this clause is the amount of the credit which would (but for this subparagraph) be determined under this section with respect to the building if— "(I) this section were applied without regard to paragraphs (2)(A) and (3)(B) of subsection (f), and "(II) subsection (fK3XA) were applied without regard to 'the percentage equal to % of." (18) Paragraph (6) of section 42(h) of the 1986 Code is amended by adding at the end thereof the following new subparagraph: "(E) HOUSING CREDIT AGENCY TO SPECIFY APPLICABLE PERCENTAGE AND MAXIMUM QUALIFIED BASIS.—In a l l o c a t i n g

a housing credit dollar amount to any building, the housing credit agency shall specify the applicable percentage and the maximum qualiHed basis which may be taken into account under this section with respect to such building. The applicable percentage and maximum qualiiied basis so specified shall not exceed the applicable percentage and qualified basis determined under this section without rftffsrd to t n i s suDS^ction

(19XA) Subparagraph (A) of section 42(i)(2) of the 1986 Code is amended— (i) by inserting "or any prior taxable year" after "such taxable year", (ii) by striking out "there is outstanding" and inserting in lieu thereof "there is or was outstanding, and (iii) by striking out "are used" and inserting in lieu thereof are or were used". (B) Subparagraph (B) of section 42(i)(2) of the 1986 Code is amended to read as follows: "(B) ELECTION TO REDUCE ELIGIBLE BASIS BY BALANCE OF

LOAN OR PROCEEDS OF OBLIGATiONS.—A loan or tax-exempt obligation shall not be taken into account under subparagraph (A) if the taxpayer elects to exclude from the eligible basis of the building for purposes of subsection (d)— "(i) in the case of a loan, the principal amount of such loan, and "(ii) in the case of a tax-exempt obligation, the proceeds of such obligation." (C) Paragraph (2) of section 42(i) of the 1986 Code is amended by redesignating subparagraph (C) as subparagraph (D) and by inserting after subparagraph (B) the following new subparagraph: "(C) SPECIAL RULE FOR SUBSIDIZED CONSTRUCTION FINANC-

ING.—Subparagraph (A) shall not apply to any tax-exempt

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