100 STAT. 2184
PUBLIC LAW 99-514—OCT. 22, 1986 not apply to that portion of the basis of any property which is attributable to qualified rehabilitation expenditures." (b) SPECIAL RULES FOR QUALIFIED REHABIUTATED BUILDINGS.—
Subsection (g) of section 48 (relating to special rules for qualified rehabilitated buildings) is amended to read as follows: "(g) SPECIAL RULES FOR QUALIFIED REHABILITATED BUILDINGS.—For
purposes of this subpart— "(1) QUALIFIED REHABIUTATED BUILDING.—For purposes of this subsection— "(A) IN GENERAL.—The term 'qualified rehabilitated building' means any building (and its structural components) if— "(i) such building has been substantially rehabilitated, "(ii) such building was placed in service before the beginning of the rehabilitation, and "(iii) in the case of any building other than a certified historic structure, in the rehabilitation process— "(I) 50 percent or more of the existing external walls of such building are retained in place as external walls, "(II) 75 percent or more of the existing external walls of such building are retained in place as internal or external walls, and "(III) 75 percent or more of the existing internal structural framework of such building is retained in place. "(B) BUILDING MUST BE FIRST PLACED IN SERVICE BEFORE
1936.—In the case of a building other than a certified historic structure, a building shall not be a qualified rehabilitated building unless the building was first placed in service before 1936. "(C) SUBSTANTIALLY REHABIUTATED DEFINED.—
"(i) IN GENERAL.—For purposes of subparagraph (A)(i), a building shall be treated as having been substantially rehabilitated only if the qualified rehabilitation expenditures during the 24-month period selected by the taxpayer (at the time and in the manner prescribed by regulations) and ending with or within the taxable year exceed the greater of— "(I) the adjusted basis of such building (and its structural components), or "(II) $5,000. The adjusted basis of the building (and its structural components) shall be determined sis of the beginning of the 1st day of such 24-month period, or of the holding period of the building, whichever is later. For purposes of the preceding sentence, the determination of the beginning of the holding period shall be made without regard to any reconstruction by the taxpayer in connection with the rehabilitation. "(ii) SPECIAL RULE FOR PHASED REHABILITATION.—In
the case of any rehabilitation which may reasonably be expected to be completed in phases set forth in architectural plans and specifications completed before the rehabilitation begins, clause (i) shall be applied by substituting *60-month period' for '24-month period.
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