Page:United States Statutes at Large Volume 102 Part 4.djvu/685

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PUBLIC LAW 100-647—NOV. 10, 1988

102 STAT. 3655

computing the cost-sharing amount (determined under section 936(h)(5)(C)(i)(I) of the 1986 Code). (4) The Secretary of the Treasury or his delegate may prescribe such regulations as may be necessary to carry out the purposes of this subsection, including regulations providing for ' the source of gross income and the allocation and apportionment of deductions to take into account the adjustments required by paragraph (3). (5) Paragraph (6) of section 864(e) of the 1986 Code shall not apply to qualified research and experimental expenditures. (e) YEARS TO WHICH SECTION APPLIES.—

(1) IN GENERAL.—Except as provided in this subsection, this section shall apply to the taxpayer's 1st taxable year beginning after August 1, 1987. (2) REDUCTION IN AMOUNTS TO WHICH SECTION APPLIES.—Not-

withstanding paragraph (1), this section shall only apply to that portion of the qualified research and experimental expenditures for the taxable year referred to in paragraph (1) which bears the same ratio to the total amount of such expenditures as— (A) the lesser of 4 months or the number of months in the V taxable year, bears to (B) the number of months in the taxable year. SEC. 4010. EXTENSION AND MODIFICATION OF TARGETED JOBS CREDIT.

(a) 2-YEAR EXTENSION.—Paragraph (4) of section 51(c) of the 1986

Code (relating to termination) is amended by striking out "December 31, 1988'^ and inserting in lieu thereof "December 31, 1989". (b) EXTENSION OF AUTHORIZATION.—Paragraph (2) of section 261(f) of the Economic Recovery Tax Act of 1981 is amended by striking out "and 1988" and inserting in lieu thereof "1988, and 1989.

26 USC 5i note.

(c) ECONOMICALLY DISADVANTAGED YOUTH STATUS RESTRICTED TO INDIVIDUALS UNDER AGE 23.—

(1) IN GENERAL.—Subparagraph (B) of section 51(d)(3) of the 1986 Code is amended by striking out "age 25" and inserting in lieu thereof "age 23". (2) EFFECTIVE DATE.—The amendment made by paragraph (1) 26 USC 51 note, shall apply to individuals who begin work for the employer after December 31, 1988. (d) REDUCTION IN PERCENTAGE OF CREDIT FOR SUMMER YOUTH EMPLOYEES.—

(1) IN GENERAL.—Subparagraph (B) of section 51(d)(12) of the 1986 Code is amended by striking out clause (i) and by redesignating clauses (ii) and (iii) as clauses (i) and (ii). (2) EFFECTIVE DATE.—The amendment made by paragraph (1) 26 USC 51 note, shall apply to individueds who begin work for the employer after December 31, 1988. SEC. 4011. TREATMENT OF PUBLICLY OFFERED REGULATED INVESTMENT COMPANIES UNDER 2-PERCENT FLOOR.

(a) IN GENERAL.—Subsection (c) of section 67 of the 1986 Code, as amended by section 1001(f) of this Act, is amended to read as follows: "(c) DISALLOWANCE OF INDIRECT DEDUCTION THROUGH PASS-THRU ENTITY.—

"(1) IN GENERAL.—The Secretary shall prescribe regulations which prohibit the indirect deduction through pass-thru entities of amounts which are not allowable as a deduction if paid or incurred directly by an individual and which contain such

Regulations,

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