Page:United States Statutes at Large Volume 98 Part 1.djvu/558

 98 STAT. 510

PUBLIC LAW 98-369—JULY 18, 1984 tion (k) and by inserting after subsection (i) the following new subsection: "(j) PROPERTY LEASED TO GOVERNMENTS AND OTHER TAX-EXEMPT ENTITIES.—

"(1) IN GENERAL.—Notwithstanding any other provision of this section, the deduction allowed under subsection (a) (and any other deduction allowable for depreciation or amortization) for any taxable year with respect to tax-exempt use property shall be determined— "(A) by using the straight-line method (without regard to salvage value), and "(B) by using a recovery period determined under the following table: "In the case of: The recovery period shall be: (I) Property not described in subclause (II) or subclause (III) The present class life. (II) Personal property with no present class life 12 years. (III) 18-year real property 40 years. "(2) OPERATING RULES.— "(A) RECOVERY PERIOD MUST AT LEAST EQUAL 125 PERCENT OF LEASE TERM.—In the case of any tax-exempt use prop-

erty, the recovery period used for purposes of paragraph (1) shall not be less than 125 percent of the lease term. "(B) CONVENTIONS.— "(i) PROPERTY OTHER THAN 18-YEAR REAL PROPERTY.—

In the case of property other than 18-year real property, the half-year convention shall apply for purposes of paragraph (1). (ii) 18-YEAR REAL PROPERTY.—In the case of 18-year real property, the amount determined under paragraph (1) shall be determined on the basis of the number of months (using a mid-month, convention) in the year in which the property is in service. "(C)

EXCEPTION WHERE LONGER RECOVERY PERIOD AP-

PLIES.—Paragraph (1) shall not apply to any recovery property if the recovery period which applies to such property (without regard to this subsection) exceeds the recovery period for such property determined under this subsection. "(D) DETERMINATION OF CLASS FOR REAL PROPERTY WHICH

Ante, p. 494.

IS NOT RECOVERY PROPERTY.—In the case of any real property which is not recovery property, for purposes of this subsection, the determination of whether such property is 18-year real property shall be made as if such property were recovery property. " (E) COORDINATION WITH SUBSECTION (f) (12).—Paragraph (12) of subsection (f) shall not apply to any tax-exempt use property to which this subsection applies. "(F) 18-YEAR REAL PROPERTY.—For purposes of this subsection, the term '18-year real property' includes— "(i) low-income housing, and "(ii) any property which was treated as 15-year real property under this section (as in effect before the . jros ifi - : amendments made by the Tax Reform Act of 1984).

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