Page:United States Statutes at Large Volume 98 Part 1.djvu/685

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 637

cation of this section) is amended by adding at the end thereof the following new paragraph: "(5) FILMS AND VIDEO TAPES NOT RECOVERY PROPERTY.—The

term 'recovery property' shall not include any motion picture film or video tape." (2) APPLICATION OF RECOVERY PROPERTY EXCEPTIONS.—

(A) Section 168(e) is amended by striking out "section" 26 USC 168. and inserting in lieu thereof "title" in the matter preceding paragraph (1). (B) Subparagraph (A) of section 46(c)(7) is amended by 26 USC 46. inserting "recovery" before "property" the first place it appears.

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(3) FILMS NOT SUBJECT TO INVESTMENT CREDIT AT-RISK RULES.—

Paragraph (4) of section 48(k) is amended— 26 USC 48. (A) by inserting ", section 46(c)(8), or section 46(c)(9)" after "section 48(a)(2)" in subparagraph (A), (B) by inserting "or at-risk rules" after "test" in the it.. heading thereof, and (C) by striking out "issued" and inserting in lieu thereof il3ii "used". (4) BASIS ADJUSTMENT FOR FILMS.—Section 48(q) (relating to

basis adjustment) is amended by adding at the end thereof the following new paragraph: "(6) SPECIAL RULE FOR QUALIFIED FILMS.—If a credit is allowed under section 38 with respect to any qualified film (within the Post, p. 827. meaning of subsection (k)(l)(B)) then, in lieu of any reduction under paragraph (1)— "(A) to the extent that the credit is determined with respect to any amount described in clause (v) or (vi) of subsection (k)(5)(B), any deduction allowable under this chapter with respect to such amount shall be reduced by 50 percent of the amount of the credit so determined, and "(B) the basis of the taxpayer's ownership interest (within the meaning of subsection (k)(l)(C)) shall be reduced by the excess of^ "(i) 50 percent of the amount of the credit determined under subsection (k), over "(ii) the amount of the reduction under subparagraph (A)."

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(c) EFFECTIVE DATES.— (1) SOUND RECORDINGS.—The

amendments made by subsection 26 USC 48 note. (a) shall apply to property placed in service after March 15, 1984, in taxable years ending after such date. (2) FILMS AND OTHER PROPERTY.—

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26 USC 168 note.

(A) The amendments made by paragraphs (1) of subsection (b) shall apply to any motion picture film or video tape placed in service before, on, or after the date of the enactment of this Act, except that such amendment shall not apply to— (i) any qualified film placed in service by the taxpayer before March 15, 1984, if the taxpayer treated such film as recovery property for purposes of section 168 of the Internal Revenue Code of 1954 on a return of tax under chapter 1 of such Code filed before March 16, 26 USC l et sea. 1984, or (ii) any qualified film placed in service by the taxpayer before January 1, 1985, if—

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