Page:United States Statutes at Large Volume 95.djvu/254

 95 STAT. 228 26 USC 46.

PUBLIC LAW 97-34—AUG. 13, 1981 Q) jjj GENERAL.—Paragraph (1) of section 46(d) (defining qualified progress expenditures) is amended to read as follows: "(1) INCREASE IN QUALIFIED INVESTMENT.—

"(A) IN GENERAL.—In the case of any taxpayer who has made an election under paragraph (6), the amount of the qualified investment of such taxpayer for the taxable year (determined under subsection (c) without regard to this subsection) shall be increased by an amount equal to the aggregate of the applicable percentage of each qualified progress expenditure for the taxable year with respect to progress expenditure property. "(B) APPLICABLE PERCENTAGE.—

"(i) RECOVERY PROPERTY.—For purposes of subpara-

Ante, p. 203.

graph (A), the applicable percentage for recovery property (within the meaning of section 168) shall be determined under subsection (c)(7) based on a reasonable expectation of what the character of the property will be when it is placed in service. "(ii) NONRECOVERY PROPERTY.—For purposes of subparagraph (A), the applicable percentage for property which is not recovery property (within the meaning of section 168) shall be determined under subsection (c)(2) based on a reasonable expectation of what the useful life of the property will be when it is placed in service, "(iii) APPLICATION ON BASIS OF FACTS KNOWN.—Clauses

(i) and (ii) shall be applied on the basis of the facts known at the close of the tsixable year of the taxpayer in which the expenditure is made." (2) CONFORMING AMENDMENT.—Clause (ii) of section 46(d)(2)(A) (defining progress expenditure property) is amended by striking out "having a useful life of 7 years or more". (c) PETROLEUM PRODUCT STORAGE FACILITIES.—Paragraph (1) of

26 USC 48.

section 48(a) (defining section 38 property) is amended— (1) by striking out the period at the end of subparagraph (F) and inserting in lieu thereof ", or"; and (2) by inserting immediately after subparagraph (F) the following new subparagraph: "(G) a storage facility used in connection with the distribution of petroleum or any primary product of petroleum." (d) TECHNICAL AMENDMENT RELATING TO NONCORPORATE LES-

SORS.—Paragraph (3) of section 46(e) (relating to limitations on noncorporate lessors) is amended by adding at the end thereof the following new sentence: "For purposes of subparagraph (B), in the case of any recovery property (within the meaning of section 168), the useful life shall be the present class life for such property (as defined in section 168(g)(2))." (e) CONFORMING AMENDMENTS.—

(1) The heading and so much of paragraph (2) of section 46(c) as precedes the table is amended to read as follows: "(2) APPLICABLE PERCENTAGE IN CERTAIN CASES.—Except as

provided in paragraphs (3), (6), and (7), the applicable percentage for purposes of paragraph (1) for any property shall be determined under the following table:". (2) Subparagraph (A) of section 46(c)(6) (relating to special rules for commuter highway vehicles) is amended to read as follows: "(A) IN GENERAL.—Notwithstanding paragraph (2) or (3), in the case of a commuter highway vehicle the useful life of which is 3 years or more, or which is recovery property

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