80 STAT.]
PUBLIC LAW 8 9 - 7 2 2 - N O V. 2, 1966
1151
attributable to the carryback of any unused investment credit shall not expire before the close of December 31, 1966. SEC. 3. (a) Section 6501 of the Internal Revenue Code of 1954 (relating to limitations on assessment and collection) is amended by inserting after subsection (1) the following new subsection:
26 USC esoi.
" (m) TENTATIVE CARRYBACK ADJUSTMENT ASSESSMENT PERIOD.—
I n a case where an amount has been applied, credited, or refunded under section 6411 (relating to tentative carryback adjustments) by reason of a net operating loss carryback or an investment credit carryback to a prior taxable year, the period described in subsection (a) of this section for assessing a deficiency for such prior taxable year shall be extended to include the period described in subsection (h) or (j), whichever is applicable; except that the amount which may be assessed solely by reason of this subsection shall not exceed the amount so applied, credited, or refunded under section 6411, reduced by any amount which may be assessed solely by reason of subsection (h) or (j), as the case may be." (b) The amendment made by subsection (a) shall apply in any case Avhere the application under section 6411 of the Internal Revenue Code of 1954 is filed after the date of the enactment of this Act. Approved November 2, 1966.
Public Law 89-722 AN ACT
November 2, 1966
To amend the Internal Revenue Code of 1954 to allow a deduction for additions to a reserve for certain guaranteed debt obligations, and for other purposes.
[H. R. 11782]
Be it eruwted by the Senate and House of Representatives of the United States of America in Congress assembled. That (a) section 166 T a x e s. of the Internal Revenue Code of 1954 (relating to bad debts) is tain^gua^ant°e'^e"'^" amended by redesignating subsection (g) as subsection (h), and by debt obligations. 68A Stat. 50. inserting alter subsection (f) a new subsection (g) as follows: 26 USC 166. " (g) RESERVE FOR CERTAIN GUARANTEED DEBT OBLIGATIONS.— "(1) ALLOWANCE OF DEDUCTION.—In the case of a taxpayer
who is a dealer in property, in lieu of any deduction under subsection (a), there shall be allowed (in the discretion of the Secretary or his delegate) for any taxable year ending after October 21, 1965, a deduction— " (A) for a reasonable addition to a reserve for bad debts which ma}^ arise out of his liability as a guarantor, endorser, or indemnitor of debt obligations arising out of the sale by him of real property or tangible personal property (including related services) in the ordinary course of his trade or business; and " (B) for the amount of any reduction in the suspense account required by paragraph (4)(B)(i). "(2) DEDUCTION DISALLOWED I N OTHER CASES.—Except as provided in paragraph (1), no deduction shall be allowed to a taxpayer for any addition to a reserve for bad debts which may arise out of his liability as guarantor, endorser, or indemnitor of debt obligations. " (3) OPENING BALANCE.—The opening balance of a reserve
described in paragraph (1)(A) for the first taxable year ending after October 21, 1965, for which a taxpayer maintains such reserve shall, under regulations prescribed by the Secretary or his delegate, be determined as if the taxpayer had maintained such reserve for the preceding taxable years.
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