|
Page 2 |
|
|
|
|
|
|
"(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 "(2)
shall be effective for the taxable year for which
made and all succeeding taxable years until
terminated under subsection (d).
"(1)
BY REVOCATION. -- "(A)
IN GENERAL. --An election under subsection (a) may
be terminated by revocation. "(B)
WHEN EFFECTIVE. --Except as provided in subparagraph
(C) -- "(i)
a revocation made during the taxable year and on or
before the 15th day of the 3d month thereof shall be
effective on the 1st day of such taxable year, and "(ii)
a revocation made during the taxable year but after
such 15th day shall be effective on the 1st day of
the following taxable year. "(C)
REVOCATION "(2)
BY PERSON CEASING TO BE QUALIFYING VESSEL OPERATOR.
-- "(A)
IN GENERAL. --An election under subsection (a) shall
be terminated whenever (at any time on or after the
1st day of the 1st taxable year for which the
corporation is an electing corporation) such
corporation ceases to be a qualifying vessel
operator. "(B)
WHEN EFFECTIVE. --Any termination under this
paragraph shall be effective on and after the date
of cessation. "(C)
ANNUALIZATION. --The Secretary shall prescribe such
annualization and other rules as are appropriate in
the case of a termination under this paragraph.
"(1)
ELECTING CORPORATION. --The term 'electing
corporation' means any corporation for which an
election is in effect under this subchapter. "(2)
ELECTING GROUP; CONTROLLED GROUP. -- "(A)
ELECTING GROUP. --The term 'electing group' means a
controlled group of which one or more members is an
electing corporation. "(B)
CONTROLLED GROUP. --The term 'controlled group'
means any group which would be treated as a single
employer under subsection (a) or (b) of section 52
if paragraphs (1) and (2) of section 52(a) did not
apply. "(3)
QUALIFYING VESSEL OPERATOR. --The term 'qualifying
vessel operator' means any corporation -- "(A)
who operates one or more qualifying vessels, and "(B)
who meets the shipping activity requirement in
subsection (c). "(4)
QUALIFYING VESSEL. --The term 'qualifying vessel'
means a self-propelled (or a combination
self-propelled and non-self-propelled) United States
flag vessel of not less than 10,000 deadweight tons
used exclusively in the United States foreign trade
during the period that the election under this
subchapter is in effect. "(5)
UNITED STATES "(6)
UNITED STATES DOMESTIC TRADE. --The term 'United
States domestic trade' means the transportation of
goods or passengers between places in the United
States. "(7)
UNITED STATES FOREIGN TRADE. --The term 'United
States foreign trade' means the transportation of
goods or passengers between a place in the United
States and a foreign place or between foreign
places. "(8)
CHARTER. --The term 'charter' includes an operating
agreement.
"(1)
IN GENERAL. --Except as provided in paragraph (2), a
person is treated as operating any vessel during any
period if such vessel is -- "(A)
owned by, or chartered (including a time charter)
to, the person, and "(B)
is in use as a qualifying vessel during such period. "(2)
BAREBOAT CHARTERS. --A person is treated as
operating and using a vessel that it has chartered
out on bareboat charter terms only if -- "(A)(i)
the vessel is temporarily surplus to the person's
requirements and the term of the charter does not
exceed 3 years, or "(ii)
the vessel is bareboat chartered to a member of a
controlled group which includes such person or to an
unrelated person who sub-bareboats or time charters
the vessel to such a member (including the owner of
the vessel), and "(B)
the vessel is used as a qualifying vessel by the
person to whom ultimately chartered.
"(1)
IN GENERAL. --Except as otherwise provided in this
subsection, a corporation meets the shipping
activity requirement of this subsection for any
taxable year only if the requirement of paragraph
(4) is met for each of the 2 preceding taxable
years. "(2)
SPECIAL RULE FOR 1ST YEAR OF ELECTION. --A
corporation meets the shipping activity requirement
of this subsection for the first taxable year for
which the election under section 1354(a) is in
effect only if the requirement of paragraph (4) is
met for the preceding taxable year. "(3)
CONTROLLED GROUPS. --A corporation who is a member
of a controlled group meets the shipping activity
requirement of this subsection only if such
requirement is met determined -- "(A)
by treating all members of such group as 1 person,
and "(B)
by disregarding vessel charters between members of
such group. "(4)
REQUIREMENT. --The requirement of this paragraph is
met for any taxable year if, on average during such
year, at least 25 percent of the aggregate tonnage
of qualifying vessels used by the corporation were
owned by such corporation or chartered to such
corporation on bareboat charter terms.
"(1)
each partner shall be treated as operating vessels
operated by the partnership, "(2)
each partner shall be treated as conducting the
activities conducted by the partnership, and "(3)
the extent of a partner's ownership or charter
interest in any vessel owned by or chartered to the
partnership shall be determined on the basis of the
partner's interest in the partnership.
