Page:United States Statutes at Large Volume 99 Part 1.djvu/535

 PUBLIC LAW 99-121—OCT. 11, 1985

99 STAT. 513

(2) Subparagraph (E) of section 7872(c)(l) of such Code is amended by striking out "or (C)" and inserting in lieu thereof "(C), or (F)". SEC. 202. TIME FOR DETERMINING RATE APPLICABLE TO EMPLOYEE RELOCATION LOANS. Subsection (f) of section 7872 of the Internal Revenue Code of 1954 (relating to treatment of loans with below-market interest rates) is amended by adding at the end thereof the following new paragraph:

98 Stat. 699. 26 USC 7872.

"(11) TIME FOR DETERMINING RATE APPLICABLE TO EMPLOYEE RELOCATION LOANS.—

"(A) IN GENERAL.—In the case of any term loan made by an employer to an employee the proceeds of which are used by the employee to purchase a principal residence (within the meaning of section 1034), the determination of the applicable Federal rate shall be made as of the date the written contract to purchase such residence was entered into. "(B) PARAGRAPH ONLY TO APPLY TO CASES TO WHICH SECTION 217 APPLIES.—Subparagraph (A) shall only apply to the

purchase of a principal residence in connection with the commencement of work by an employee or a change in the principal place of work of an employee to which section 217 applies." SEC. 203. SECTION 7872 OF THE INTERNAL REVENUE CODE SHALL NOT APPLY TO NON-LOAN PAYMENTS TO CERTAIN RESIDENTIAL HOUSING FACILITIES FOR THE ELDERLY. (a) GENERAL RULE.—For purposes of section 7872 of the Internal Revenue Code of 1954, payments made to a specified independent living facility for the elderly by a payor who is an individual at least 65 years old shall not be treated as loans provided— (1) the independent living facility is designed and operated to meet some substantial combination of the health, physical, emotional, recreational, social, religious and similar needs of persons over the age of 65; (2) in exchange for the payment, the payor obtains the right to occupy (or equivalent contractual right) independent living quarters located in the independent living facility; (3) the amount of the payment is equal to the fair market value of the right to occupy the independent living quarters; (4) upon leaving the independent living facility, the payor is entitled to receive a payment equal to at least 50 percent of the fair market value at that time of the right to occupy the independent living quarters, the timing of which payment may be contingent on the time when the independent living facility is able to locate a new occupant for such quarters; and (5) the excess, if any, of the fair market value of the independent living quarters at the time the payor leaves such quarters (less a reasonable amount to cover costs) over the amount paid to the payor is used by an organization described in section 501(c)(3) of such Code to provide housing and related services for needy elderly persons. (b) SPECIFIED INDEPENDENT LIVING FACILITY FOR THE ELDERLY.— For purposes of this section—

(1) IN GENERAL.—The term "specified independent living facility for the elderly" means—

26 USC 217.

98 Stat. 699. 26 USC 7872.

26 USC 501. Missouri.

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