90 STAT. 1592
PUBLIC LAW 94-455—OCT. 4, 1976 " (C) O W N E R S H I P IXTEREST.—For purposes of t h i s subsec-
tion, a person's 'ownership interest' i n a qualified film shall be determined on the basis of his proportionate share of any loss which may be incurred with respect to the production costs of such film. " (2) APPLICABLE PERCENTAGE TO BE 66%.—Except as provided
in paragraph (3), the applicable percentage under section 46(c) (2) for any qualified film shall be 66% percent. " (3) ELECTION OF 9O-PERCENT RULE.—
" (A) IN GENERAL.—If the taxpayer makes an election under this paragraph, the applicable percentage under section 46 (c)(2) shall be determined as if the useful life of the film would have expired at the close of the first taxable year by the close of which the aggregate amount allowable as a deduction under section 167 would equal or exceed 90 percent of the basis of the film. " (B) M A K I N G o r ELECTION.—An election under this paragraph shall be made a t such time and in such manner as the Secretary may by regulations prescribe. Such an election shall apply for the taxable year for which it is made and for all subsequent taxable years and may be revoked only with the consent of the Secretary. " (C) W H O MAY ELECT.—If for any prior taxable year paragraph (2) of this subsection applied to the taxpayer or any related business entity, or if for the taxable year paragraph (2) applies to any related business entity, an election under this paragraph may be made by the taxpayer only with the consent of the Secretary. "(D)
"Beneficial interest."
RELATED BUSINESS E N T I T Y. — T w o or more corpora-
tions, partnerships, trusts, estates, proprietorships, or other entities shall be treated as related business entities if 50 percent or more of the beneficial interest in each of such entities is owned by the same or related persons (taking into account only persons who own at least 10 percent of such beneficial interest). For purposes of this subparagraph, a person is a related person to another person if— " (i) such persons are component members of a controlled group of corporations (within the meaning of section 1563(a), except that section 1563(b)(2) shall not apply and except that 'more than 50 percent' shall be substituted for ' a t least 80 percent' each place i t appears in section 1563(a)), or " ( i i) the relationship between such persons would result in a disallowance of losses under section 267 or 707 (b), except that for these purposes a family of an individual includes only his spouse and minor children. For purposes of this subparagraph, the term 'beneficial interest' means voting stock in the case of a corporation, profits interest or capital interest in the case of a partnership, or beneficial interest in the case of a trust or estate. "(4)
PREDOMINANT USE TEST; QUALIFIED INVESTMENT.—In the
case of any qualified film— " (A) section 48(a)(2) shall not apply, and " (B) in determining qualified investment under section 4 6 (c)(1), there shall be issued (in lieu of the basis of the property) a n amount equal to the qualified United States production costs (as defined in paragraph (5)).
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