Page:United States Statutes at Large Volume 95.djvu/233

 PUBLIC LAW 97-34—AUG. 13, 1981

95 STAT. 207

which is not 3-year property, 10-year property, or 15-year public utility property. "(C) 10-YEAR PROPERTY.—The term '10-year property' means— "(i) public utility property (other than section 1250 26 USC 1250. class property or 3-year property) with a present class life of more than 18 years but not more than 25 years; and "(ii) section 1250 class property with a present class life of 12.5 years or less. "(D) 15-YEAR REAL PROPERTY.—The term '15-year real property' means section 1250 class property which does not have a present class life of 12.5 years or less. "(E) 15-YEAR PUBLIC UTILITY PROPERTY.—The term '15-year public utility property' means public utility property (other than section 125 class property or 3-year property) with a present class life of more than 25 years. '(d) UNADJUSTED BASIS; ADJUSTMENTS.— "(1) UNADJUSTED BASIS DEFINED.—

"(A) IN GENERAL.—For purposes of this section, the term 'unadjusted basis' means the excess of— "(i) the basis of the property determined under part II of subchapter O of chapter 1 for purposes of determining gain (determined without regard to the adjustments described in paragraph (2) or (3) of section 1016(a)), over "(ii) the sum of— "(I) that portion of the basis for which the taxpayer properly elects amortization (including the deduction allowed under section 167(k)) in lieu of depreciation, and (II) that portion of the basis which the taxpayer properly elects to treat as an expense under section 179. "(B) TIME FOR TAKING BASIS INTO ACCOUNT.—

"(i) IN GENERAL.—The unadjusted basis of property shall be first taken into account under subsection (b) for the taxable year in which the property is placed in service. "(ii) REDETERMINATIONS.—The Secretary shall by regulation provide for the method of determining the deduction allowable under subsection (a) for any taxable year (and succeeding taxable years) in which the basis is redetermined (including any reduction under section 1017). "(2) DISPOSITIONS.— "(A) MASS ASSET ACCOUNTS.—In

lieu of recognizing gain or loss under this chapter, a taxpayer who maintains one or more mass asset accounts of recovery property may, under regulations prescribed by the Secretary, elect to include in income all proceeds realized on the disposition of such property. "(B) ADJUSTMENT TO BASIS.—Except as provided under regulations prescribed by the Secretary under subsection (f)(7), if any recovery property (other than 15-year real property or property with respect to which an election under subparagraph (A) is made) is disposed of, the unadjusted basis of such property shall cease to be taken into account in determining any recovery deduction allowable under subsec-

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