Page:United States Statutes at Large Volume 98 Part 1.djvu/746

 98 STAT. 698 26 USC 6501.

PUBLIC LAW 98-369—JULY 18, 1984 (1) Section 6501 is amended by striking (o) and by redesignating subsection (m), tions (k), (1), and (m), respectively, and by tion (m) (as so redesignated) the following

out subsections (1) and (n), and (p) as subsecinserting after subsecnew subsection:

"(n) CROSS REFERENCES.— "(1) For period of limitations for assessment and collection in the case of a joint income return filed after separate returns have been filed, see section 6013(b)(3) and (4). "(2) For extension of period in the case of partnership items (as defined in section 6231(a)(3)), see section 6229. "(3) For extension of period in the case of certain contributions in aid of construction, see section 118(c)."

Ante, p. 697.

26 USC 6511.

(2) Subsection (f) of section 6511 is amended by striking out "section 6501(n)(l)" and inserting in lieu thereof "section 6501(1)(1)". 26 USC 118 note. (c) EFFECTIVE DATE.—The amendments made by this section shall apply to expenditures with respect to which the second taxable year described in section 118(b)(2)(B) of the Internal Revenue Code of 1954 ends after December 31, 1984.

Subtitle L—Miscellaneous Provisions SEC. 171. INCLUSION OF TAX BENEFIT ITEMS IN INCOME. (a) IN GENERAL.—Section 111 (relating to recovery of bad debts, prior taxes, and delinquency amounts) is amended to read as follows: "SEC. 111. RECOVERY OF TAX BENEFIT ITEMS. "(a) DEDUCTIONS.—Gross income does not include income attributable to the recovery during the taxable year of any amount deducted in any prior taxable year to the extent such amount did not reduce income subject to tax.

26 USC 111.

"(b) CREDITS.— "(1) IN GENERAL.—If—•

•

"(A) a credit was allowable with respect to any amount for any prior tsixable year, and "(B) during the taxable year there is a downward price adjustment or similar adjustment, the tax imposed by this chapter for the taxable year shall be increased by the amount of the credit attributable to the adjustment. (2) EXCEPTION WHERE CREDIT DID NOT REDUCE TAX.—Para-

graph (1) shall not apply to the extent that the credit allowable for the recovered amount did not reduce the amount of tax imposed by this chapter. "(3) EXCEPTION FOR INVESTMENT TAX CREDIT AND FOREIGN TAX

CREDIT.—This subsection shall not apply with respect to the credit determined under section 46 and the foreign tax credit. "(c) TREATMENT OF CARRYOVERS.—For purposes of this section, an increase in a carryover which has not expired before the beginning of the taxable year in which the recovery or adjustment takes place shall be treated as reducing income subject to tax or reducing tax imposed by this chapter, as the case may be. "(d) SPECIAL RULES FOR ACCUMULATED EARNINGS TAX AND FOR PERSONAL HOLDING COMPANY TAX.—In applying subsection (a) for

the purpose of determining the accumulated earnings tax under section 531 or the tax under section 541 (relating to personal holding companies)—

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