"(1)
IN GENERAL. --For purposes of subsections (b) and
(c), an electing corporation shall be treated as
continuing to use a qualifying vessel during any
period of temporary cessation if the electing
corporation gives timely notice to the Secretary
stating -- "(A)
that it has temporarily ceased to operate the
qualifying vessel, and "(B)
its intention to resume operating the qualifying
vessel. "(2)
NOTICE. --Notice shall be deemed timely if given not
later than the due date (including extensions) for
the corporation's tax return for the taxable year in
which the temporary cessation begins. "(3)
PERIOD DISREGARD IN EFFECT. --The period of
temporary cessation under paragraph (1) shall
continue until the earlier of the date on which -- "(A)
the electing corporation abandons its intention to
resume operation of the qualifying vessel, or "(B)
the electing corporation resumes operation of the
qualifying vessel.
"(1)
IN GENERAL. --For purposes of this subchapter, an
electing corporation shall be treated as continuing
to use a qualifying vessel in the United States
foreign trade during any period of temporary use in
the United States domestic trade if the electing
corporation gives timely notice to the Secretary
stating -- "(A)
that it temporarily operates or has operated in the
United States domestic trade a qualifying vessel
which had been used in the United States foreign
trade, and "(B)
its intention to resume operation of the vessel in
the United States foreign trade. "(2)
NOTICE. --Notice shall be deemed timely if given not
later than the due date (including extensions) for
the corporation's tax return for the taxable year in
which the temporary cessation begins. "(3)
PERIOD DISREGARD IN EFFECT. --The period of
temporary use under paragraph (1) continues until
the earlier of the date of which -- "(A)
the electing corporation abandons its intention to
resume operations of the vessel in the United States
foreign trade, or "(B)
the electing corporation resumes operation of the
vessel in the United States foreign trade. "(4)
NO DISREGARD IF DOMESTIC TRADE USE EXCEEDS 30 DAYS.
--Paragraph (1) shall not apply to any qualifying
vessel which is operated in the United States
domestic trade for more than 30 days during the
taxable year.
"(1)
core qualifying activities, "(2)
qualifying secondary activities, and "(3)
qualifying incidental activities.
"(1)
IN GENERAL. --The term 'qualifying secondary
activities' means secondary activities but only to
the extent that, without regard to this subchapter,
the gross income derived by such corporation from
such activities does not exceed 20 percent of the
gross income derived by the corporation from its
core qualifying activities. "(2)
SECONDARY ACTIVITIES. --The term 'secondary
activities' means -- "(A)
the active management or operation of vessels other
than qualifying vessels in the United States foreign
trade, "(B)
the provision of vessel, barge, container, or
cargorelated facilities or services to any person, "(C)
other activities of the electing corporation and
other members of its electing group that are an
integral part of its business of operating
qualifying vessels in United States foreign trade,
including -- "(i)
ownership or operation of barges, containers,
chassis, and other equipment that are the complement
of, or used in connection with, a qualifying vessel
in United States foreign trade, "(ii)
the inland haulage of cargo shipped, or to be
shipped, on qualifying vessels in United States
foreign trade, and "(iii)
the provision of terminal, maintenance, repair,
logistical, or other vessel, barge, container, or
cargo-related services that are an integral part of
operating qualifying vessels in United States
foreign trade, and "(D)
such other activities as may be prescribed by the
Secretary pursuant to regulations. "(3)
COORDINATION WITH "(A)
IN GENERAL. --Such term shall not include any core
qualifying activities. "(B)
NONELECTING CORPORATIONS. --In the case of a
corporation (other than an electing corporation)
which is a member of an electing group, any core
qualifying activities of the corporation shall be
treated as qualifying secondary activities (and not
as core qualifying activities).
"(1)
they are incidental to the corporation's core
qualifying activities, "(2)
they are not qualifying secondary activities, and "(3)
without regard to this subchapter, the gross income
derived by such corporation from such activities
does not exceed 0.1 percent of the corporation's
gross income from its core qualifying activities.
"(1)
GENERAL RULE. --Subject to paragraph (2), each item
of loss, deduction (other than for interest
expense), or credit of any taxpayer with respect to
any activity the income from which is excluded from
gross income under this section shall be disallowed. "(2)
DEPRECIATION. -- "(A)
IN GENERAL. --Notwithstanding paragraph (1), the
adjusted basis (for purposes of determining gain) of
any qualifying vessel shall be determined as if the
deduction for depreciation had been allowed. "(B)
METHOD. -- "(i)
IN GENERAL. --Except as provided in clause (ii), the
straight-line method of depreciation shall apply to
qualifying vessels the income from operation of
which is excluded from gross income under this
section. "(ii)
EXCEPTION. --Clause (i) shall not apply to any
qualifying vessel which is subject to a charter
entered into before the date of the enactment of
this subchapter. "(3)
INTEREST. -- "(A)
IN GENERAL. --Except as provided in subparagraph
(B), the interest expense of an electing corporation
shall be disallowed in the ratio that the fair
market value of such corporation's qualifying
vessels bears to the fair market value of such
corporation's total assets. "(B)
ELECTING GROUP. --In the case of a corporation which
is a member of an electing group, the interest
expense of such corporation shall be disallowed in
the ratio that the fair market value of such
corporation's qualifying vessels bears to the fair
market value of the electing groups total assets.
