Page:United States Statutes at Large Volume 118.djvu/1458

 118 STAT. 1428 PUBLIC LAW 108–357—OCT. 22, 2004 ‘‘(A) IN GENERAL.—All members of an expanded affili ated group shall be treated as a single corporation for purposes of this section. ‘‘(B) EXPANDED AFFILIATED GROUP.—For purposes of this section, the term ‘expanded affiliated group’ means an affiliated group as defined in section 1504(a), determined— ‘‘(i) by substituting ‘50 percent’ for ‘80 percent’ each place it appears, and ‘‘(ii) without regard to paragraphs (2) and (4) of section 1504(b). ‘‘(C) ALLOCATION OF DEDUCTION.—Except as provided in regulations, the deduction under subsection (a) shall be allocated among the members of the expanded affiliated group in proportion to each member’s respective amount (if any) of qualified production activities income. ‘‘(5) TRADE OR BUSINESS REQUIREMENT.—This section shall be applied by only taking into account items which are attrib utable to the actual conduct of a trade or business. ‘‘(6) COORDINATION WITH MINIMUM TAX.—The deduction under this section shall be allowed for purposes of the tax imposed by section 55; except that for purposes of section 55, the deduction under subsection (a) shall be 9 percent of the lesser of— ‘‘(A) qualified production activities income (determined without regard to part IV of subchapter A), or ‘‘(B) alternative minimum taxable income (determined without regard to this section) for the taxable year. In the case of an individual, subparagraph (B) shall be applied by substituting ‘adjusted gross income’ for ‘alternative min imum taxable income’. For purposes of the preceding sentence, adjusted gross income shall be determined in the same manner as provided in paragraph (2). ‘‘(7) REGULATIONS.—The Secretary shall prescribe such regulations as are necessary to carry out the purposes of this section.’’. (b) MINIMUM TAX.—Section 56(g)(4)(C) (relating to disallowance of items not deductible in computing earnings and profits) is amended by adding at the end the following new clause: ‘‘(v) DEDUCTION FOR DOMESTIC PRODUCTION.— Clause (i) shall not apply to any amount allowable as a deduction under section 199.’’. (c) SPECIAL RULE RELATING TO ELECTION TO TREAT CUTTING OF TIMBER AS A SALE OR EXCHANGE.—Any election under section 631(a) of the Internal Revenue Code of 1986 made for a taxable year ending on or before the date of the enactment of this Act may be revoked by the taxpayer for any taxable year ending after such date. For purposes of determining whether such taxpayer may make a further election under such section, such election (and any revocation under this section) shall not be taken into account. (d) TECHNICAL AMENDMENTS.— (1) Sections 86(b)(2)(A), 135(c)(4)(A), 137(b)(3)(A), and 219(g)(3)(A)(ii) are each amended by inserting ‘‘199,’’ before ‘‘221’’. (2) Clause (i) of section 221(b)(2)(C) is amended by inserting by inserting ‘‘199,’’ before ‘‘222’’. 26 USC 631 note.

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