Page:United States Statutes at Large Volume 102 Part 4.djvu/473

 PUBLIC LAW 100-647—NOV. 10, 1988

102 STAT. 3443

(3) Paragraph (1) of section 812(c) of the Reform Act is 26 USC 453 note. amended by striking out "paragraph (2)" and inserting in lieu thereof "paragraphs (2) and (3)". (4) Sul^ection (c) of section 812 of the Reform Act is amended by redesignating paragraph (2) as paragraph (3) and inserting after paragraph (1) the following new paragraph: "(2) SALES OF STOCK, ETC.—Section 453(k)(2) of the Internal Revenue Code of 1986, as added by subsection (a), shall apply to sales after December 31, 1986, in taxable years ending after such date." (5) Paragraph (3) of section 812(c) of the Reform Act (as so redesignated) is amended by striking out subparagraphs (B) and (C) and inserting in lieu thereof the following: "(B) such change shall be treated as having been made with the consent of the Secretary, "(C) the period for taking into account adjustments under section 481 of such Code by reason of such chemge shall be equal to 4 years, and "(D) except as provided in paragraph (4), the amount taken into account in each of such 4 years shall be the applicable percentage (determined in accordance with the following table) of the net adjustment: "In the case of the: 1st tcuuble year 2nd taxable year 3rd taxable year 4th taxable year

The applicable percentage is: 15 25 30 30.

If the taxpayer's last taxable year beginning before January 1, 1987, was the taxpayer's 1st taxable year in which sales were made under a revolving credit plan, all adjustments under section 481 of such Code shall be taken into account in the taxpayer's 1st taxable year beginning after December 31, 1986." (6) Subsection (c) of section 812 of the Reform Act is amended by adding at the end thereof the following new paragraphs: "(4) ACCELERATION OP ADJUSTMENTS WHERE CONTRACTION IN AMOUNT OF INSTALLMENT OBLIGATIONS.—

"(A) IN GENERAL.—If the percentage determined under subparagraph (B) for any taxable year in the adjustment period exceeds the percentage which would otherwise apply under paragraph (3)(D) for such taxable year (determined after the application of this paragraph for prior taxable years in the adjustment period)— "(i) the percentage determined under subparagraph (B) shall be substituted for the applicable percentage which would otherwise apply under p£u-agraph (3)(D), and "(ii) any increase in the applicable percentage by reason of clause (i) shall be applied to reduce the applicable percentage determined under paragraph (3)Q)) for subsequent taxable years in the adjustment period (beginning with the 1st of such subsequent taxable years). "(B) DETERBONATION OF PERCENTAGE.—For purposes of subparagraph (A), the percentage determined under this subparagraph for any taxable year in the adjustment period is the excess (if any) of—

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