"(1)
No deduction shall be allowed against the notional
shipping income of an electing corporation, and no
credit shall be allowed against the tax imposed by
section 1352(a)(2). "(2)
No deduction shall be allowed for any net operating
loss attributable to the qualifying shipping
activities of any person to the extent that such
loss is carried forward by such person from a
taxable year preceding the first taxable year for
which such person was an electing corporation.
"(1)
as between an electing corporation and another
person, or "(2)
as between an person's qualifying shipping
activities and other activities carried on by it.
"(1)
3 years after the close of the first taxable year in
which the gain is realized, or "(2)
subject to such terms and conditions as may be
specified by the Secretary, on such later date as
the Secretary may designate on application by the
taxpayer.
"(1)
the statutory period for the assessment of any
deficiency, for any taxable year in which any part
of the gain is realized, attributable to such gain
shall not expire prior to the expiration of 3 years
from the date the Secretary is notified by such
operator (in such manner as the Secretary may by
regulations prescribe) of the replacement qualifying
vessel or of an intention not to replace, and "(2)
such deficiency may be assessed before the
expiration of such 3-year period notwithstanding the
provisions of section 6212(c) or the provisions of
any other law or rule of law which would otherwise
prevent such assessment.
"Subchapter
R. Election to determine corporate tax on certain
international shipping activities using per ton
rate.".
Subtitle
F --Stock Options and Employee Stock Purchase Plan
Stock Options
"(A)
a transfer of a share of stock to any individual
pursuant to an exercise of an incentive stock option
(as defined in section 422(b)) or under an employee
stock purchase plan (as defined in section 423(b)),
or "(B)
any disposition by the individual of such
stock.".
"(A)
a transfer of a share of stock to any individual
pursuant to an exercise of an incentive stock option
(as defined in section 422(b) of the Internal
Revenue Code of 1986) or under an employee stock
purchase plan (as defined in section 423(b) of such
Code), or "(B)
any disposition by the individual of such
stock.".
"(A)
a transfer of a share of stock to any individual
pursuant to an exercise of an incentive stock option
(as defined in section 422(b)) or under an employee
stock purchase plan (as defined in section 423(b)),
or "(B)
any disposition by the individual of such
stock.".
"(A)
a transfer of a share of stock to any individual
pursuant to an exercise of an incentive stock option
(as defined in section 422(b)) or under an employee
stock purchase plan (as defined in section 423(b)),
or "(B)
any disposition by the individual of such
stock.".
Subtitle
A --Volumetric Ethanol Excise Tax Credit
"(1)
the alcohol fuel mixture credit, plus "(2)
the biodiesel mixture credit.
"(1)
IN GENERAL. --For purposes of this section, the
alcohol fuel mixture credit is the product of the
applicable amount and the number of gallons of
alcohol used by the taxpayer in producing any
alcohol fuel mixture for sale or use in a trade or
business of the taxpayer. "(2)
APPLICABLE AMOUNT. --For purposes of this subsection
-- "(A)
IN GENERAL. --Except as provided in subparagraph
(B), the applicable amount is 51 cents. "(B)
MIXTURES NOT CONTAINING ETHANOL. --In the case of an
alcohol fuel mixture in which none of the alcohol
consists of ethanol, the applicable amount is 60
cents. "(3)
ALCOHOL "(A)
is sold by the taxpayer producing such mixture to
any person for use as a fuel, or "(B)
is used as a fuel by the taxpayer producing such
mixture. For
purposes of subparagraph (A), a mixture produced by
any person at a refinery prior to a taxable event
which includes ethyl tertiary butyl ether or other
ethers produced from alcohol shall be treated as
sold at the time of its removal from the refinery
(and only at such time) to another person for use as
a fuel. "(4)
OTHER DEFINITIONS. --For purposes of this subsection
-- "(A)
ALCOHOL. --The term 'alcohol' includes methanol and
ethanol but does not include -- "(i)
alcohol produced from petroleum, natural gas, or
coal (including peat), or "(ii)
alcohol with a proof of less than 190 (determined
without regard to any added denaturants). Such
term also includes an alcohol gallon equivalent of
ethyl tertiary butyl ether or other ethers produced
from such alcohol. "(B)
TAXABLE "(5)
TERMINATION. --This subsection shall not apply to
any sale, use, or removal for any period after
"(1)
IN GENERAL. --For purposes of this section, the
biodiesel mixture credit is the product of the
applicable amount and the number of gallons of
biodiesel used by the taxpayer in producing any
biodiesel mixture for sale or use in a trade or
business of the taxpayer. "(2)
APPLICABLE AMOUNT. --For purposes of this subsection
