Page:United States Statutes at Large Volume 92 Part 3.djvu/185

 PUBLIC LAW 95-600—NOV. 6, 1978

92 STAT. 2817

"(B) an amount equal to the amount so included in gross income shall be treated as a deduction allocable to such activity for the first succeeding taxable year. "(2) LIMITATION.—The excess referred to in paragraph (1) shall not exceed— "(A) the aggregate amount of the reductions required by subsection (b)(5) with respect to the activity for all prior taxable years beginning after December 31, 1978, reduced by "(B) the amounts previously included in gross income with respect to such activity under this subsection." SEC. 204. EFFECTIVE DATES. 26 USC 465 (a) IN GENERAL.—The amendments made by this subtitle shall apply to taxable years beginning after December 31, 1978. (b) TRANSITIONAL RULES.— (1) RECAPTURE PROVISIONS.—If the amount for which the tax-

payer is at risk in any activity as of the close of the taxpayer's last taxable year beginning before January 1, 1979, is less than zero, section 465(e)(1) of the Internal Revenue Code of 1954 (as ^"-te, p- 2816. added by section 203 of this Act) shall be applied with respect to such activity of the taxpayer by substituting such negative amount for zero. (2) SPECIAL TRANSITIONAL RULES FOR LEASING ACTIVITIES.— (A) RULE FOR LEASES.—In the case of any activity described

in section 465(c)(1)(C) of such Code in which a corporation described in section 465(a)(l)(C) of such Code is engaged, the amendments made by this section shall not apply with respect to— (i) leases entered into before November 1, 1978, and (ii) leases where the property was ordered by the lessor or lessee before November 1, 1978. (B) HOLDING OF INTERESTS FOR PURPOSES OF SUBPARAGRAPH (A).—Subparagraph (A) shall apply only to taxpayers who held their interests in the property on October 31, 1978.

Subtitle B—Partnership Provisions SEC. 211. PENALTY FOR FAILURE TO FILE PARTNERSHIP RETURN. (a) GENERAL RULE.—Subchapter B of chapter 68 (relating to assessable penalties) is amended by adding at the end thereof the following new section: "SEC. 6698. FAILURE TO FILE PARTNERSHIP RETURN. "(a) GENERAL RULE.—In addition to the penalty imposed by section 7203 (relating to willful failure to file return, supply information, or pay tax), if any partnership required to file a return under section 6031 for any taxable year— "(1) fails to file such return at the time prescribed therefor (determined with regard to any extension of time for filing), or "(2) files a return which fails to show the information required under section 6031, such partnership shall be liable for a penalty determined under subsection (b) for each month (or fraction thereof) during which such failure continues (but not to exceed 5 months), unless it is shown that such failure is due to reasonable cause.

26 USC 6698. 26 USC 7203. 26 USC 6031.

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