Page:United States Statutes at Large Volume 98 Part 1.djvu/855

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 807

whom were services directly related to such trade or business, and "(HI) during the entire 12-month period ending on the last day of such taxable year, such corporation had at least 1 full-time employee substamtially all of the services of whom were in the active management of the trade or business. Such term shall not include any master sound recording or other tangible or intangible asset associated with literary, artistic, or musical properties. "(iv) DETERMINATION OF ALLOCABLE SHARE.—The de-

termination of any partner's or shareholder's allocable share of any financing shall be made in the same manner as the credit allowable by section 38 with Post, p. 827. respect to such property." (b) TREATMENT OF SUBSEQUENT INCREASES AND DECREASES IN NONQUALIFIED NONRECOURSE FINANCING.— (1) SUBSEQUENT DECREASES.—Paragraph (9) of section 46(c)

(relating to subsequent increases in the taxpayer's amount at risk with respect to the property) is amended to read as follows:

26 USC 46.

.;,

"(9) SUBSEQUENT DECREASES IN NONQUAUFIED NONRECOURSE FINANCING WITH RESPECT TO THE PROPERTY.—

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"(A) IN GENERAL.—If, at the close of a taxable year following the taxable year in which the property was placed in service, there is a net decrease in the amount of nonqualifled nonrecourse financing with respect to such property, such net decrease shall be taken into account as additional qualified investment in such property in accordance with subparagraph (C). "(B) CERTAIN TRANSACTIONS NOT TAKEN INTO ACCOUNT.—

For purposes of this paragraph, nonqualified nonrecourse financing shall not be treated as decreased through the surrender or other use of property financed by nonqualified nonrecourse financing. "(C) MANNER IN WHICH TAKEN INTO ACCOUNT.— "(i) CREDIT DETERMINED BY REFERENCE TO TAXABLE YEAR PROPERTY PLACED IN SERVICE.—For purposes of

determining the amount of credit allowable under section 38 and the amount of credit subject to the early disposition or cessation rules under section 47, any increase in a taxpayer's qualified investment in property by reason of this paragraph shall be deemed to be additional qualified investment made by the taxpayer in the year in which the property referred to in subparagraph (A) was first placed in service. "(ii) CREDIT ALLOWED FOR YEAR OF DECREASE IN NONQUAUFIED NONRECOURSE FINANCING.—Any credit allow-

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able under this subpart for any increase in qualified investment by reason of this paragraph shall be treated as earned during the taxable year of the decrease in the amount of nonqualified nonrecourse financing." (2) SUBSEQUENT INCREASES.—So much of subsection (d) of section 47 (relating to property ceasing to be at risk) as precedes 26 USC 47. paragraph (3) thereof is amended to read as follows: "(d) INCREASES IN NONQUAUFIED NONRECOURSE FINANCING.—

"(1) IN GENERAL.—If, as of the close of the taxable year, there is a net increase with respect to the taxpayer in the amount of

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