-- "(A)
IN GENERAL. --Except as provided in subparagraph
(B), the applicable amount is 50 cents. "(B)
AMOUNT FOR AGRI-BIODIESEL. --In the case of any
biodiesel which is agri-biodiesel, the applicable
amount is $1.00. "(3)
BIODIESEL MIXTURE. --For purposes of this section,
the term 'biodiesel mixture' means a mixture of
biodiesel and diesel fuel (as defined in section
4083(a)(3)), determined without regard to any use of
kerosene, which -- "(A)
is sold by the taxpayer producing such mixture to
any person for use as a fuel, or "(B)
is used as a fuel by the taxpayer producing such
mixture. "(4)
CERTIFICATION FOR BIODIESEL. --No credit shall be
allowed under this subsection unless the taxpayer
obtains a certification (in such form and manner as
prescribed by the Secretary) from the producer of
the biodiesel which identifies the product produced
and the percentage of biodiesel and agribiodiesel in
the product. "(5)
OTHER DEFINITIONS. --Any term used in this
subsection which is also used in section 40A shall
have the meaning given such term by section 40A. "(6)
TERMINATION. --This subsection shall not apply to
any sale, use, or removal for any period after
"(1)
IMPOSITION OF TAX. --If -- "(A)
any credit was determined under this section with
respect to alcohol or biodiesel used in the
production of any alcohol fuel mixture or biodiesel
mixture, respectively, and "(B)
any person -- "(i)
separates the alcohol or biodiesel from the mixture,
or "(ii)
without separation, uses the mixture other than as a
fuel, then
there is hereby imposed on such person a tax equal
to the product of the applicable amount and the
number of gallons of such alcohol or biodiesel. "(2)
APPLICABLE
"(A)
includes any gasoline blend, other than qualified
methanol or ethanol fuel (as defined in section
4041(b)(2)(B)), partially exempt methanol or ethanol
fuel (as defined in section 4041(m)(2)), or a
denatured alcohol, and "(B)
includes, to the extent prescribed in regulations -- "(i)
any gasoline blend stock, and "(ii)
any product commonly used as an additive in gasoline
(other than alcohol).
"(1)
USED TO PRODUCE A MIXTURE. --If any person produces
a mixture described in section 6426 in such person's
trade or business, the Secretary shall pay (without
interest) to such person an amount equal to the
alcohol fuel mixture credit or the biodiesel mixture
credit with respect to such mixture. "(2)
COORDINATION WITH OTHER REPAYMENT PROVISIONS. --No
amount shall be payable under paragraph (1) with
respect to any mixture with respect to which an
amount is allowed as a credit under section 6426. "(3)
TERMINATION. --This subsection shall not apply with
respect to -- "(A)
any alcohol fuel mixture (as defined in section
6426(b)(3)) sold or used after "(B)
any biodiesel mixture (as defined in section
6426(c)(3)) sold or used after
"Sec.
6426. Credit for alcohol fuel and biodiesel
mixtures.".
"(1)
the biodiesel mixture credit, plus "(2)
the biodiesel credit.
"(1)
BIODIESEL MIXTURE CREDIT. -- "(A)
IN GENERAL. --The biodiesel mixture credit of any
taxpayer for any taxable year is 50 cents for each
gallon of biodiesel used by the taxpayer in the
production of a qualified biodiesel mixture. "(B)
QUALIFIED BIODIESEL MIXTURE. --The term 'qualified
biodiesel mixture' means a mixture of biodiesel and
diesel fuel (as defined in section 4083(a)(3)),
determined without regard to any use of kerosene,
which -- "(i)
is sold by the taxpayer producing such mixture to
any person for use as a fuel, or "(ii)
is used as a fuel by the taxpayer producing such
mixture. "(C)
SALE OR USE MUST BE IN TRADE OR BUSINESS, "(i)
only if the sale or use described in subparagraph
(B) is in a trade or business of the taxpayer, and "(ii)
for the taxable year in which such sale or use
occurs. "(D)
CASUAL OFF- "(2)
BIODIESEL CREDIT. -- "(A)
IN GENERAL. --The biodiesel credit of any taxpayer
for any taxable year is 50 cents for each gallon of
biodiesel which is not in a mixture with diesel fuel
and which during the taxable year -- "(i)
is used by the taxpayer as a fuel in a trade or
business, or "(ii)
is sold by the taxpayer at retail to a person and
placed in the fuel tank of such person's vehicle. "(B)
USER CREDIT NOT TO APPLY TO BIODIESEL SOLD AT
RETAIL. --No credit shall be allowed under
subparagraph (A)(i) with respect to any biodiesel
which was sold in a retail sale described in
subparagraph (A)(ii). "(3)
CREDIT FOR AGRI-BIODIESEL. --In the case of any
biodiesel which is agri-biodiesel, paragraphs (1)(A)
and (2)(A) shall be applied by substituting '$1.00'
for '50 cents'. "(4)
CERTIFICATION FOR BIODIESEL. --No credit shall be
allowed under this section unless the taxpayer
obtains a certification (in such form and manner as
prescribed by the Secretary) from the producer or
importer of the biodiesel which identifies the
product produced and the percentage of biodiesel and
agribiodiesel in the product.
