Page:United States Statutes at Large Volume 89.djvu/101

 PUBLIC LAW 94-12—MAR. 29, 1975

8 9 STAT. 4 1

year of the taxpayer in which construction begins (or,^ if later, at the close of the first taxable year to which an election under this subsection applies). " (B) NORMAL CONSTRUCTION PERIOD.—For purposes of sub-

paragraph (A), the term 'normal construction period' means the period reasonably expected to be required for the construction of the property— " (i) beginning with the date on which physical work on the construction begins (or, if later, the first d a y of the first taxable year to which an election under this subsection applies), and " ( i i) ending on the date on which it is expected that the property will be available for placing in service. " (3) QUALIFIED PROGRESS EXPENDITURES DEEINED.—For purposes

of this subsection— "(A)

SELF-CONSTRUCTED PROPERTY.—In the case of

any

self-constructed property, the term 'qualified progress expenditures' means the amount which, for purposes of this subpart, is, properly chargeable ( during such taxable year) to capital account with respect to such property. "(B)

NON-SELF-CONSTRUCI'ED PROPERTY.—In

the

case of

non-self-constructed property, the term 'qualified progress expenditures' means the lesser of— " (i) the amount paid during the taxable year to another person for the construction of such property, or " ( i i) the amount which represents that proportion of the overall cost to the taxpayer of the construction by such other person which is properly attributable to that portion of such construction which is completed during such taxable year. "(4)

SPECIAL RULES FOR APPLYING PARAGRAPH (3). — For p u r -

poses of paragraph (3) — "(A)

COMPONENT PARTS, E T C. — Property which is to be a

component part of, or is otherwise to be included in, any progress expenditure property shall be taken into account— " (i) a t a time not earlier than the time a t which it becomes irrevocably devoted to use in the progress expenditure property, and " ( i i) as if ( a t the time referred to in clause (i)) the tax p a y e r h a d expended an amount equal to that portion of the cost to the taxpayer of such component or other property which, for purposes of this subpart, is properly chargeable ( during such taxable year) to capital account with respect to such property. " (B) CERTAIN BORROWINGS DISREGARDED.—Any a m o u n t bor-

rowed directly or indirectly by the taxpayer from the person constructing the property for h i m shall not be treated as a n amount expended for such construction. " (C) CERTAIN UNUSED EXPENDITURES CARRIED OVER.—In the

case of non-self-constructed property, if for the taxable year— " (i) the amount under clause (i) of paragraph (3)(B) exceeds the amount under clause (ii) of paragraph (3) (B), then the amount of such excess shall be taken into account under such clause (i) for the succeeding taxable year, or " ( i i) the amount under clause (ii) of paragraph (3) (B) exceeds the amount under clause (i) of paragraph

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