Page:United States Statutes at Large Volume 104 Part 2.djvu/945

 PUBLIC LAW 101-508 —NOV. 5, 1990 104 STAT. 1388-537 " (b) WHEN EXPENDITURES TAKEN INTO ACCOUNT.— "(1) IN GENERAL.— Qualified rehabilitation expenditures with respect to any qualified rehabilitated building shall be taken into account for the teixable year in which such qualified rehabilitated building is placed in service. "(2) COORDINATION WITH SUBSECTION (d).— The amount which would (but for this paragraph) be taken into account under paragraph (1) with respect to any qualified rehabilitated building shall be reduced (but not below zero) by any amount of qualified rehabilitation expenditures taken into account under subsection (d) by the taxpayer or a predecessor of the taxpayer (or, in the case of a sale and leaseback described in section 50(a)(2)(C), by the lessee), to the extent any amount so taken into account has not been required to be recaptured under section 50(a). "(c) DEFINITIONS.—For purposes of this section— "(1) OUAUFIED REHABILITATED BUILDING. — (A) IN GENERAL.—The term 'qualified rehabilitated building' means any building (and its structural components) if— "(i) such building has been substantially rehabilitated, "(ii) such building was placed in service before the beginning of the rehabilitation, '(iii) in the case of any building other than a certified historic structure, in the rehabilitation process— "(I) 50 percent or more of the existing external walls of such building are retained in place as external walls, "(II) 75 percent or more of the existing external walls of such building are retained in place as internal or external walls, and "(III) 75 percent or more of the existing internal structural framework of such building is retained in place, and "(iv) depreciation (or amortization in lieu of depreciation) is allowable with respect to such building. " (B) BUILDING MUST BE FIRST PLACED IN SERVICE BEFORE 1936. — In the case of a building other than a certified historic structure, a building shall not be a qualified rehabilitated building unless the building was first placed in service before 1936. "(C) SUBSTANTIALLY REHABILITATED DEFINED.— "(i) IN GENERAL. —For purposes of subparagraph (A)(i), a building shall be treated as having been substantially rehabilitated only if the qualified rehabilitation expenditures during the 24-month period selected by the taxpayer (at the time and in the manner prescribed by regulation) and ending with or within the taxable year exceed the greater of— "(I) the adjusted basis of such building (and its structural components), or "(II) $5,000. The adjusted basis of the building (and its structural components) shall be determined as Of the beginning of the 1st day of such 24-month period, or of the holding period of the building, whichever is later. For purposes

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