Page:United States Statutes at Large Volume 76.djvu/1017

 76 STAT. 3

PUBLIC LAW 8 7 - 8 3 4 - O C T. 16, 1962

969

items to be taken into account, but only to the extent of an aggregate cost of $50,000. Such a selection, once made, may be changed only in the manner, and to the extent, provided by such regulations. " (B) MARRIED INDIVIDUALS.—In the case of a husband or wife who files a separate return, the limitation under subparagraph (A) shall be $25,000 in lieu of $50,000. This subpara- Ante, p. 968. graph shall not apply if the spouse of the taxpayer has no used section 38 property which may be taken into account as qualified investment for the taxable year of such spouse which ends within or with the taxpayer's taxable year. " (C) AFFILIATED GROUPS.—In the case of an affiliated group, the $50,000 amount specified under subparagraph (A) shall be reduced for each member of the group by apportioning $50,000 among the members of such group in accordance with their respective amounts of used section 38 property which Ante, pp. 962, 968. may be taken into account. " (D) PARTNERSHIPS.—In the case of a jiartnership, the limitation contained in subparagraph (A) shall apply with respect to the partnership and with respect to each partner. "(3) DEFINITIONS.—For purposes of this subsection— " (A) PURCHASE.—The term 'purchase' has the meaning assigned to such term by section 179(d)(2). 26 USC 179. " (B) COST.—The cost of used section 38 property does not include so much of the basis of such property as is determined by reference to the adjusted basis of other property held at any time by the person acquiring such property. If property is disposed of (other than by reason of its destruction or damagelby fire, storm, shipwreck, or other casualty, or its theft) and used section 38 property similar or related in service or use is acquired as a replacement therefor in a transaction to which the preceding sentence does not apply, the cost of the used section 38 property acquired shall be its basis reduced by the adjusted basis of the property replaced. The cost of used section 38 property shall not be reduced with respect to the adjusted basis of any property disposed of if, by reason of section 47, such disposition involved an in- Ante, p. 966. crease of tax or a reduction of the unused credit carrybacks or carryovers described in section 46(b). Ante, p. 963. " (C) AFFILIATED GROUP.—The term 'affiliated group' has the meaning assigned to such term by section 1504(a), except 26 USC 1504. that— " (i) the phrase 'more than 50 percent' shall be substituted for the phrase 'at least 80 percent' each place it appears in section 1504(a), and "(ii) all corporations shall be treated as includible corporations (without any exclusion under section 1504(b)). " (d) CERTAIN LEASED PROPERTY.—A person (other than a person refeiTed to in section 46(d)) who is a lessor of property may (at such Ante, p. 965. time, in such manner, and subject to such conditions as are provided by regulations prescribed by the Secretary or his delegate) elect with respect to any new section 38 property to treat the lessee as having acquired such property for an amount equal to— "(1) if such property was constructed by the lessor (or by a corporation which controls or is controlled by the lessor within the meaning of section 368(c)), the fair market value of such 26 USC 368. property, or "(2) if paragraph (1) does not apply, the basis of such property to the lessor.

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