Page:United States Statutes at Large Volume 90 Part 2.djvu/127

 I PUBLIC LAW 94-455—OCT. 4, 1976

9 0 STAT. 1595

deduction under section 167 of such Code would equal or exceed 90 percent of the basis of such property (adjusted for any partial dispositions), (B) for purposes of section 4 6 (c)(1) of such Code, the 26 USC 46. basis of the property shall be determined by taking into account the total production costs (within the meaning of section 4 8 (k)(5)(B) of such Code), (C) for purposes of section 48(a)(2) of such Code, such film shall be considered to be used predominantly outside the United States in the first taxable year for which 50 percent or more of the gross revenues received or accrued during the taxable year from showing the film were received or accrued from showing the film outside the United States, and (D) Section 4 7 (a)(7) of such Code shall apply. (2) ELECTION OF 4O-PERCENT METHOD.—

(A) IN GENERAL.—A taxpayer may elect to have this paragraph apply to all (jualified films placed in service during taxable years beginning before January 1, 1975 (other than films to which an election under subsection (e)(2) of this section applies). (B) E F F E C T OF ELECTION.—If the taxpayer makes an election under this paragraph, then section 48(k) of the Internal Revenue Code of 1954 shall apply to all qualified films described in subparagraph (A) with the following modifications: (i) subparagraph (B) of paragraph (4) shall not apply, but in determining qualified investment under section 46(c)(1) of such Code, there shall be used (in lieu of the basis of such property) an amount equal to 40 percent of the aggregate production costs (witliin the meaning of paragraph (5)(B) of such section 4 8 (k)), (ii) paragraph (2) shall be applied by substituting "100 percent"' for "662/3 percent", and (iii) paragraph (3) and paragraph (5) (other than subparagraph (B)) shall not apply. (C)

RULES RELATING TO ELECTIONS.—An election under

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Regulations,

this paragraph shall be made not later than the day which is 6 months after the date of the enactment of this Act and shall be made in such manner as the Secretary of the Treasury or his delegate shall by regulations prescribe. Such an election may be revoked only with the consent of the Secretary of the Treasury or his delegate, (D)

THE TAXPAYER MUST CONSENT TO J O I N I N CERTAIN

PROCEEDINGS.—No election may be made under this paragraph or subsection (e)(2) by any taxpayer unless he consents, under regulations prescribed by the Secretary of the Treasury or his delegate, to treat the determination of the investment credit allowable on each film subject to an election as a separate cause of action, and to join in any judicial proceeding for determining the person entitled to, and the amount of, the credit allowable under section 38 of the I n t e r n a l Revenue Code of 1954 with respect to any film covered by such election. (3) ELECTION TO HAVE CREDIT DETERMINED I N ACCORDANCE W I T H PREVIOUS LITIGATION.—

(A) IN GENERAL.—A tax p a y e r described in subparagraph (B) may elect to have this paragraph apply to all films (whether o r not qualified) placed in service in taxable years

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