Page:United States Statutes at Large Volume 98 Part 1.djvu/683

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 635

SEC. 112. RECAPTURE IN CASE OF INSTALLMENT SALES. (a) GENERAL RULE.—Subsection (i) of section 453 (relating to in-

26 USC 453.

stallment method) is amended to read as follows: "(i) RECOGNITION OF RECAPTURE INCOME IN YEAR OF DISPOSITION.—

"(1) IN GENERAL.—In the case of any installment sale of
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property to which subsection (a) applies— "(A) notwithstanding subsection (a), any recapture income shall be recognized in the year of the disposition, ^;-;; and i!i !>4i «(g) ^jjy gg^jjj jj^ excess of the recapture income shall be taken into account under the installment method. "(2) RECAPTURE INCOME.—For purposes of paragraph (1), the ' term 'recapture income' means, with respect to any installment sale, the aggregate amount which would be treated as ordinary ^ income under section 1245 or 1250 for the taxable year of the disposition if all payments to be received were received in the taxable year of disposition." (b) EFFECTIVE DATE.— 26 USC 453 note. (1) IN GENERAL.—Except as otherwise provided in this subsection, the amendments made by this section shall apply with respect to dispositions made after June 6, 1984. (2) EXCEPTION.—The amendments made by this section shall not apply with respect to any disposition conducted pursuant to a contract which was binding on March 22, 1984, and at all ^ times thereafter. (3) SPECIAL RULE FOR CERTAIN DISPOSITIONS BEFORE OCTOBER i,

1984.—The amendments made by this section shall not apply to any disposition before October 1, 1984, of all or substantially all of the personal property of a cable television business pursuant to a written offer delivered by the seller on June 20, 1984, but only if the last payment under the installment contract is due no later than October 1, 1989. SEC. 113. PROVISIONS RELATING TO SOUND RECORDINGS AND FILMS. (a) SOUND RECORDINGS.—

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(1) IN GENERAL.—Section 48 (defining section 38 property) is 26 USC 48. amended by redesignating subsection (r) as subsection (s) and by inserting after subsection (q) the following new subsection: "(r) SPECIAL RULES RELATING TO SOUND RECORDINGS.—

"(1) IN GENERAL.—For purposes of this title, in the case of any sound recording, the original use of which commences with the taxpayer, the taxpayer may elect to treat such recording as ' recovery property which is 3-year property to the extent that the taxpayer has an ownership interest in such recording. "(2) FAILURE TO MAKE ELECTION.—If a taxpayer does not make an election under paragraph (1) with respect to any sound recording— "(A) no credit shall be allowed under section 38 with Post, p. 827. 'J respect to such recording, and "(B) such recording shall not be treated as recovery s i5 w » property. I

"(3) PREDOMINANT USE TEST AND AT RISK RULES NOT TO APPLY; QUALIFIED INVESTMENT.—In the case of any sound recording—

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"(A) sections 46(c)(8), 46(c)(9), and 48(a)(2) shall not apply. Post, p. 807. and "(B) in determining the qualified investment under section 46(c)(l), there shall be used (in lieu of the basis of the i a J oi

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