Page:United States Statutes at Large Volume 120.djvu/381

 120 STAT. 350

PUBLIC LAW 109–222—MAY 17, 2006 (2) EFFECTIVE DATE.—The amendments made by this subsection shall apply to allocations of State volume limit after April 5, 2006.

26 USC 143 note.

SEC. 204. CAPITAL GAINS TREATMENT FOR CERTAIN SELF-CREATED MUSICAL WORKS. 26 USC 1221.

26 USC 170 note.

(a) IN GENERAL.—Subsection (b) of section 1221 (relating to capital asset defined) is amended by redesignating paragraph (3) as paragraph (4) and by inserting after paragraph (2) the following new paragraph: ‘‘(3) SALE OR EXCHANGE OF SELF-CREATED MUSICAL WORKS.—At the election of the taxpayer, paragraphs (1) and (3) of subsection (a) shall not apply to musical compositions or copyrights in musical works sold or exchanged before January 1, 2011, by a taxpayer described in subsection (a)(3).’’. (b) LIMITATION ON CHARITABLE CONTRIBUTIONS.—Subparagraph (A) of section 170(e)(1) is amended by inserting ‘‘(determined without regard to section 1221(b)(3))’’ after ‘‘long-term capital gain’’. (c) EFFECTIVE DATE.—The amendments made by this section shall apply to sales and exchanges in taxable years beginning after the date of the enactment of this Act. SEC. 205. VESSEL TONNAGE LIMIT.

26 USC 1355 note.

(a) IN GENERAL.—Paragraph (4) of section 1355(a) (relating to qualifying vessel) is amended by inserting ‘‘(6,000, in the case of taxable years beginning after December 31, 2005, and ending before January 1, 2011)’’ after ‘‘10,000’’. (b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply to taxable years beginning after December 31, 2005. SEC. 206. MODIFICATION OF SPECIAL ARBITRAGE RULE FOR CERTAIN FUNDS.

Applicability.

In the case of bonds issued after the date of the enactment of this Act and before August 31, 2009— (1) the requirement of paragraph (1) of section 648 of the Deficit Reduction Act of 1984 (98 Stat. 941) shall be treated as met with respect to the securities or obligations referred to in such section if such securities or obligations are held in a fund the annual distributions from which cannot exceed 7 percent of the average fair market value of the assets held in such fund except to the extent distributions are necessary to pay debt service on the bond issue, and (2) paragraph (3) of such section shall be applied by substituting ‘‘distributions from’’ for ‘‘the investment earnings of’’ both places it appears. SEC. 207. AMORTIZATION OF EXPENSES INCURRED IN CREATING OR ACQUIRING MUSIC OR MUSIC COPYRIGHTS.

(a) IN GENERAL.—Section 167(g) (relating to depreciation under income forecast method) is amended by adding at the end the following new paragraph: ‘‘(8) SPECIAL RULES FOR CERTAIN MUSICAL WORKS AND COPYRIGHTS.— ‘‘(A) IN GENERAL.—If an election is in effect under this paragraph for any taxable year, then, notwithstanding paragraph (1), any expense which—

VerDate 14-DEC-2004

10:20 Jul 12, 2007

Jkt 059194

PO 00001

Frm 00348

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL001.109

APPS06

PsN: PUBL001

