Page:United States Statutes at Large Volume 102 Part 4.djvu/674

 102 STAT. 3644

PUBLIC LAW 100-647—NOV. 10, 1988

amended by section 1002(1)(14)(A) of this Act, is amended by adding at the end thereof the following new subparagraph: "(E) EXCEPTION WHERE lo PERCENT OF COST INCURRED.—

"(i) IN GENERAL.—An allocation meets the requirements of this subparagraph if such allocation is made with respect to a qualified building which is placed in service not later than the close of the second calendar year following the calendar year in which the allocation is made. "(ii) QUALIFIED BUILDING.—For purposes of clause (i), the term 'qualified building' means any building which is part of a project if the taxpayer's basis in such project (as of the close of the calendar year in which the allocation is made) is more than 10 percent of the taxpayer's reasonably expected basis in such project (as of the close of the second calendar year referred to in clause (i)). Such term does not include any existing building unless a credit is allowable under subsection (e) for rehabilitation expenditures paid or incurred by the taxpayer with respect to such building for a taxable year ending during the second calendar year referred to in clause (i) or the prior taxable year." (b) CONFORMING AMENDMENTS.—

(1) Section 42(h)(l)(B) of the 1986 Code, as amended by section 1002 of this Act, is amended by striking out "(C) or (D)" and inserting in lieu thereof "(C), (D), or (E)". 26 USC 469 note. (2) Paragraph (3) of section 501(c) of the Reform Act is hereby repealed. (3) Subsection (n) of section 42 of the 1986 Code, as amended by title I of this Act, is amended to read as follows: "(n) TERMINATION.—The State housing credit ceiling under subsection (h) shall be zero for any calendar year after 1989 and subsection (h)(4) shall not apply to any building placed in service after 1989." 26 USC 42 note. (c) EFFECTIVE DATE.—The amendments made by this section shall apply to amounts allocated in calendar years after 1987. SEC. 4004. SIMPLIFICATION OF RULE WHERE PARTNERSHIP HOLDS QUALIFIED LOW-INCOME BUILDING.

(a) IN GENERAL.—Subparagraph (B) of section 42(j)(5) of the 1986 Code, as amended by title I of this Act, is amended to read as follows: "(B) PARTNERSHIPS TO WHICH PARAGRAPH APPLIES.—This

paragraph shall apply to any partnership which has 35 or more partners unless the partnership elects not to have this paragraph apply." 26 USC 42 note.

(b) EFFECTIVE DATES.—

(1) IN GENERAL.—The amendment made by subsection (a) shall take effect as if included in the amendments made by section 252 of the Reform Act. (2) PERIOD FOR ELECTION.—The period for electing not to have section 42(j)(5) of the 1986 Code apply to any partnership shall not expire before the date which is 6 months after the date of the enactment of this Act.

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