100 STAT. 2190
PUBLIC LAW 99-514—OCT. 22, 1986 "(i) new buildings which are federally subsidized for the taxable year, and "(ii) existing buildings. "(2) BUILDINGS PLACED IN SERVICE AFTER 1987.— "(A) IN GENERAL.—In the case of any qualified lowincome building placed in service by the taxpayer after 1987, the term 'applicable percentage' means the appropriate percentage prescribed by the Secretary for the month in which such building is placed in service. "(B) METHOD OF PRESCRIBING PERCENTAGES.—The percent-
ages prescribed by the Secretary for any month shall be percentages which will yield over a 10-year period amounts of credit under subsection (a) which have a present value equal to— "(i) 70 percent of the qualified beisis of a building described in paragraph (I)(A), and "(ii) 30 percent of the qualified basis of a building described in paragraph (I)(B). "(C) METHOD OF DISCOUNTING.—The present value under subparagraph (B) shall be determined— "(i) as of the last day of the 1st year of the 10-year period referred to in subparagraph (B), "(ii) by using a discount rate equal to 72 percent of the average of the annual Federal mid-term rate and the annual Federal long-term rate applicable under section 1274(d)(l) to the month in which the building was placed in service and compounded annually, and "(iii) by assuming that the credit allowable under this section for any year is received on the last day of such year. "(3) CROSS REFERENCE.— "For treatment of certain rehabilitation expenditures as separate new buildings, see subsection (e).— QUALIFIED BASIS; QUALIFIED LOW-INCOME BUILDING.—For pur-
"(c) poses of this section—
"(1) QUALIFIED BASIS.—
"(A) DETERMINATION.—The qualified basis of any qualified low-income building for any taxable year is an amount equal to— "(i) the applicable fraction (determined as of the close of such taxable year) of "(ii) the eligible basis of such building (determined under subsection (d)(5)). "(B) APPLICABLE FRACTION.—For purposes of subparagraph (A), the term 'applicable fraction' means the smaller of the unit fraction or the floor space fraction. "(C) UNIT FRACTION.—For purposes of subparagraph (B),
the term 'unit fraction' means the fraction— "(i) the numerator of which is the number of lowincome units in the building, and "(ii) the denominator of which is the number of residential rental units (whether or not occupied) in such building. "(D) FLOOR SPACE FRACTION.—For purposes of subpara-
graph (B), the term 'floor space fraction' means the fraction—
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