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"(1)
IN GENERAL. --In applying subclause ( "(A)
Straight debt securities of an issuer which meet the
requirements of paragraph (2). "(B)
Any loan to an individual or an estate. "(C)
Any section 467 rental agreement (as defined in
section 467(d)), other than with a person described
in subsection (d)(2)(B). "(D)
Any obligation to pay rents from real property (as
defined in subsection (d)(1)). "(E)
Any security issued by a State or any political
subdivision thereof, the District of Columbia, a
foreign government or any political subdivision
thereof, or the Commonwealth of Puerto Rico, but
only if the determination of any payment received or
accrued under such security does not depend in whole
or in part on the profits of any entity not
described in this subparagraph or payments on any
obligation issued by such an entity, "(F)
Any security issued by a real estate investment
trust. "(G)
Any other arrangement as determined by the
Secretary. "(2)
SPECIAL RULES RELATING TO STRAIGHT DEBT SECURITIES.
-- "(A)
IN GENERAL. --For purposes of paragraph (1)(A),
securities meet the requirements of this paragraph
if such securities are straight debt, as defined in
section 1361(c)(5) (without regard to subparagraph (B)(iii)
thereof). "(B)
SPECIAL RULES RELATING TO CERTAIN CONTINGENCIES.
--For purposes of subparagraph (A), any interest or
principal shall not be treated as failing to satisfy
section 1361(c)(5)(B)(i) solely by reason of the
fact that -- "(i)
the time of payment of such interest or principal is
subject to a contingency, but only if -- "(I)
any such contingency does not have the effect of
changing the effective yield to maturity, as
determined under section 1272, other than a change
in the annual yield to maturity which does not
exceed the greater of 14 of 1 percent or 5 percent
of the annual yield to maturity, or "(II)
neither the aggregate issue price nor the aggregate
face amount of the issuer's debt instruments held by
the trust exceeds $1,000,000 and not more than 12
months of unaccrued interest can be required to be
prepaid thereunder, or "(ii)
the time or amount of payment is subject to a
contingency upon a default or the exercise of a
prepayment right by the issuer of the debt, but only
if such contingency is consistent with customary
commercial practice. "(C)
SPECIAL RULES RELATING TO CORPORATE OR PARTNERSHIP
ISSUERS. --In the case of an issuer which is a
corporation or a partnership, securities that
otherwise would be described in paragraph (1)(A)
shall be considered not to be so described if the
trust holding such securities and any of its
controlled taxable REIT subsidiaries (as defined in
subsection (d)(8)(A)(iv)) hold any securities of the
issuer which -- "(i)
are not described in paragraph (1) (prior to the
application of this subparagraph), and "(ii)
have an aggregate value greater than 1 percent of
the issuer's outstanding securities determined
without regard to paragraph (3)(A)(i). "(3)
"(A)
IN GENERAL. --For purposes of applying subclause ( "(i)
a trust's interest as a partner in a partnership (as
defined in section 7701(a)(2)) shall not be
considered a security, and "(ii)
the trust shall be deemed to own its proportionate
share of each of the assets of the partnership. "(B)
DETERMINATION OF TRUST'S INTEREST IN PARTNERSHIP
ASSETS. --For purposes of subparagraph (A), with
respect to any taxable year beginning after the date
of the enactment of this subparagraph -- "(i)
the trust's interest in the partnership assets shall
be the trust's proportionate interest in any
securities issued by the partnership (determined
without regard to subparagraph (A)(i) and paragraph
(4), but not including securities described in
paragraph (1)), and "(ii)
the value of any debt instrument shall be the
adjusted issue price thereof, as defined in section
1272(a)(4). "(4)
CERTAIN PARTNERSHIP DEBT INSTRUMENTS NOT TREATED AS
A SECURITY. --For purposes of applying subclause ( "(A)
any debt instrument issued by a partnership and not
described in paragraph (1) shall not be considered a
security to the extent of the trust's interest as a
partner in the partnership, and "(B)
any debt instrument issued by a partnership and not
described in paragraph (1) shall not be considered a
security if at least 75 percent of the partnership's
gross income (excluding gross income from prohibited
transactions) is derived from sources referred to in
subsection (c)(3). "(5)
SECRETARIAL GUIDANCE. --The Secretary is authorized
to provide guidance (including through the issuance
