118 STAT. 1445 PUBLIC LAW 108–357—OCT. 22, 2004 (A) in paragraph (1) by inserting before the period at the end of the first sentence the following: ‘‘unless para graph (5) applies’’, and (B) by adding at the end the following new paragraph: ‘‘(5) ENTITIES TO WHICH PARAGRAPH APPLIES.—This para graph applies to a corporation, trust, or association— ‘‘(A) which is not a real estate investment trust to which the provisions of this part apply for the taxable year due to one or more failures to comply with one or more of the provisions of this part (other than subsection (c)(6) or (c)(7) of section 856), ‘‘(B) such failures are due to reasonable cause and not due to willful neglect, and ‘‘(C) if such corporation, trust, or association pays (as prescribed by the Secretary in regulations and in the same manner as tax) a penalty of $50,000 for each failure to satisfy a provision of this part due to reasonable cause and not willful neglect.’’. (4) DEDUCTION OF TAX PAID FROM AMOUNT REQUIRED TO BE DISTRIBUTED.—Subparagraph (E) of section 857(b)(2) is amended by striking ‘‘(7)’’ and inserting ‘‘(7) of this subsection, section 856(c)(7)(B)(iii), and section 856(g)(1).’’. (5) EXPANSION OF DEFICIENCY DIVIDEND PROCEDURE.—Sub section (e) of section 860 is amended by striking ‘‘or’’ at the end of paragraph (2), by striking the period at the end of paragraph (3) and inserting ‘‘; or’’, and by adding at the end the following new paragraph: ‘‘(4) a statement by the taxpayer attached to its amendment or supplement to a return of tax for the relevant tax year.’’. (g) EFFECTIVE DATES.— (1) IN GENERAL.—Except as provided in paragraph (2), the amendments made by this section shall apply to taxable years beginning after December 31, 2000. (2) SUBSECTIONS (c) THROUGH (f).—The amendments made by subsections (c), (d), (e), and (f) shall apply to taxable years beginning after the date of the enactment of this Act. SEC. 244. SPECIAL RULES FOR CERTAIN FILM AND TELEVISION PRODUCTIONS. (a) IN GENERAL.—Part VI of subchapter B of chapter 1 is amended by inserting after section 180 the following new section: ‘‘SEC. 181. TREATMENT OF CERTAIN QUALIFIED FILM AND TELEVISION PRODUCTIONS. ‘‘(a) ELECTION TO TREAT COSTS AS EXPENSES.— ‘‘(1) IN GENERAL.—A taxpayer may elect to treat the cost of any qualified film or television production as an expense which is not chargeable to capital account. Any cost so treated shall be allowed as a deduction. ‘‘(2) DOLLAR LIMITATION.— ‘‘(A) IN GENERAL.—Paragraph (1) shall not apply to any qualified film or television production the aggregate cost of which exceeds $15,000,000. ‘‘(B) HIGHER DOLLAR LIMITATION FOR PRODUCTIONS IN CERTAIN AREAS.—In the case of any qualified film or tele vision production the aggregate cost of which is signifi cantly incurred in an area eligible for designation as— 26 USC 856 note.
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