Page:United States Statutes at Large Volume 83.djvu/611

 83 STAT. ]

PUBLIC LAW 91-172-DEC. 30, 1969

583

" (C) INVESTMENT EXPENSES.—The term 'investment expenses' means the deductions allowable under sections 164(a)(1) or (2), 166, 167, 171, 212, 243, 244, 245, or 611 78 Stat. 4o, 52, directly connected with the production of investment income. 207-^80 s t a*1558, ^* t 50For purposes of this subparagraph, the deduction allowable under section 167 with respect to any property may be treated ^°sf, pp. 625, as the amount which would have been allowable had the tax- ^^^' payer depreciated the property under the straight line method for each taxable year of its useful life for which the taxpayer has held the property, and the deduction allowable under section 611 with respect to any property may be treated as the amount which would have been allowable had the taxpayer determined the deduction under section 611 without regard to section 613 for each taxable year for which ^°®'' PP- ^29, the taxpayer has held the property. " (D) INVESTMENT INTEREST EXPENSE.—The term 'investment interest expense' means interest paid or accrued on indebtedness incurred or continued to purchase or carry property held for investment. For purposes of the preceding sentence, interest paid or accrued on indebtedness incurred or, continued in the construction of property to be used in a trade or business shall not be treated as an investment interest expense. "(3) PROPERTY SUBJECT TO NET LEASE.—For purposes of this subsection, property which is subject to a net lease entered into after October 9, 1969, shall be treated as property held for invest• '• ment, and not as property used in a trade or business. '/ "(c) NET LEASES.—For purposes of this section, property shall be considered to be subject to a net lease for a taxable year if— "(1) for such taxable year the sum of the deductions with respect to such property which are allowable solely by reason of section 162 is less than 15 percent of the rental income produced ^°^'' P- ^^°by such property, or " (2) the lessor is either guaranteed a specified return or is guaranteed in whole or in part against loss of income. -SEC. 58. RULES FOR APPLICATION OF THIS PART. "(a) HUSBAND AND W I F E. — I n the case of a husband or wife who files a separate return for the taxable year, the $30,000 amount specified in section 56 shall be $15,000. "(b) MEMBERS or CONTROLLED GROUPS.—In the case of a controlled group of corporations (as defined in section 1563(a)), the $30,000 Post,p.602. amount specified in section 56 shall be divided equally among the component members of such group unless all component members consent (at such time and in such manner as the Secretary or his delegate prescribes by regulations) to an apportionment plan providing for an unequal allocation of such amount. "(c) ESTATES AND TRUSTS.—In the case of an estate or trust— "(1) the sum of the items of tax preference for any taxable year of the estate or trust shall be apportioned between the estate or trust and the beneficiaries on the basis of the income of the estate Or trust allocable to each, and "(2) the $30,000 amount specified in section 56 applicable to such estate or trust shall be reduced to an amount which bears the same ratio to $30,000 as the portion of the sum of the items of tax preference allocated to the estate or trust under paragraph (1) ^ bears to such sum. (d) ELECTING S M A L L B U S I N E S S CORPORATIONS AND THE I R S II A R E H0IJ)ERS.—

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