of a written determination, as defined in section
6110(b)) that an arrangement shall not be considered
a security held by the trust for purposes of
applying subclause (
"(A)
LIMITED RENTAL EXCEPTION. -- "(i)
IN GENERAL. --The requirements of this subparagraph
are met with respect to any property if at least 90
percent of the leased space of the property is
rented to persons other than taxable REIT
subsidiaries of such trust and other than persons
described in paragraph (2)(B). "(ii)
RENTS MUST BE SUBSTANTIALLY COMPARABLE. --Clause (i)
shall apply only to the extent that the amounts paid
to the trust as rents from real property (as defined
in paragraph (1) without regard to paragraph (2)(B))
from such property are substantially comparable to
such rents paid by the other tenants of the trust's
property for comparable space. "(iii)
TIMES FOR TESTING "(I)
at the time such lease is entered into, "(II)
at the time of each extension of the lease,
including a failure to exercise a right to
terminate, and "( With
respect to subclause ( "(iv)
CONTROLLED TAXABLE REIT SUBSIDIARY. --For purposes
of clause (iii), the term 'controlled taxable REIT
subsidiary' means, with respect to any real estate
investment trust, any taxable REIT subsidiary of
such trust if such trust owns directly or indirectly
-- "(I)
stock possessing more than 50 percent of the total
voting power of the outstanding stock of such
subsidiary, or "(II)
stock having a value of more than 50 percent of the
total value of the outstanding stock of such
subsidiary. "(v)
CONTINUING QUALIFICATION BASED ON THIRD PARTY
ACTIONS. --If the requirements of clause (i) are met
at a time referred to in clause (iii), such
requirements shall continue to be treated as met so
long as there is no increase in the space leased to
any taxable REIT subsidiary of such trust or to any
person described in paragraph (2)(B). "(vi)
CORRECTION PERIOD. --If there is an increase
referred to in clause (v) during any calendar
quarter with respect to any property, the
requirements of clause (iii) shall be treated as met
during the quarter and the succeeding quarter if
such requirements are met at the close of such
succeeding quarter.".
"(G)
TREATMENT OF CERTAIN HEDGING INSTRUMENTS. --Except
to the extent provided by regulations, any income of
a real estate investment trust from a hedging
transaction (as defined in clause (ii) or (iii) of
section 1221(b)(2)(A)) which is clearly identified
pursuant to section 1221(a)(7), including gain from
the sale or disposition of such a transaction, shall
not constitute gross income under paragraph (2) to
the extent that the transaction hedges any
indebtedness incurred or to be incurred by the trust
to acquire or carry real estate assets.".
"(A)
DE MINIMIS FAILURE. --A corporation, trust, or
association that fails to meet the requirements of
paragraph (4)(B)(iii) for a particular quarter shall
nevertheless be considered to have satisfied the
requirements of such paragraph for such quarter if
-- "(i)
such failure is due to the ownership of assets the
total value of which does not exceed the lesser of
-- "(I)
1 percent of the total value of the trust's assets
at the end of the quarter for which such measurement
is done, and "(II)
$10,000,000, and "(ii)(I)
the corporation, trust, or association, following
the identification of such failure, disposes of
assets in order to meet the requirements of such
paragraph within 6 months after the last day of the
quarter in which the corporation, trust or
association's identification of the failure to
satisfy the requirements of such paragraph occurred
or such other time period prescribed by the
Secretary and in the manner prescribed by the
Secretary, or "(II)
the requirements of such paragraph are otherwise met
within the time period specified in subclause (I). "(B)
FAILURES EXCEEDING DE MINIMIS AMOUNT. --A
corporation, trust, or association that fails to
meet the requirements of paragraph (4) for a
particular quarter shall nevertheless be considered
to have satisfied the requirements of such paragraph
for such quarter if -- "(i)
such failure involves the ownership of assets the
total value of which exceeds the de minimis standard
described in subparagraph (A)(i) at the end of the
quarter for which such measurement is done, "(ii)
following the corporation, trust, or association's
identification of the failure to satisfy the
requirements of such paragraph for a particular
quarter, a description of each asset that causes the
corporation, trust, or association to fail to
satisfy the requirements of such paragraph at the
close of such quarter of any taxable year is set
