Page:United States Statutes at Large Volume 90 Part 2.djvu/126

 90 STAT. 1594

PUBLIC LAW 94-455—OCT. 4, 1976 " ( i i) Amounts for equipment and supplies shall be allocated to the country i n which, with respect to the production of the film, the predominant use occurs. " ( i i i) A l l other items shall be allocated under regulations prescribed by the Secretary which are consistent with the allocation principle set forth in clause ( i i). " (6) UNITED STATES.—For purposes of this subsection, the term 'United States' includes the possessions of the United States."

26 USC 47.

(b) OVERESTIMATION OF USEFUL L i F E AND DISPOSITIONS W H E R E 9 0 P E R C E N T RULE A P P L I E S. — S e c t i o n 4 7 (a) ( r e l a t i n g to certain disposi-

tions, etc., of section 38 property) is amended by adding after paragraph (6) the following new paragraph: " (7) MOTION PICTURE FILMS AND VIDEO TAPES.— " (A) DISPOSITION WHERE DEPRECIATION EXCEEDS 90 PERCENT OF BASIS OR COST.—A qualified film ( w i t h i n the m e a n i n g

Ante, p. 1591.

of section 48(k)(1)(B)) which has an applicable percentage determined under section 48(k)(3) shall cease to be section 38 property with respect to the taxpayer at the close of the first day on which the aggregate amount allowable as a deduction under section 167 equals or exceeds 90 percent of the basis or cost of such film (adjusted for any partial dispositions). "(B)

"Affiliated group."

26 USC 48 note.

Ante, p. 1591.

OTHER DISPOSITIONS.—In the case of a disposition of

the exclusive right to display a qualified film which has an applicable percentage determined under section 48(k)(3) in one or more mediums of publication or exhibition in one or more specifically defined geographical areas over the remaining initial period of commercial exploitation of the film or tape in such geographical areas, the taxpayer shall be considered to have disposed of all or part of such film or tape and shall recompute the credit earned on all of his basis or cost or on that part of the basis or cost properly allocable to that part of the film or tape disposed of. I n the case of an affiliated group of corporations, a transfer within the affiliated group shall not be treated as a disposition until there is a transfer outside the group. For purposes of the preceding sentence, the term 'affiliated g r o u p ' has the meaning given to such term by section 1504 (determined as if section 1504(b) d i d not include paragraph (3) thereof). For purposes of this paragraph, section 1504(a) shall be applied by substituting '50 percent' for '80 percent' each place it appears.". (c) ALTORNATI\'E METHODS OF COMPUTING CREDIT FOR P A S T PERIODS.— (1) GENERAL RULE FOR DETERMINING USEFUL LIFE, PREDOMINANT FOREIGN USE, E T C. — I n the case of a qualified film ( w i t h i n

the meaning of section 4 8 (k)(l)(B) of the I n t e r n a l Revenue Code of 1954) placed in service in a taxable year beginning before January 1, 1975, with respect to which neither an election under paragraph (2) of this subsection n o r an election under subsection (e)(2) applies— (A) the applicable percentage under section 4 6 (c)(2) of such Code shall be determined as if the useful life of the film would have expired a t the close of the first taxable year by the close of which the aggregate amount allowable as a