"(1)
BIODIESEL. --The term 'biodiesel' means the
monoalkyl esters of long chain fatty acids derived
from plant or animal matter which meet -- "(A)
the registration requirements for fuels and fuel
additives established by the Environmental
Protection Agency under section 211 of the Clean Air
Act (42 U.S.C. 7545), and "(B)
the requirements of the American Society of Testing
and Materials D6751. "(2)
AGRI-BIODIESEL. --The term 'agri-biodiesel' means
biodiesel derived solely from virgin oils, including
esters derived from virgin vegetable oils from corn,
soybeans, sunflower seeds, cottonseeds, canola,
crambe, rapeseeds, safflowers, flaxseeds, rice bran,
and mustard seeds, and from animal fats. "(3)
MIXTURE OR BIODIESEL NOT USED AS A "(A)
MIXTURES. --If -- "(i)
any credit was determined under this section with
respect to biodiesel used in the production of any
qualified biodiesel mixture, and "(ii)
any person -- "(I)
separates the biodiesel from the mixture, or "(II)
without separation, uses the mixture other than as a
fuel, then
there is hereby imposed on such person a tax equal
to the product of the rate applicable under
subsection (b)(1)(A) and the number of gallons of
such biodiesel in such mixture. "(B)
BIODIESEL. --If -- "(i)
any credit was determined under this section with
respect to the retail sale of any biodiesel, and "(ii)
any person mixes such biodiesel or uses such
biodiesel other than as a fuel, then
there is hereby imposed on such person a tax equal
to the product of the rate applicable under
subsection (b)(2)(A) and the number of gallons of
such biodiesel. "(C)
APPLICABLE "(4)
PASS-THRU IN THE CASE OF ESTATES
"(17)
the biodiesel fuels credit determined under section
40A(a).".
"(1)
the amount of the alcohol fuel credit determined
with respect to the taxpayer for the taxable year
under section 40(a), and "(2)
the biodiesel fuels credit determined with respect
to the taxpayer for the taxable year under section
40A(a).". (B)
The item relating to section 87 in the table of
sections for part II of subchapter B of chapter 1 is
amended by striking "fuel credit" and
inserting "and biodiesel fuels credits". (2)
Section 196(c) is amended by striking
"and" at the end of paragraph (9), by
striking the period at the end of paragraph (10) and
inserting ", and", and by adding at the
end the following new paragraph: "(11)
the biodiesel fuels credit determined under section
40A(a).". (3)
The table of sections for subpart D of part IV of
subchapter A of chapter 1 is amended by adding after
the item relating to section 40 the following new
item: "Sec.
40A. Biodiesel used as fuel.".
"(1)
under the provisions of section 34, 40, and 40A, to
file a return at the time such person claims such
benefits (in such manner as the Secretary may
prescribe), and "(2)
under the provisions of section 4041(b)(2), 6426, or
6427(e) to file a quarterly return (in such manner
as the Secretary may prescribe).
"Sec.
4104. Information reporting for persons claiming
certain tax benefits.".
Subtitle
B --Agricultural Incentives
"(1)
IN GENERAL. --For purposes", and
"(A)
IN GENERAL. --In the case of drought, flood, or
other weather-related conditions described in
paragraph (1) which result in the area being
designated as eligible for assistance by the Federal
Government, subsection (a)(2)(B) shall be applied
with respect to any converted property by
substituting '4 years' for '2 years'. "(B)
FURTHER EXTENSION BY SECRETARY. --The Secretary may
extend on a regional basis the period for
replacement under this section (after the
application of subparagraph (A)) for such additional
time as the Secretary determines appropriate if the
weather-related conditions which resulted in such
application continue for more than 3 years.".
"(3)
SPECIAL ELECTION RULES. --If section 1033(e)(2)
applies to a sale or exchange of livestock described
in paragraph (1), the election under paragraph (1)
shall be deemed valid if made during the replacement
period described in such section.".
