Page:United States Statutes at Large Volume 102 Part 4.djvu/703

 PUBLIC LAW 100-647—NOV. 10, 1988

102 STAT. 3673

(1) The amendments made by subsections (a) and (c) shall apply to estates of the decedents dying after the date of the enactment of this Act. (2) The amendments made by subsection (b) shall apply to gifts on or after July 14, 1988.

Subtitle E—Long-Term Contract Provisions SEC. 5041. LONG-TERM CONTRACT PROVISIONS.

(a) GENERAL RULE.—Subsection (a) of section 460 of the 1986 Code is amended— (1) by striking out "70 percent" each place it appears (including in the heading of paragraph (2)) and inserting in lieu thereof "90 percent", and (2) by striking out "30 percent" in paragraph (1)(B) and inserting in lieu thereof "10 percent". Ob) SPECIAL RULES FOR RESIDENTIAL CONSTRUCTION CONTRACTS.— (1) EXCEPTION FOR HOME CONSTRUCTION CONTRACTS.—Para-

graph (1) of section 460(e) of the 1986 Code is amended to read as follows: "(1) IN GENERAL.—Subsections (a), 0>), and (c)(1) and (2) shall not apply to— "(A) any home construction contract, or "(B) any other construction contract entered into by a taxpayer— "(i) who estimates (at the time such contract is entered into) that such contract will be completed within the 2-year period beginning on the contract commencement date of such contract, and "(ii) whose average annual gross receipts for the 3 taxable years preceding the taxable year in which such contract is entered into do not exceed $10,000,000. In the case of a home construction contract with respect to which the requirements of clauses (i) and (ii) of subparagraph (B) are not met, section 263A shall apply notwithstanding subsection (c)(4) thereof." (2) SPECIAL TREATMENT FOR OTHER RESIDENTIAL CONSTRUCTION

CONTRACTS.—Subsection (e) of section 460 of the 1986 Code is amended by adding at the end thereof the following new paragraph: "(5) SPECIAL RULE FOR RESIDENTIAL CONSTRUCTION CONTRACTS WHICH ARE NOT HOME CONSTRUCTION CONTRACTS.—In the Case o f

any residential construction contract which is not a home construction contract, subsection (a) shall be applied— "(A) by substituting '70 percent' for '90 percent' each place it appears, and "(B) by substituting '30 percent' for '10 percent'." (3) DEFINITIONS.—Subsection (e) of section 460 of the 1986 Code is amended by adding at the end thereof the following new paragraph: "(6) DEFINITIONS RELATING TO RESIDENTIAL CONSTRUCTION CON-

TRACTS.—For purposes of this subsection— "(A) HOME CONSTRUCTION CONTRACT.—The term 'home construction contract' means any construction contract if 80 percent or more of the estimated total contract costs (as of the close of the taxable year in which the contract was

26 USC 2056 note. 26 USC 2523 note.

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