98 STAT. 636 ft^j
PUBLIC LAW 98-369—JULY 18, 1984 property) an amount equal to the production costs which are allocable to the United States (as determined under rules similar to the rules of section 48(k)(5)(D)). "(4) OWNERSHIP INTEREST.—For purposes of determining the credit allowable under section 38, the ownership interest of any person in a sound recording shall be determined on the basis of his proportionate share of any loss which may be incurred with respect to the production costs of such sound recording. "(5) SOUND RECORDING.—For purposes of this subsection, the term 'sound recording' means any sound recording described in section 280(c)(2).
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Post, p. 827.
"(6) PRODUCTION COSTS—
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"(A) IN GENERAL.—For purposes of this subsection, the term 'production costs' includes— "(i) a reasonable allocation of general overhead costs, "(ii) compensation for services performed by song writers, artists, production personnel, directors, producers, and similar personnel, "(iii) costs of 'first' distribution of records or tapes, and "(iv) the cost of the material being recorded.
f
"(B) CERTAIN COSTS NOT TAKEN INTO ACCOUNT.—Except as
provided in subparagraph (C), the term 'production costs' shall not include— "(i) 'residuals' payable under contracts with labor organizations, or "(ii) participations or royalties payable as compensation to song writers, artists, production personnel, directors, producers, and similar personnel, or "(iii) any other contingent amounts. "(C)
j^i O.; s E
26 USC 168.
Ante, p. 635. . - Ai,!. t -
^
CERTAIN
CONTINGENT
AMOUNTS
TAKEN
INTO
ACCOUNT.—In the case of any amount which is described in subparagraph (B) and which is incurred in the taxable year in which the sound recording is placed in service or the next taxable year— "(i) subparagraph (B) shall not apply, and "(ii) for purposes of sections 38 and 168, the taxpayer shall be treated as having placed in service in each such taxable year 3-year recovery property with a basis equal to the amount so incurred in such taxable year. "(7) ELECTION MADE SEPARATELY.—An election under paragraph (1) shall be made separately with respect to each sound recording and must be made by all persons having an ownership interest in such recording. "(8) UNITED STATES.—For purposes of this subsection, the term 'United States' includes the possessions of the United States." (2) CONFORMING AMENDMENTS.—Section 168(f) (relating to special rules), as amended by this Act, is amended by adding at the end thereof the following new paragraph: "(14) SPECIAL RULES FOR SOUND RECORDINGS.—In the case of a sound recording (within the meaning of section 48(r)), the unadjusted basis of such property shall be equal to the production costs (within the meaning of section 48(r)(6))." (b) FILMS AND OTHER PROPERTY.— (1) FILMS AND VIDEO TAPES NOT TREATED AS RECOVERY PROP-
26 USC 168.
ERTY.—Section 168(e) (relating to property excluded from appli-
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