Page:United States Statutes at Large Volume 102 Part 4.djvu/536

 102 STAT. 3506

PUBLIC LAW 100-647—NOV. 10, 1988 "(vii) PAYDOWNS.—For purposes of applying this subparagraph to interest expenses attributable to any month, the term 'paydowns' means the excess (if any) of— "(I) the aggregate amount of indebtedness of the taxpayer outstanding on November 16, 1985, over "(II) the lowest amount of indebtedness of the taxpayer outstanding as of the close of any preceding month beginning after November 16, 1985 (or, to the extent provided in regulations under subparagraph (A)(iii), the average amount of indebtedness outstanding during any such month). "(C) COORDINATION OF SUBPARAGRAPHS (A) A N D (B). — I n

applying subparagraph (B), there shall first be taken into account indebtedness to which subparagraph (A) applies. "(D) SPECIAL RULES.—

"(i) In the case of the 1st 9 taxable years of the taxpayer beginning after December 31, 1986, the amendments made by this section shall not apply to interest expenses paid or accrued by the taxpayer during the taxable year with respect to an aggregate amount of indebtedness which does not exceed the applicable percentage (determined under the following table) of the indebtedness described in clause (iii) or (iv): "In the case of the: 1st taxable year 2nd taxable year 3rd taxable year 4th taxable year 5th taxable year 6th taxable year 7th taxable year 8th taxable year 9th taxable year

The applicable percentage is: 90 80 70 60 50 40 30 20 10.

"(ii) The provisions of this subparagraph shall apply in lieu of the provisions of subparagraphs (A) and (B). Oklahoma.

"(iii) INDEBTEDNESS OUTSTANDING ON MAY 29, 1985.—

Indebtedness is described in this clause if it is indebtedness (which was outstanding on May 29, 1985) of a corporation incorporated on June 13, 1917, which has its principal place of business in Bartlesville, Oklahoma. New York.

"(iv) INDEBTEDNESS OUTSTANDING ON MAY 29, 1985.—

Indebtedness is described in this clause if it is indebtedness (which was outstanding on May 29, 1985) of a member of an affiliated group (as defined in section 1504(a)), the common parent of which was incorporated on August 26, 1926, and has its principal place of business in Harrison, New York. "(E) TREATMENT OF AFFIUATED GROUP.—For purposes of this paragraph, all members of the same affiliated group of corporations (as defined in section 864(e)(5)(A) of the Internal Revenue Code of 1986, as added by this section) shall be treated as 1 taxpayer whether or not such members filed a consolidated return. "(F) ELECTION TO HAVE PARAGRAPH NOT APPLY.—A taxpayer may elect (at such time and in such manner as the

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