Page:United States Statutes at Large Volume 80 Part 1.djvu/1549

 80 STAT.]

PUBLIC LAW 89-800-NOV. 8, 1966

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"(2) APPLICABLE RULES.—Under regulations prescribed by the Secretary or his delegate, rules similar to the rules provided by paragraphs (2) and (3) of subsection (c) shall be applied for purposes of this subsection. Subsection (d) shall not apply with respect to any item to which this subsection applies. " (j) SUSPENSION PERIOD.—For purposes of this subpart, the term 'suspension period' means the period beginning on October 10, 1966, and ending on December 31, 1967." (b) Section 48(d) of such Code (relating to certain leased property) 76 Stat. 967. is amended by adding at the end thereof the following new sentences: " I n the case of suspension period property which is leased and is property of a kind which the lessor ordinarily leases to one lessee for a substantial portion of the useful life of the property, the lessor of the property shall be deemed to have elected to treat the first such lessee as having acquired such property for purposes of applying the last sentence of section 4 6 (a)(2). In the case of section 38 property which (i) is leased after October 9, 1966 (other than pursuant to a binding contract to lease entered into before October 10, 1966), (ii) is not suspension period property with respect to the lessor but is suspension period property if acquired by the lessee, and (iii) is property of the same kind which the lessor ordinarily sold to customers before October 10, 1966, or ordinarily leased before such date and made an election under this subsection, the lessor of such property shall be deemed to have made an election under this subsection with respect to such property." SEC. 2. Section 167 of the Internal Revenue Code of 1954 (relating y^l^^^^^'^^^^^' to depreciation) is amended by redesignating subsection (i) as subsection (j) and by inserting after subsection (h) the following new subsection: "(i) LIMITATION IN CASE OF PROPERTY CONSTRUCTED OR ACQUIRED DURING THE SUSPENSION PERIOD.—

"(1) IN GENERAL.—Under regulations prescribed by the Secretary or his delegate, paragraphs (2), (3), and (4) of subsection (b) shall not apply in the case of real property which is not section 38 property (as defined in section 48(a)) if— " (A) the physical construction, reconstruction, or erection of such property by any person begins during the suspension period, or " (B) an order for such construction, reconstruction, or erection is placed by any person during the suspension period. Under regulations prescribed by the Secretary or his delegate, rules similar to the rules provided by paragraphs (3), (4), (7), (8), (9), and (10) of section 48(h) shall be applied for purposes of the preceding sentence. "(2) EXCEPTION.—Paragraph (1) shall not apply to any item of real property selected by the taxpayer if the cost of such property (when added to the cost of all other items of real property selected by the taxpayer under this paragraph) does not exceed $50,000. Under regulations prescribed by the Secretary or his delegate, rules similar to the rules provided by paragraph (2) of section 48(c) shall be applied for purposes of this paragraph. "(3) SUSPENSION PERIOD.—For purposes of this subsection, the

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