102 STAT. 3436
PUBLIC LAW 100-647—NOV. 10, 1988 (12) Subsection (h) of section 32 of the 1986 Code is amended by striking out "for taxpayers other than corporations". (13XA) Subsection (d) of section 2 of the 1986 Ckxle is amended by striking out "the tax imposed by section 1" and inserting in lieu thereof "the taxes imported by sections 1 and 55". (B) Subsection (d) of section 11 of the 1986 Code is amended by striking out "the tax imposed by subsection (a)" and inserting in lieu thereof "the taxes imposed by subsection (a) and section 55".
SEC. 1008. AMENDMENTS RELATED TO TITLE VIII OP THE REFORM ACT. (a) AMENDMENTS RELATED TO SECTION 801 OF THE REFORM ACT.—
Regulations.
dXA) Subparagraph (B) of section 448(d)(2) of the 1986 Code (defining qualified person£d service corporation) is amended by striking out "or indirectly" and inserting in lieu thereof "(or indirectly through 1 or more partnerships, S corporations, or qusdified personal service corporations not described in paragraph (2) or (3) of subsection (a))". (B) Section 448(d) of the 1986 Oxie is amended by adding a t the end thereof the following new paragraph: "(8) UsE OF RELATED PARTIES, ETC.—The Secretary shall prescribe such regulations as may be necessary to prevent the use of related parties, pass-thru entities, or intermediaries to avoid the application of this section." (2) Subparagraph (C) of section 448(d)(4) of the 1986 Code (relating to special rules for application of paragraph (2)) is amended by striking out "all such members" and inserting in lieu thereof "such group". (3) Paragraph (2) of section 461(i) of the 1986 Code is amended to read as follows: "(2) SPECIAL RULE FOR SPUDDING OF OIL OR GAS WELLS.—
"(A) IN GENERAL.—In the case of a tax shelter, economic performance with respect to amounts paid during the taxable year for drilling an oil or gas well shall be treated as having occurred within a taxable year if drilling of the well commences before the close of the 90th day after the close of the taxable year. "(B) DEDUCTION LIMITED TO CASH BASIS.— "(i) TAX SHELTER PARTNERSHIPS.—In
the case of a tax shelter which is a partnership, in applying section 704(d) to a deduction or loss for any taxable year attributable to an item which is deductible by reason of subparagraph (A), the term 'cash basis' shall be substituted for the term 'adjusted basis*. "(ii) OTHER TAX SHELTERS.—Under regulations prescribed by the Secretary, in the case of a tax shelter other than a partnership, the aggregate amount of the deductions allowable by reason of subparagraph (A) for any taxable year shall be limited in a manner similar to the limitation under clause (i).
"(C) CASH BASIS DEFINED.—For purposes of subparagraph
(B), a partner's cash basis in a partnership shall be equal to the adjusted basis of such partner's interest in the partnership, determined without regard to— "(i) any liability of the partnership, and "(ii) any amount borrowed by the partner with respect to such partnership which—
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