Page:United States Statutes at Large Volume 103 Part 3.djvu/254

 103 STAT. 2322 PUBLIC LAW 101-239—DEC. 19, 1989 (B) Subsection (1) (relating to eligible basis for new build- ings to include expenditures before close of 1st year of credit period). 3 (8) GUIDANCE ON DIFFICULT DEVELOPMENT AREAS AND POSTING OF BOND TO AVOID RECAPTURE.— Not later than 180 days after the date of the enactment of this Act— (A) the Secretary of Housing and Urban Development i shall publish initirn guidance on the designation of d^cult development areas under section 42(d)(5)(C) of such Code, as added by this section, and (B) the Secretary of the Treasury shall publish initial guidance under section 42(j)(6) of such Code (relating to no ''" recapture on disposition of building (or interest therein) where bond posted). SEC. 7109. LOW-INCOME HOUSING CREDIT EXEMPT FROM INCOME PHASE-OUT OF $25,000 EXEMPTION FROM PASSIVE LOSS RULES. (a) IN GENERAL.—Paragraph (3) of section 469(i) (relating to phase- out of exemption) is amended by redesignating subparagraph (D) as subparagraph (E) and by striking subparagraphs (B) and (C) and inserting the following new subparagraphs: "(B) SPECIAL PHASE-OUT OF REHABILITATION CREDIT.— In the case of any portion of the passive activity credit for any taxable year which is attributable to the rehabilitation investment credit (within the meaning of section 48(o)), subparagraph (A) shall be applied by substituting '$200,000' for ^$100,000'. "(C) EXCEPTION FOR LOW-INCOME HOUSING CREDIT. — Subparagraph (A) sh^l not apply to any portion of the passive activity credit for any taxable year which is attrib- utable to any credit determined under section 42. "(D) ORDERING RULES TO REFLECT EXCEPTION AND SEPA- RATE PHASE-OUT.—I f subparagraph (B) or (C) applies for any taxable year, paragraph(l) shall be applied— " (i) first to the passive activity loss, "(ii) second to the portion of the passive activity credit to which subparagraph (B) or (C) does not apply, "(iii) third to the portion of such credit to which subparagraph (B) applies, and "(iv) then to the portion of such credit to which subparagraph (C) applies." 26 USC 469 note. (b) EFFECTIVE DATE.— (1) IN GENERAL.— Except as provided in paragraph (2), the amendments made by this section shall apply to property placed in service after December 31, 1989, in taxable years ending after such date. (2) SPECIAL RULE WHERE INTEREST HELD IN PASS-THRU ENTITY.— In the case of a taxpayer who holds an indirect interest in property described in paragraph (1), the amendments made by this section shall apply only if such interest is acquired after December 31, 1989. SEC. 7110. EXTENSION AND MODIFICATION OF RESEARCH CREDIT. (a) EXTENSION.— (1) IN GENERAL. — Subsection (h) of section 41 (relating to termination), as redesignated by subtitle H, is amended—

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