83 STAT. ]
PUBLIC LAW 91-172-DEC. 30, 1969
547
"(ii) does not provide for any adjustment of the amount of the annuity payments by reference to the income received from the transferred property or any other property. (6) CERTAIN FEDERAL FINANCING.—For purposes of this section, the terai 'acquisition indebtedness' does not include an obligation, to the extent that it is insured by the Federal Housing Administration, to finance the purchase, rehabilitation, or construction of housing for low and moderate income persons. " (7) AVERAGE ACQUISITION INDEBTEDNESS.—For purposes of this section, the term 'average acquisition indebtedness' for any taxable year with respect to a debt-financed property means the average amount, determined under regulations prescribed by the Secretary or his delegate, of the acquisition indebtedness during the period the property is held by the organization during the taxable year, except that for the purpose of computing the percentage of any gain or loss to be taken into account on a sale or other disposition of debt-financed property, such term means the highest amount of the acquisition indebtedness with respect to such property during the 12-month period ending with the date of the sale or other disposition. " (d) BASIS or DEBT-FINANCED PROPERTY ACQUIRED I N CORPORATE
LIQUIDATION.—For purposes of this subtitle, if the property was acquired in a complete or partial liquidation of a corporation in exchange for its stock, the basis of the property shall be the same as it would be in the hands of the transferor corporation, increased by the amount of gain recognized to the transferor corporation upon such distribution and by the amount of any gain to the organization which was included, on account of such distribution, in unrelated business taxable income under subsection (a). "(e) ALLOCATION RULES.—Where debt-financed property is held for purposes described in subsection (b)(1)(A), (B), (C), o r (D) as well as for other purposes, proper allocation shall be made with respect to basis, indebtedness, and income and deductions. The allocations required by this section shall be made in accordance with regulations prescribed by the Secretary or his 4elegate to the extent proper to carry out the purposes of this section." (2) RELATED AMENDMENTS.— 76 (A) Section 48(a)(4) (relating to definition of section 38 26 Stat. 967. u s e 48. property) is amended by adding at the end thereof the following new sentence: "If the property is debt-financed property (as defined in section 514(c)), the basis or cost of such ^o®'- p- 543. property for purposes of computing qualified investment under section 46(c) shall include only that percentage of 76 Stat. 963. the basis or cost which is the same percentage as is used under section 514(b), for the year the property is placed in service, in computing the amount of gross income to be taken into account during such taxable year with respect to such property." (B) The second sentence of section 681(a) (relating to ^^^ Stat. 232. limitation on charitable deduction of taxable trusts) is amended by striking out the words "certain leases" and inserting in lieu thereof "certain property acquired with borrowed funds". (C) Section 1443(a) (relating to withholding of tax on ^"'^' P 528. payments to foreign tax-exempt organizations) is amended by striking out "rents" and inserting in lieu thereof "income".
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