PUBLIC LAW 101-239—DEC. 19, 1989 103 STAT. 2377 apply only if the bid could not have been revoked or altered at any time on or after July 11, 1989. (3) SPECIAL RULE FOR CERTAIN SHIP CONTRACTS.— The amend- \_ ments made by this section shall not apply in the case of a qualified ship contract (as defined in section 10203(b)(2)(B) of the Revenue Act of 1987). SEC. 7622. CHANGES IN TREATMENT OF TRANSFERS OF FRANCHISES, TRADEMARKS, AND TRADE NAMES. (a) CONTINGENT PAYMENTS.— Paragraph (1) of section 1253(d) (relating to treatment of payments by transferee) is amended to read as follows: "(1) CONTINGENT SERIAL PAYMENTS. — "(A) IN GENERAL.—Any amount described in subpara- graph (B) which is paid or incurred during the taxable year on account of a transfer, sale, or other disposition of a franchise, trademark, or trade name shall be allowed as a deduction under section 162(a) (relating to trade or business expenses). (B) AMOUNTS TO WHICH PARAGRAPH APPLIES.— An amount is described in this subparagraph if it— "(i) is contingent on the productivity, use, or disposi- tion of the franchise, trademark, or trade name, and "(ii) is paid as part of a series of payments— .,,,.. "(I) which are payable not less frequently than * annually throughout the entire term of the trans- fer agreement, and "(II) which are substantisdly equal in amount (or payable under a fixed formula)." (b) $100,000 LIMITATION ON CERTAIN PAYMENTS. — (1) IN GENERAL. —Paragraph (2) of section 1253(d) is amended by adding at the end thereof the following new subparagraph: "(B) $100,000 LIMFTATION ON DEDUCTIBILITY OF PRINCIPAL SUM. —Subparagraph (A) shall not apply if the principal I"' sum referred to in such subparagraph exceeds $100,000. For purposes of the preceding sentence, all payments which are part of the same transaction (or a series of related trans- actions) shall be taken into account as payments with respect to each such transaction," (2) CONFORMING AMENDMENTS.—Paragraph (2) of section 1253(d) is amended— (A) by striking all that precedes "If and inserting: " (2) CERTAIN PAYMENTS IN DISCHARGE OF PRINCIPAL SUMS. — " (A) IN GENERAL. —", and (B) by redesignating subparagraphs (A), (B), and (C) as clauses (i), (ii), and (iii), respectively, and by redesignating
clauses (i) and (ii) of subparagraph (B) as subclauses (I) and (II), respectively, (c) OTHER PAYMENTS, ETC. — Section 1253(d) is amended by adding at the end thereof the following new paragraphs: "(3) OTHER PAYMENTS, — "(A) IN GENERAL.— Any amount paid or incurred on ac- count of a transfer, sale, or other disposition of a franchise, trademark, or trade name to which paragraph (1) or (2) does not apply shall be treated as an amount chargeable to capital account. "(B) ELECTION TO RECOVER AMOUNTS OVER 25 YEARS.—
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