forth in a schedule for such quarter filed in
accordance with regulations prescribed by the
Secretary, "(iii)
the failure to meet the requirements of such
paragraph for a particular quarter is due to
reasonable cause and not due to willful neglect, "(iv)
the corporation, trust, or association pays a tax
computed under subparagraph (C), and "(v)(I)
the corporation, trust, or association disposes of
the assets set forth on the schedule specified in
clause (ii) within 6 months after the last day of
the quarter in which the corporation, trust or
association's identification of the failure to
satisfy the requirements of such paragraph occurred
or such other time period prescribed by the
Secretary and in the manner prescribed by the
Secretary, or "(II)
the requirements of such paragraph are otherwise met
within the time period specified in subclause (I). "(C)
TAX. --For purposes of subparagraph (B)(iv) -- "(i)
TAX IMPOSED. --If a corporation, trust, or
association elects the application of this
subparagraph, there is hereby imposed a tax on the
failure described in subparagraph (B) of such
corporation, trust, or association. Such tax shall
be paid by the corporation, trust, or association. "(ii)
TAX COMPUTED. --The amount of the tax imposed by
clause (i) shall be the greater of -- "(I)
$50,000, or "(II)
the amount determined (pursuant to regulations
promulgated by the Secretary) by multiplying the net
income generated by the assets described in the
schedule specified in subparagraph (B)(ii) for the
period specified in clause (iii) by the highest rate
of tax specified in section 11. "(iii)
PERIOD. --For purposes of clause (ii)(II), the
period described in this clause is the period
beginning on the first date that the failure to
satisfy the requirements of such paragraph (4)
occurs as a result of the ownership of such assets
and ending on the earlier of the date on which the
trust disposes of such assets or the end of the
first quarter when there is no longer a failure to
satisfy such paragraph (4). "(iv)
ADMINISTRATIVE PROVISIONS. --For purposes of
subtitle F, the taxes imposed by this subparagraph
shall be treated as excise taxes with respect to
which the deficiency procedures of such subtitle
apply.".
"(A)
following the corporation, trust, or association's
identification of the failure to meet the
requirements of paragraph (2) or (3), or of both
such paragraphs, for any taxable year, a description
of each item of its gross income described in such
paragraphs is set forth in a schedule for such
taxable year filed in accordance with regulations
prescribed by the Secretary, and".
"(A)
which is not a real estate investment trust to which
the provisions of this part apply for the taxable
year due to one or more failures to comply with one
or more of the provisions of this part (other than
subsection (c)(6) or (c)(7) of section 856), "(B)
such failures are due to reasonable cause and not
due to willful neglect, and "(C)
if such corporation, trust, or association pays (as
prescribed by the Secretary in regulations and in
the same manner as tax) a penalty of $50,000 for
each failure to satisfy a provision of this part due
to reasonable cause and not willful neglect.".
"(1)
IN GENERAL. --A taxpayer may elect to treat the cost
of any qualified film or television production as an
expense which is not chargeable to capital account.
Any cost so treated shall be allowed as a deduction. "(2)
DOLLAR LIMITATION. -- "(A)
IN GENERAL. --Paragraph (1) shall not apply to any
qualified film or television production the
aggregate cost of which exceeds $15,000,000. "(B)
HIGHER DOLLAR LIMITATION FOR PRODUCTIONS IN CERTAIN
AREAS. --In the case of any qualified film or
television production the aggregate cost of which is
significantly incurred in an area eligible for
designation as -- "(i)
a low-income community under section 45D, or "(ii)
a distressed county or isolated area of distress by
the Delta Regional Authority established under
section 2009aa-1 of title 7, United States Code, subparagraph
(A) shall be applied by substituting '$20,000,000'
for '$15,000,000'.
"(1)
IN GENERAL. --An election under this section with
respect to any qualified film or television
production shall be made in such manner as
prescribed by the Secretary and by the due date
(including extensions) for filing the taxpayer's
return of tax under this chapter for the taxable
year in which costs of the production are first
incurred. "(2)
REVOCATION OF ELECTION. --Any election made under
this section may not be revoked without the consent
of the Secretary.