"(6)
ALLOCATION OF SMALL ETHANOL PRODUCER CREDIT TO
PATRONS OF COOPERATIVE. -- "(A)
ELECTION TO ALLOCATE. -- "(i)
IN GENERAL. --In the case of a cooperative
organization described in section 1381(a), any
portion of the credit determined under subsection
(a)(3) for the taxable year may, at the election of
the organization, be apportioned pro rata among
patrons of the organization on the basis of the
quantity or value of business done with or for such
patrons for the taxable year. "(ii)
"(B)
TREATMENT OF ORGANIZATIONS "(i)
ORGANIZATIONS. --The amount of the credit not
apportioned to patrons pursuant to subparagraph (A)
shall be included in the amount determined under
subsection (a)(3) for the taxable year of the
organization. "(ii)
PATRONS. --The amount of the credit apportioned to
patrons pursuant to subparagraph (A) shall be
included in the amount determined under such
subsection for the first taxable year of each patron
ending on or after the last day of the payment
period (as defined in section 1382(d)) for the
taxable year of the organization or, if earlier, for
the taxable year of each patron ending on or after
the date on which the patron receives notice from
the cooperative of the apportionment. "(iii)
SPECIAL RULES FOR DECREASE IN CREDITS FOR TAXABLE
YEAR. --If the amount of the credit of the
organization determined under such subsection for a
taxable year is less than the amount of such credit
shown on the return of the organization for such
year, an amount equal to the excess of -- "(I)
such reduction, over "(II)
the amount not apportioned to such patrons under
subparagraph (A) for the taxable year, shall
be treated as an increase in tax imposed by this
chapter on the organization. Such increase shall not
be treated as tax imposed by this chapter for
purposes of determining the amount of any credit
under this chapter or for purposes of section
55.".
"(2)
COORDINATION WITH INCOME AVERAGING FOR FARMERS
"For treatment of value-added processing involving animals, see
section 1388(k).".
"(D)
with respect to the initial classification or
continuing classification of a cooperative as an
organization described in section 521(b) which is
exempt from tax under section 521(a), or".
"(2)
SPECIAL RULE WHERE EXPENSES EXCEED REIMBURSEMENTS.
--Notwithstanding paragraph (1)(A), if the expenses
incurred by an employee for the use of a vehicle in
performing services described in paragraph (1)
exceed the qualified reimbursements for such
expenses, such excess shall be taken into account in
computing the miscellaneous itemized deductions of
the employee under section 67.".
"(ii)
from any provision or sale of electric energy
transmission services or ancillary services if such
services are provided on a nondiscriminatory open
access basis under an open access transmission
tariff approved or accepted by FERC or under an
independent transmission provider agreement approved
or accepted by FERC (other than income received or
accrued directly or indirectly from a member), "(iii)
from the provision or sale of electric energy
distribution services or ancillary services if such
services are provided on a nondiscriminatory open
access basis to distribute electric energy not owned
by the mutual or electric cooperative company -- "(I)
to end-users who are served by distribution
facilities not owned by such company or any of its
members (other than income received or accrued
directly or indirectly from a member), or "(II)
generated by a generation facility not owned or
leased by such company or any of its members and
which is directly connected to distribution
facilities owned by such company or any of its
members (other than income received or accrued
directly or indirectly from a member), "(iv)
from any nuclear decommissioning transaction, or "(v)
from any asset exchange or conversion transaction. Clauses
(ii) through (v) shall not apply to taxable years
beginning after
"(E)
For purposes of subparagraph (C)(ii), the term 'FERC'
means the Federal Energy Regulatory Commission and
references to such term shall be treated as
including the Public Utility Commission of Texas
with respect to any ERCOT utility (as defined in
section 212(k)(2)(B) of the Federal Power Act (16
U.S.C. 824k(k)(2)(B))). "(F)
For purposes of subparagraph (C)(iii), the term
'nuclear decommissioning transaction' means -- "(i)
any transfer into a trust, fund, or instrument
established to pay any nuclear decommissioning costs
if the transfer is in connection with the transfer
of the mutual or cooperative electric company's
interest in a nuclear power plant or nuclear power
plant unit, "(ii)
any distribution from any trust, fund, or instrument
established to pay any nuclear decommissioning
costs, or "(iii)
any earnings from any trust, fund, or instrument
established to pay any nuclear decommissioning
costs. "(G)
For purposes of subparagraph (C)(iv), the term
'asset exchange or conversion transaction' means any
voluntary exchange or involuntary conversion of any
property related to generating, transmitting,
distributing, or selling electric energy by a mutual
or cooperative electric company, the gain from which
qualifies for deferred recognition under section
1031 or 1033, but only if the replacement property
acquired by such company pursuant to such section
constitutes property which is used, or to be used,
for -- "(i)
generating, transmitting, distributing, or selling
electric energy, or "(ii)
producing, transmitting, distributing, or selling
natural gas.".
