Page:United States Statutes at Large Volume 98 Part 1.djvu/862

 98 STAT. 814 Ante, p. 577.

PUBLIC LAW 98-369—JULY 18, 1984 ,'); ft k

gToup (as defined in section 1504(a)) which files or is required to file consolidated income tax returns. "(iii) COMPONENT MEMBER.—The term 'component member' means an includible corporation (as defined in section 1504) which is a member of the affiliated group.

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"(G) L o s s OF 1 MEMBER OF AFFIUATED GROUP MAY NOT OFFSET INCOME OF PERSONAL HOLDING COMPANY OR PERSONAL

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SERVICE CORPORATION.—Nothing in this paragraph shall permit any loss of a member of an affiliated group to be used as an offset against the income of any other member of such group which is a personal holding company (as defined in section 542(a)) or a personal service corporation (as defined in section 269A(b) but determined by substituting '5 percent' for '10 percent' in section 269A(b)(2))."

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(b) ACTIVITIES TREATED AS SEPARATE ACTIVITIES BY STATUTE MAY BE AGGREGATED WHERE TAXPAYER ACTIVELY PARTICIPATES IN THE

26 USC 465.

MANAGEMENT OF EACH ACTIVITY.—Paragraph (2) of section 465(c)

(relating to activities to which risk applies) is amended to read as follows: "(2) SEPARATE ACTIVITIES.—For purposes of this section— "(A) IN GENERAL.—Except as provided in subparagraph (B), a taxpayer's activity with respect to each— fa*ju.. "(i) film or video tape, "(ii) section 1245 property which is leased or held for dcifiT^iHi^'-:: leasing, .,„..,:...,. ^ "(iii) farm, "(iv) oil and gas property (as defined under section 614), or "(v) geothermal property (as defined under section 614), shall be treated as a separate activity. Ri^o *

"(B) AGGREGATION RULES.— "(i) SPECIAL RULE FOR LEASES OF SECTION 1245 PROPERTY BY PARTNERSHIPS OR s CORPORATIONS.—In the case

of any partnership or S corporation, all activities with respect to section 1245 properties which— "(I) are leased or held for lease, and "(II) are placed in service in any taxable year of the partnership or S corporation, shall be treated as a single activity. "(ii) OTHER AGGREGATION RULES.—Rules similar to

the rules of subparagraphs (B) and (C) of paragraph (3) shall apply for purposes of this paragraph.' (c) CORPORATIONS CONSIDERED AT RISK WITH RESPECT TO AMOUNTS BORROWED FROM SHAREHOLDERS, ETC.—Paragraph (3) of section

465(b) (relating to certain borrowed amounts excluded) is amended to read as follows: j^ p

"(3) CERTAIN BORROWED AMOUNTS EXCLUDED.—

"(A) IN GENERAL.—Except to the extent provided in regu..^y;^. latfons, for purposes of paragraph (1)(B), amounts borrowed shall not be considered to be at risk with respect to an activity if such amounts are borrowed from any person who has an interest in such activity or from a related person to . ^, a person (other than the taxpayer) having such an interest. ,-.. fc&s....

"(B) EXCEPTIONS.— "(i) INTEREST AS CREDITOR.—Subparagraph (A) shall

not apply to an interest as a creditor in the activity.

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