Page:United States Statutes at Large Volume 111 Part 1.djvu/1028

 Ill STAT. 1004 PUBLIC LAW 105-34—AUG. 5, 1997 account gains and losses from sales and exchanges of property used in connection with such activities, and "(ii) as allocable to other activities to the extent such gain exceeds the amount allocated under clause (i). Applicability. A similar rule shall apply for purposes of allocating any net capital loss. "(C) NET CAPITAL LOSS.—The term 'net capital loss' means the excess of the losses from sales or exchanges of capital assets over the gains from sales or exchange of capital assets. "(5) GENERAL CREDITS. —The term 'general credits' means any credit other than the low-income housing credit, the rehabilitation credit, the foreign tax credit, and the credit allowable under section 29. "(6) FOREIGN INCOME TAXES.—The term 'foreign income taxes' means taxes described in section 901 which are paid or accrued to foreign countries and to possessions of the United States. "(e) SPECIAL RULE FOR UNRELATED BUSINESS TAX. —In the case of a partner which is an organization subject to tax under section 511, such partner's distributive share of any items shall be taken into account separately to the extent necessary to comply with the provisions of section 512(c)(1). "(f) SPECIAL RULES FOR APPLYING PASSIVE LOSS LIMITATIONS.— If any person holds an interest in an electing large partnership other than as a limited partner— "(1) paragraph (2) of subsection (c) shall not apply to such partner, and "(2) such partner's distributive share of the partnership items eJlocable to passive loss limitation activities shall be taken into account separately to the extent necessary to comply with the provisions of section 469. The preceding sentence shall not apply to any items allocable to an interest held as a limited partner. "SEC. 773. COMPUTATIONS AT PARTNERSHIP LEVEL. "(a) GENERAL RULE. — "(1) TAXABLE INCOME. —The taxable income of an electing large partnership shall be computed in the same manner as in the case of an individual except that— "(A) the items described in section 772(a) shall be separately stated, and Applicability. "(B) the modifications of subsection (b) shall apply. "(2) ELECTIONS. — All elections affecting the computation of the taxable income of an electing large partnership or the computation of any credit of an electing large partnership shall be made by the partnership; except that the election under section 901, and Einy election under section 108, shall be made by each partner separately. " (3) LIMITATIONS, ETC.— "(A) IN GENERAL.— Except as provided in subparagraph (B), all limitations and other provisions affecting the computation of the taxable income of an electing large partnership or the computation of any credit of an electing large

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