Page:United States Statutes at Large Volume 95.djvu/270

 95 STAT. 244

PUBLIC LAW 97-34—AUG. 13, 1981 "(B) COMMON CONTROL.—-Under regulations prescribed by the Secretary, in determining the amount of the credit under this section— "(i) all trades or businesses (whether or not incorporated) which are under common control shall be treated as a single taxpayer, and "(ii) the credit (if any) allowable by this section to each such person shall be its proportionate share of the increase in qualified research expenses giving rise to the credit. The regulations prescribed under this subparagraph shall be based on principles similar to the principles which apply in the case of subparagraph (A). "(2) ALLOCATIONS.— "(A) PASSTHROUGH IN THE CASE OF SUBCHAPTER S CORPORATIONS, ETC.—Under regulations prescribed by the Secretary,

26 USC 52.

rules similar to the rules of subsections (d) and (e) of section 52 shall apply.

"(B) ALLOCATION IN THE CASE OP PARTNERSHIPS.—In the

case of partnerships, the credit shall be allocated among partners under regulations prescribed by the Secretary. "(3) ADJUSTMENTS FOR CERTAIN ACQUISITIONS, ETC.—Under regulations prescribed by the Secretary— "(A) ACQUISITIONS.—If, after June 30, 1980, a taxpayer acquires the major portion of a trade or business of another person (hereinsdfter in this paragraph referred to as the predecessor') or the major portion of a separate unit of a trade or business of a predecessor, then, for purposes of appl^^g this section for any taxable year ending after such acquisition, the amount of qualified research expenses paid or incurred by the taxpayer during periods before such acquisition shall be increased by so much of such expenses paid or incurred by the predecessor with respect to the acquired trade or business as is attributable to the portion of such trade or business or separate unit acquired by the taxpayer. "(B) DISPOSITIONS.—If, after June 30, 1980— "(i) a taxpayer disposes of the major portion of any trade or business or the major portion of a separate unit of a trade or business in a transaction to which subparagrai}h (A) applies, and "(ii) the taxpayer furnished the acquiring person such information as is necessary for the application of subparagraph (A), then, for purposes of applying this section for any taxable year ending after such disposition, the amount of qualified research expenses paid or incurred by the taxpayer during periods before such disposition shall be decreased by so much of such expenses as is attributable to the portion of such trade or business or separate unit disposed of by the taxpayer. "(C) INCREASE IN BASE PERIOD.—If during any of the 3 taxable years following the taxable year in which a disposition to which subparagraph (B) applies occurs, the disposing taxpayer (or a person with whom the taxpayer is required to aggregate expenditures under paragraph (1)) reimburses the acquiring person (or a person required to so aggregate expenditures with such person) for research on behsdf of the

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