Page:United States Statutes at Large Volume 103 Part 3.djvu/306

 103 STAT. 2374 PUBLIC LAW 101-239—DEC. 19, 1989 minimum tax for taxable years beginning after December 31, 1989. (b) ADJUSTMENT FOR DISALLOWED PORTION OF ORPHAN DRUG CREDIT. — (1) IN GENERAL. —Clauses (iii) and (iv) of section 53(d)(l)(B) (as amended by subsection (a)) are each amended by inserting after "section 29(d)(5)(B)" the following: "or not allowed under section 28 solely by reason of the application of section 28(d)(2)(B)". 26 USC 53 note. (2) EFFECTIVE DATE.— The amendment made by paragraph (1) shall apply for purposes of determining the amount of the minimum tax credit for taxable years beginning after December 31, 1989; except that, for such purposes, section 53(b)(l) of the Internal Revenue Code of 1986 shall be applied as if such amendment had been in effect for all prior taxable years. (c) EXEMPTION FOR CERTAIN HOME CONSTRUCTION CONTRACTS.— (1) IN GENERAL. —Paragraph (3) of section 56(a) (relating to treatment of certain long-term contracts) is amended by strik- ing "with respect to which the requirements of clauses (i) and (ii) of section 460(e)(l)(B) are met". 26 USC 56 note. (2) EFFECTIVE DATE.— The amendment made by paragraph (1) shall apply to contracts entered into in taxable years beginning after September 30, 1990. (d) TREATMENT OF CERTAIN RESEARCH AND EXPERIMENTAL EXPENDITURES. — (1) IN GENERAL.— Paragraph (2) of section 56(b) (relating to circulation and research and experimental expenditures) is amended by adding at the end thereof the following new subparagraph: "(D) EXCEPTION FOR CERTAIN RESEARCH AND EXPERI- MENTAL EXPENDITURES.— If the taxpayer materially partici- pates (within the meaning of section 469(h)) in an activity, this paragraph shall not apply to any amount allowable as a deduction under section 174(a) for expenditures paid or incurred in connection with such activity." 26 USC 56 note. (2) EFFECTIVE DATE.— The amendment made by paragraph (1) shall apply to taxable years beginning after December 31, 1990. (e) 90-PERCENT LIMITATION ON FOREIGN TAX CREDIT NOT TO APPLY TO CERTAIN CORPORATIONS.— (1) IN GENERAL. —Paragraph (2) of section 59(a) (relating to _ limitation of foreign taix credit to 90-percent of tax) is amended by adding at the end thereof the following new subparagraph: "(C) EXCEPTION.— Subparagraph (A) shall not apply to any domestic corporation if^ "(i) more than 50 percent of the stock of such domes- tic corporation (by vote and value) is owned by United States persons who are not members of an affiliated group (as defined in section 1504 of such Code) which includes such corporation. International "(ii) all of the activities of such corporation are con- agreements, ducted in 1 foreign country with which the United States has an income tax treaty in effect and such treaty provides for the exchange of information be- tween such foreign country and the United States, "(iii) all of the current earnings and profits of such " corporation are distributed at least annually (other than current earnings and profits retained for normal

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