"(1)
IN GENERAL. --The term 'qualified film or television
production' means any production described in
paragraph (2) if 75 percent of the total
compensation of the production is qualified
compensation. "(2)
PRODUCTION. -- "(A)
IN GENERAL. --A production is described in this
paragraph if such production is property described
in section 168(f)(3). For purposes of a television
series, only the first 44 episodes of such series
may be taken into account. "(B)
EXCEPTION. --A production is not described in this
paragraph if records are required under section 2257
of title 18, United States Code, to be maintained
with respect to any performer in such production. "(3)
QUALIFIED COMPENSATION. --For purposes of paragraph
(1) -- "(A)
IN GENERAL. --The term 'qualified compensation'
means compensation for services performed in the
United States by actors, directors, producers, and
other relevant production personnel. "(B)
PARTICIPATIONS
"Sec.
181. Treatment of certain qualified film and
television productions.".
"(1)
$3,500, and "(2)
the number of miles of railroad track owned or
leased by the eligible taxpayer as of the close of
the taxable year.
"(1)
any Class II or Class "(2)
any person who transports property using the rail
facilities of a person described in paragraph (1) or
who furnishes railroad-related property or services
to such a person.
"(1)
CLASS II OR CLASS "(2)
CONTROLLED GROUPS. --Rules similar to the rules of
paragraph (1) of section 41(f) shall apply for
purposes of this section. "(3)
BASIS ADJUSTMENT. --For purposes of this subtitle,
if a credit is allowed under this section with
respect to any railroad track, the basis of such
track shall be reduced by the amount of the credit
so allowed.
"Sec.
45G. Railroad track maintenance credit.".
"Sec.
5148. Suspension of occupational tax. "Sec.
5149. Cross references.".
"(6)
CERTAIN FEDERAL FINANCING. -- "(A)
IN GENERAL. --For purposes of this section, the term
'acquisition indebtedness' does not include -- "(i)
an obligation, to the extent that it is insured by
the Federal Housing Administration, to finance the
purchase, rehabilitation, or construction of housing
for low and moderate income persons, or "(ii)
indebtedness incurred by a small business investment
company licensed after the date of the enactment of
the American Jobs Creation Act of 2004 under the
Small Business Investment Act of 1958 if such
indebtedness is evidenced by a debenture -- "(I)
issued by such company under section 303(a) of such
Act, and "(II)
held or guaranteed by the Small Business
Administration. "(B)
LIMITATION. --Subparagraph (A)(ii) shall not apply
with respect to any small business investment
company during any period that -- "(i)
any organization which is exempt from tax under this
title (other than a governmental unit) owns more
than 25 percent of the capital or profits interest
in such company, or "(ii)
organizations which are exempt from tax under this
title (including governmental units other than any
agency or instrumentality of the United States) own,
in the aggregate, 50 percent or more of the capital
or profits interest in such company.".
"Sec.
1352. Alternative tax on qualifying shipping activities.
"Sec.
1353. Notional shipping income.
"Sec.
1354. Alternative tax election; revocation; termination.
"Sec.
1355. Definitions and special rules.
"Sec.
1356. Qualifying shipping activities.
"Sec.
1357. Items not subject to regular tax; depreciation; interest.
"Sec.
1358. Allocation of credits, income, and deductions.
"Sec.
1359. Disposition of qualifying vessels.
"(1)
the tax imposed by section 11 determined after the
application of this subchapter, and "(2)
a tax equal to -- "(A)
the highest rate of tax specified in section 11,
multiplied by "(B)
the notional shipping income for the taxable year.
"(1)
IN GENERAL. --For purposes of subsection (a), the
amount of notional shipping income of an electing
corporation for each qualifying vessel for the
taxable year shall equal the product of -- "(A)
the daily notional shipping income, and "(B)
the number of days during the taxable year that the
electing corporation operated such vessel as a
qualifying vessel in United States foreign trade. "(2)
TREATMENT OF VESSELS THE INCOME FROM WHICH IS NOT
OTHERWISE SUBJECT TO TAX. --In the case of a
qualifying vessel any of the income from which is
not included in gross income by reason of section
883 or otherwise, the amount of notional shipping
income from such vessel for the taxable year shall
be the amount which bears the same ratio to such
shipping income (determined without regard to this
paragraph) as the gross income from the operation of
such vessel in the United States foreign trade bears
to the sum of such gross income and the income so
excluded.
"(1)
40 cents for each 100 tons of so much of the net
tonnage of the vessel as does not exceed 25,000 net
tons, and "(2)
20 cents for each 100 tons of so much of the net
tonnage of the vessel as exceeds 25,000 net tons.
"(1)
shall be made in such form as prescribed by the
Secretary, and |
