Page:United States Statutes at Large Volume 95.djvu/241

 PUBLIC LAW 97-34—AUG. 13, 1981

95 STAT. 215

described in subparagraph (B)(i)(1) shall be deemed to have entered into the lease in the course of carrying on a trade or business), and "(ii) the lessor shall be treated as the owner of the property and the lessee shall be treated as the lessee of the property. "(B) CERTAIN REQUIREMENTS MUST BE MET.—The require-

ments of this subparagraph are met if— "(i) the lessor is— "(I) a corporation (other than an electing small business corporation (within the meaning of section 1371(b)) or a personal holding company (within the 26 USC 1371. meaning of section 542(a))), "(ID a partnership all of the partners of which are corporations described in subclause (I), or "(III) a grantor trust with respect to which the grantor and all beneficiaries of the trust are described in subclause (I) or (II), "(ii) the minimum investment of the lessor— "(I) at the time the property is first placed in service under the lease, and "(II) at all times during the term of the lease, is not less than 10 percent of the adjusted basis of such property, and "(iii) the term of the lease (including any extensions) does not exceed the greater of— "(I) 90 percent of the useful life of such property for purposes of section 167, or "(II) 150 percent of the present class life of such property. "(C) No OTHER FACTORS TAKEN INTO ACCOUNT.—If the requirements of subparagraphs (A) and (B) are met with respect to any transaction described in subparagraph (A), no other factors shall be taken into account in making a determination as to whether subparagraph (A)(i) or (ii) applies with respect to such transaction. "(D) QUALIFIED LEASED PROPERTY DEFINED.—For purpOSOS

of subparagraph (A), the term 'qualified leased property' means recovery property (other than a qualified rehabilitated building within the meaning of section 48(g)(1)) which Post, p. 236. is— "(i) new section 38 property (as defined in section 48(b)) of the lessor which is leased within 3 months after such property was placed in service and which, if acquired by the lessee, would have been new section 38 property of the lessee, "(ii) property— "(I) which was new section 38 property of the lessee, "(II) which was leased within 3 months after such property was placed in service by the lessee, and "(III) with respect to which the adjusted basis of the lessor does not exceed the adjusted basis of the lessee at the time of the lease, or "(iii) property which is a qualified mass commuting vehicle (as denned in section 103(b)(9)) and which is Post, p. 349. financed in whole or in part by obligations the interest

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