PUBLIC LAW 101-508 —NOV. 5, 1990 104 STAT. 1388-545 "(i) IN GENERAL.— Except as otherwise provided in this subparagraph, in the case of any partnership or S corporation, the determination of whether a partner's or shareholder's allocable share of any financing is nonqualified nonrecourse financing shall be made at the partner or shareholder level. " (ii) SPECIAL RULE FOR CERTAIN RECOURSE FINANCING OF s CORPORATION. —A shareholder of an S corporation shall be treated as liable for his allocable share of any financing provided by a qualified person to such corporation if— "(I) such financing is recourse financing (determined at the corporate level), and "(II) such financing is provided with respect to qualified business property of such corporation. "(iii) QUALIFIED BUSINESS PROPERTY.— For purposes of clause (ii), the term 'qualified business property means any property if— "(I) such property is used by the corporation in the active conduct of a trade or business, "(II) during the entire 12-month period ending on the last day of the taxable year, such corporation had at least 3 full-time employees who were not owner-employees (as defined in section 465(c)(7)(E)(i)) and substantially all the services of whom were services directly related to such trade or business, and "(III) during the entire 12-month period ending on the last day of such taxable year, such corporation had at least 1 full-time employee substantially all of the services of whom were in the active management of the trade or business, "(iv) DETERMINATION OF ALLOCABLE SHARE.—The determination of any partner's or shareholder's allocable share of any financing shall be made in the same manner as the credit allowable by section 38 with respect to such property. " (F) SPECIAL RULES FOR ENERGY PROPERTY.— Rules similar to the rules of subparagraph (F) of section 46(c)(8) (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) shall apply for purposes of this paragraph. " (2) SUBSEQUENT DECREASES IN NONQUAUFIED NONRECOURSE FINANCING WITH RESPECT TO THE PROPERTY.— "(A) IN GENERAL. —If, at the close of a taxable year following the taxable year in which the property was placed , in service, there is a net decrease in the amount of nonqualified nonrecourse financing with respect to such property, such net decrease shall be taken into account as an increase in the credit base for such property in accordance with subparagraph (C). " (B) CERTAIN TRANSACTIONS NOT TAKEN INTO ACCOUNT.— For purposes of this paragraph, nonqualified nonrecourse financing shall not be treated as decreased through the surrender or other use of property financed by nonqualified nonrecourse financing. "(C) MANNER IN WHICH TAKEN INTO ACCOUNT. —
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