100 STAT. 2360
PUBLIC LAW 99-514—OCT. 22, 1986 "(1) IN GENERAL.—The term 'Federal long-term contract' means any long-term contract— "(A) to which the United States (or any agency or instrumentality thereof) is a party, or "(B) which is a subcontract under a contract described in subparagraph (A). "(2) SPECIAL RULES FOR CERTAIN TAXABLE ENTITIES.—For purposes of paragraph (1), the rules of section 168(h)(2)(D) (relating to certain taxable entities not treated as instrumentalities) shall apply. "(e) EXCEPTION FOR CERTAIN CONSTRUCTION (IJONTRACTS.—
"(1) IN GENERAL.—Subsections (a), (b), and (c)(1) and (2) shall not apply to any construction contract entered into by a taxpayer— "(A) who estimates (at the time such contract is entered into) that such contract will be completed within the 2-year period beginning on the contract commencement date of such contract, and "(B) whose average annual gross receipts for the 3 taxable years preceding the taxable year in which such contract is entered into do not exceed $10,000,000. "(2) DETERMINATION OF TAXPAYER'S GROSS RECEIPTS.—For purposes of paragraph (1), the gross receipts of— "(A) all trades or businesses (whether or not incorporated) which are under common control with the taxpaver (within the meaning of section 52(b)), and (B) all members of any controlled group of corporations of which the taxpayer is a member, for the 3 taxable years of such persons preceding the taxable year in which the contract described in paragraph (1) is entered into shall be included in the gross receipts of the taxpayer for the period described in paragraph (I)(B). The Secretary shall prescribe regulations which provide attribution rules that take into account, in addition to the persons and entities described in the preceding sentence, taxpayers who engage in construction contracts through partnerships, joint ventures, and corporations. "(3) CONTROLLED GROUP OF CORPORATIONS.—For purposes of
this subsection, the term 'controlled group of corporations' has the meaning given to such term by section 1563(a), except that— "(A) more than 50 percent' shall be substituted for 'at leeist 80 percent' each place it appears in section 1563(a)(l), and "(B) the determination shall be made without regard to subsections (a)(4) and (e)(3)(C) of section 1563. "(4) (CONSTRUCTION CONTRACT,—For purposes of this subsection, the term 'construction contract' means any contract for the building, construction, reconstruction, or rehabilitation of, or the installation of any integral component to, or improvements of, real property. "(f) LONG-TERM CONTRACT.—For purposes of this section— "(1) IN GENERAL.—The term 'long-term contract' means any contract for the manufacture, building, installation, or construction of property if such contract is not completed within the taxable year in which such contract is entered into. "(2) SPECIAL RULE FOR MANUFACTURING CONTRACTS.—A contract for the manufacture of property shall not be treated as a
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