Page:United States Statutes at Large Volume 88 Part 2.djvu/796

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PUBLIC LAW 93-625-JAN. 3, 1975

26 USC 162 note.

26 USC 167 note.

26"use 1250.

26 USC 167.

26 USC

167

note.

26 USC 1250,

26 USC

167

note.

[88 STAT.

(2) If the taxpayer maintained an account for vacation pay under section 97 of the Technical Amendments Act of 1958, as amended, for his last taxable year ending before January 1, 1973, the amendments made by this section shall apply to taxable years ending after December 31, 1972. SEC. 5. APPLICATION OF CLASS LIFE SYSTEM TO REAL PROPERTY. (a) GENERAL RULE. — I n the case of buildings and other items of

section 1250 property (within the meaning of section 1250(c) of the Internal Revenue Code of 1954) placed in service before the effective date of the class lives first prescribed by the Secretary of the Treasury or his delegate under section 167(m) of such Code for the class in which such property falls, if an election under such section 167(m) applies to the taxpayer for the taxable year in which such property is placed in service, the taxpayer may, in accordance with regulations prescribed by the Secretary of the Treasury or his delegate, elect to determine the useful life of such property— (1) under Revenue Procedure 62-21 (as amended and supplemented) as in effect on December 31, 1970, or (2) on the facts and circumstances. (b) REPEAL OF PRIOR TRANSITIONAL RULE. — Paragraph (1) of section 109(e) of the Revenue Act of 1971 (Public Law 92-178) is hereby repealed. (c)

CONFORMING

AMENDMENT.—Section

1250(a)(1)(C) (ii)

is

amended by striking "January 1, 1975" and in lieu thereof inserting "January 1, 1976". (d) EFFECTIVE DATE.—The amendments made by this section shall apply with respect to property placed in service after December 31, 1973.

SEC. 6 REAL ESTATE INVESTMENT TRUSTS; TREATMENT OF FORE. CLOSURE PROPERTY. 26 USC 856.

(a) FORECLOSURE PROPERTY.—Section 856 (defining real estate investment trust) is amended by adding at the end thereof the following new subsection: " (e) SPECIAL RULES FOR FORECLOSURE PROPERTY.— "(1) FORECLOSURE PROPERTY DEFINED.—For purposes of this

part, the term 'foreclosure property' means any real property (including interests in real property), and any personal property incident to such real property, acquired by the real estate investment trust as the result of such trust having bid in such property at foreclosure, or having otherwise reduced such property to ownership or possession by agreement or process of law, after there was default (or default was imminent) on a lease of such property or on an indebtedness which such property secured. "(2)

GRACE PERIOD.—Except as provided in paragraph

(3),

property shall cease to be foreclosure property with respect to the real estate investment trust on the date which is 2 years after the date such trust acquired such property. "(3) EXTENSIONS.—If the real estate investment trust establishes to the satisfaction of the Secretary or his delegate that an extension of the grace period is necessary for the orderly liquidation of the trust's interest in such property, the Secretary or his delegate may extend the grace period for such property. Any such extension shall be for a period of not more than 1 year, and not more than 2 extensions shall be granted with respect to any property. "(4)

TERMINATION OF GRACE PERIOD I N CERTAIN CASES.—Any

foreclosure property shall cease to be such on the first day (occur-

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