Page:United States Statutes at Large Volume 111 Part 1.djvu/1032

 Ill STAT. 1008 PUBLIC LAW 105-34—AUG. 5, 1997 "(1) IN GENERAL.—In the case of a disqualified person, the treatment under this chapter of such person's distributive share of any item of income, gain, loss, deduction, or credit attributable to any partnership oil or gas property shall be determined without regard to this part. Such person's distributive share of any such items shall be excluded for purposes of making determinations under sections 772 and 773. " (2) DISQUALIFIED PERSON. —For purposes of paragraph (1), the term 'disqualified person' means, with respect to any partnership taxable year— "(A) any person referred to in paragraph (2) or (4) of section 613A(d) for such person's taxable year in which such partnership taxable year ends, and "(B) any other person if such person's average daily production of domestic crude oil and natural gas for such person's taxable year in which such partnership taxable year ends exceeds 500 barrels. "(3) AVERAGE DAILY PRODUCTION.—For purposes of paragraph (2), a person's average daily production of domestic crude oil and natural gas for any taxable year shall be computed as provided in section 613A(c)(2)— "(A) by taking into account all production of domestic crude oil and natural gas (including such person's proportionate share of any production of a partnership), "(B) by treating 6,000 cubic feet of natural gas as a barrel of crude oil, and "(C) by treating as 1 person all persons treated as 1 taxpayer under section 613A(c)(8) or among whom allocations are required under such section. "SEC. 777. REGULATIONS. "The Secretary shall prescribe such regulations as may be appropriate to carry out the purposes of this part.". (b) CLERICAL AMENDMENT.— The table of parts for subchapter K of chapter 1 is amended by adding at the end the following new item: "Part IV. Special rules for electing large partnerships.". 26 USC 771 note. (c) EFFECTIVE DATE. —The amendments made by this section shall apply to partnership taxable years beginning after December 31, 1997. SEC. 1222. SIMPLIFIED AUDIT PROCEDURES FOR ELECTING LARGE PARTNERSfflPS. (a) GENERAL RULE. —Chapter 63 is amended by adding at the end thereof the following new subchapter: ^'Subchapter D—Treatment of electing large partnerships "Part I. Treatment of partnership items and adjustments. "Part II. Partnership level adjustments. "Part III. Definitions and special rules. "PART I—TREATMENT OF PARTNERSHIP ITEMS AND ADJUSTMENTS "Sec. 6240. Application of subchapter. "Sec. 6241. Partner's return must be consistent with partnership return. "Sec. 6242. Procedures for taking partnership adjustments into account.

