PUBLIC LAW 94-455—OCT. 4, 1976
90 STAT. 1527
"(f) TRANSITIONAL RULE FOR 1976.—In the case of amounts paid or accrued by the taxpayer in a taxable year beginning in 1976, the percentage of such amount allowable under this section for— "(1) the taxable year beginning in 1976 shall be 50 percent, and "(2) each amortization year thereafter shall be 16% percent." (b) CLERICAL AMENDMENT.—The table of sections for such part VI is amended by adding at the end thereof the following new item: "Sec. 189. Amortization of real property construction period interest and taxes." (c) EFFECTIVE DATE.—The amendments made by this section shall
26 USC 189 note.
apply— (1) in the case of nonresidential real property, if the construction period begins after December 31, 1975, (2) in the case of residential real property (other than lowincome housing), to taxable years beginning after December 31, 1977, and (3) in the case of low-income housing, to taxable years beginning after December 31, 1981. For purposes of this subsection, the terms "nonresidential real prop- Definitions. erty", "residential real property (other than low-income housing)", "low-income housing", and "construction period" have the same meaning as when used in section 189 of the Internal Revenue Code of 1954 (as added by subsection (a) of this section). SEC. 202. RECAPTURE OF DEPRECIATION ON REAL PROPERTY.
(a) IN GENERAL.—Subsection (a) of section 1250 (relating to gain 26 USC 1250. from dispositions of certain depreciable realty) is amended to read as follows: "(a) GENERAL RULE.—Except as otherwise provided in this section— " (1) ADDITIONAL DEPRECIATION AFTER DECEMBER 31, 1975.—
"(A) IN GENERAL.—If section 1250 property is disposed of after December 31, 1975, then the applicable percentage of the lower of— "(i) that portion of the additional depreciation (as defined in subsection (b)(1) or (4)) attributable to periods after December 31, 1975, in respect of the property, or "(ii) the excess of the amount realized (in the case of a sale, exchange, or involuntary conversion), or the fair market value of such property (in the case of any other disposition), over the adjusted basis of such property, shall be treated as gain which is ordinary income. Such gain shall be recognized notwithstanding any other provision of this subtitle. " (B) APPLICABLE PERCENTAGE.—For purposes of subpara"Applicable graph (A), the term 'applicable percentage' means— "(i) in the case of section 1250 property with respect percentage." to which a mortgage is insured under section 221(d)(3) or 236 of the National Housing Act, or housing financed 26 USC 1715/, or assisted by direct loan or tax abatement under similar 1715Z-1. provisions of State or local laws and with respect to which the owner is subject to the restrictions described in section 1039(b)(1)(B), 100 percent minus 1 percentage point for each full month the property was held after the date the property was held 100 full months';
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