Page:United States Statutes at Large Volume 95.djvu/248

 95 STAT. 222 26 USC 167

^°^26 USC 167 At 203 ^' ^'

PUBLIC LAW 97-34—AUG. 13, 1981 (2) CHANGE IN METHOD OP ACCOUNTING.—Sections 446 and 481

of the Internal Revenue Code of 1954 shall not apply to the change in the method of depreciation to comply with the provisions of this subsection. (3) TRANSITIONAL RULE.—The adjusted basis of RRB property ^^^ defined in section 168(g)(6) of such Code) as of December 31, 1980, shall be depreciated using a useful life of no less than 5 years and no more than 50 years and a method described in section 167(b) of such Code, including the method described in section 167(b)(2) of such Code, switching to the method described in section 167(b)(3) of such Code at a time to maximize the deduction. (d) AGREEMENT AS TO USEFUL LIFE ON WHICH DEPRECIATION RATE IS

26 USC 167. 26 USC 167 note. 26 USC 1 et seq.

BASED.—Subsection (d) of section 167 is amended by adding at the end thereof the following: "This subsection shall not apply with respect to recovery property defined in section 168." (e) CONFORMING AMENDMENT.—The Secretary of Health and Human Services is not required to apply any provision of the Internal Revenue Code of 1954, as amended, in calculating depreciation (for the purpose of determining any cost under a program administered by the Secretary), unless a provision of law requires so expressly. SEC. 204. RECAPTURE ON DISPOSITION OF RECOVERY PROPERTY.

26 USC 1245.

(a) GENERAL RULE.—Paragraph (1) of section 1245(a) (relating to ordinary income) is amended by inserting after "December 31, 1962," the following "or section 1245 recovery property is disposed of after December 31, 1980,". (b) RECOMPUTED BASIS.—Paragraph (2) of section 1245(a) (relating to recomputed basis) is amended— (1) by striking out "or" at the end of subparagraph (C), (2) by inserting ", or" at the end of subparagraph (D), and (3) by inserting immediately after subparagraph (D) the following new subparagraph: "(E) with respect to any section 1245 recovery property, the adjusted basis of such property recomputed by adding thereto all adjustments attributable to periods for which a deduction is allowed under section 168(a) (as added by the Economic Recovery Tax Act of 1981) with respect to such property,". (c) SECTION 1245 RECOVERY PROPERTY DEFINED.—Subsection (a) of

section 1245 is amended by adding at the end thereof the following new paragraph: "(5) SECTION 1245 RECOVERY PROPERTY.—For purposes of this section, the term 'section 1245 recovery property' means recovery property (within the meaning of section 168) other than— "(A) 15-year real property which is residential rental property (as defined in section 167(j)(2)(B)), "(B) 15-year real property which is described in section 168(f)(2), "(C) 15-year real property with respect to which an election under subsection (b)(3) of section 168 to use a different recovery percentage is in effect, and "(D) 15-year real property which is described in clause (i), (ii), (iii), or (iv) of section 1250(a)(1)(B). If only a portion of a building (or other structure) is section 1245 recovery property, gain from any disposition of such building (or other structure) shall be allocated first to the portion of the building (or other structure) which is section 1245 recovery