"(H)(i)
In the case of a mutual or cooperative electric
company described in this paragraph or an
organization described in section 1381(a)(2)(C),
income received or accrued from a load loss
transaction shall be treated as an amount collected
from members for the sole purpose of meeting losses
and expenses. "(ii)
For purposes of clause (i), the term 'load loss
transaction' means any wholesale or retail sale of
electric energy (other than to members) to the
extent that the aggregate sales during the recovery
period do not exceed the load loss mitigation sales
limit for such period. "(iii)
For purposes of clause (ii), the load loss
mitigation sales limit for the recovery period is
the sum of the annual load losses for each year of
such period. "(iv)
For purposes of clause (iii), a mutual or
cooperative electric company's annual load loss for
each year of the recovery period is the amount (if
any) by which -- "(I)
the megawatt hours of electric energy sold during
such year to members of such electric company are
less than "(II)
the megawatt hours of electric energy sold during
the base year to such members. "(v)
For purposes of clause (iv)(II), the term 'base
year' means -- "(I)
the calendar year preceding the start-up year, or "(II)
at the election of the mutual or cooperative
electric company, the second or third calendar years
preceding the start-up year. "(vi)
For purposes of this subparagraph, the recovery
period is the 7-year period beginning with the
start-up year. "(vii)
For purposes of this subparagraph, the startup year
is the first year that the mutual or cooperative
electric company offers nondiscriminatory open
access or the calendar year which includes the date
of the enactment of this subparagraph, if later, at
the election of such company. "(viii)
A company shall not fail to be treated as a mutual
or cooperative electric company for purposes of this
paragraph or as a corporation operating on a
cooperative basis for purposes of section
1381(a)(2)(C) by reason of the treatment under
clause (i). "(ix)
For purposes of subparagraph (A), in the case of a
mutual or cooperative electric company, income
received, or accrued, indirectly from a member shall
be treated as an amount collected from members for
the sole purpose of meeting losses and expenses. "(x)
This subparagraph shall not apply to taxable years
beginning after
"(18)
TREATMENT OF MUTUAL OR COOPERATIVE ELECTRIC
COMPANIES. --In the case of a mutual or cooperative
electric company described in section 501(c)(12),
there shall be excluded income which is treated as
member income under subparagraph (H) thereof.".
"For treatment of income from load loss transactions of
organizations described in subsection (a)(2)(C), see
section 501(c)(12)(H).".
"(4)
PAYMENTS UNDER NATIONAL HEALTH SERVICE CORPS LOAN
REPAYMENT PROGRAM
"(D)
CERTAIN SALES NOT TO CONSTITUTE PROHIBITED
TRANSACTIONS. --For purposes of this part, the term
'prohibited transaction' does not include a sale of
property which is a real estate asset (as defined in
section 856(c)(5)(B)) if -- "(i)
the trust held the property for not less than 4
years in connection with the trade or business of
producing timber, "(ii)
the aggregate expenditures made by the trust, or a
partner of the trust, during the 4-year period
preceding the date of sale which -- "(I)
are includible in the basis of the property (other
than timberland acquisition expenditures), and "(II)
are directly related to operation of the property
for the production of timber or for the preservation
of the property for use as timberland, do
not exceed 30 percent of the net selling price of
the property, "(iii)
the aggregate expenditures made by the trust, or a
partner of the trust, during the 4-year period
preceding the date of sale which -- "(I)
are includible in the basis of the property (other
than timberland acquisition expenditures), and "(II)
are not directly related to operation of the
property for the production of timber, or for the
preservation of the property for use as timberland, do
not exceed 5 percent of the net selling price of the
property, "(iv)(I)
during the taxable year the trust does not make more
than 7 sales of property (other than sales of
foreclosure property or sales to which section 1033
applies), or "(II)
the aggregate adjusted bases (as determined for
purposes of computing earnings and profits) of
property (other than sales of foreclosure property
or sales to which section 1033 applies) sold during
the taxable year does not exceed 10 percent of the
aggregate bases (as so determined) of all of the
assets of the trust as of the beginning of the
taxable year, "(v)
in the case that the requirement of clause (iv)(I)
is not satisfied, substantially all of the marketing
expenditures with respect to the property were made
through an independent contractor (as defined in
section 856(d)(3)) from whom the trust itself does
not derive or receive any income, and "(vi)
the sales price of the property sold by the trust is
not based in whole or in part on income or profits,
including income or profits derived from the sale or
operation of such property.".
"(1)
ELECTION TO TREAT CERTAIN REFORESTATION EXPENDITURES
AS EXPENSES. -- "(A)
IN GENERAL. --In the case of any qualified timber
property with respect to which the taxpayer has made
(in accordance with regulations prescribed by the
Secretary) an election under this subsection, the
taxpayer shall treat reforestation expenditures
which are paid or incurred during the taxable year
with respect to such property as an expense which is
not chargeable to capital account. The reforestation
expenditures so treated shall be allowed as a
deduction. "(B)
DOLLAR LIMITATION. --The aggregate amount of
reforestation expenditures which may be taken into
account under subparagraph (A) with respect to each
qualified timber property for any taxable year shall
not exceed $10,000 ($5,000 in the case of a separate
return by a married individual (as defined in
section 7703)).".
"(A)
IN GENERAL. --Except as provided in subparagraph
(B), this section shall not apply to trusts and
estates. "(B)
AMORTIZATION DEDUCTION ALLOWED TO ESTATES. --The
benefit of the deduction for amortization provided
by subsection (a) shall be allowed to estates in the
same manner as in the case of an individual. The
allowable deduction shall be apportioned between the
income beneficiary and the fiduciary under
regulations prescribed by the Secretary. Any amount
so apportioned to a beneficiary shall be taken into
account for purposes of determining the amount
allowable as a deduction under subsection (a) to
such beneficiary.
Subtitle
C --Incentives for Small Manufacturers
"(2)
at least 90 percent of its gross income is derived
from -- "(A)
dividends, interest, payments with respect to
securities loans (as defined in section 512(a)(5)),
and gains from the sale or other disposition of
stock or securities (as defined in section 2(a)(36)
of the Investment Company Act of 1940, as amended)
or foreign currencies, or other income (including
but not limited to gains from options, futures or
forward contracts) derived with respect to its
business of investing in such stock, securities, or
currencies, and "(B)
net income derived from an interest in a qualified
publicly traded partnership (as defined in
subsection (h)); and".
"(5)
The term 'outstanding voting securities of such
issuer' shall include the equity securities of a
qualified publicly traded partnership (as defined in
subsection (h)).".
"(B)
not more than 25 percent of the value of its total
assets is invested in -- "(i)
the securities (other than Government securities or
the securities of other regulated investment
companies) of any one issuer, "(ii)
the securities (other than the securities of other
regulated investment companies) of two or more
issuers which the taxpayer controls and which are
determined, under regulations prescribed by the
Secretary, to be engaged in the same or similar
trades or businesses or related trades or
businesses, or "(iii)
the securities of one or more qualified publicly
traded partnerships (as defined in subsection
(h)).".
"(4)
APPLICATION TO REGULATED INVESTMENT COMPANIES. --For
purposes of this section, a regulated investment
company (as defined in section 851) holding an
interest in a qualified publicly traded partnership
(as defined in section 851(h)) shall be treated as a
taxpayer described in subsection (a)(2) with respect
to items attributable to such interest.".
"(1)
BOWS. -- "(A)
IN GENERAL. --There is hereby imposed on the sale by
the manufacturer, producer, or importer of any bow
which has a peak draw weight of 30 pounds or more, a
tax equal to 11 percent of the price for which so
sold. "(B)
ARCHERY EQUIPMENT. --There is hereby imposed on the
sale by the manufacturer, producer, or importer -- "(i)
of any part or accessory suitable for inclusion in
or attachment to a bow described in subparagraph
(A), and "(ii)
of any quiver or broadhead suitable for use with an
arrow described in paragraph (2), a
tax equal to 11 percent of the price for which so
sold.".
"(3)
ARROWS. -- "(A)
IN GENERAL. --There is hereby imposed on the sale by
the manufacturer, producer, or importer of any
arrow, a tax equal to 12 percent of the price for
which so sold. "(B)
EXCEPTION. --In the case of any arrow of which the
shaft or any other component has been previously
taxed under paragraph (1) or (2) -- "(i)
section 6416(b)(3) shall not apply, and "(ii)
the tax imposed by subparagraph (A) shall be an
amount equal to the excess (if any) of -- "(I)
the amount of tax imposed by this paragraph
(determined without regard to this subparagraph),
over "(II)
the amount of tax paid with respect to the tax
imposed under paragraph (1) or (2) on such shaft or
component. "(C)
ARROW. --For purposes of this paragraph, the term
'arrow' means any shaft described in paragraph (2)
to which additional components are attached.". (c) CONFORMING AMENDMENTS. --Section 4161(b)(2) is amended -- (1) by inserting "(other than broadheads)" after "point", and (2) by striking "ARROWS. --" in the heading and inserting "ARROW COMPONENTS. --". (d) EFFECTIVE DATE. --The amendments made by this section shall apply to articles sold by the manufacturer, producer, or importer after the date which is 30 days after the date of the enactment of this Act. |
