648
PUBLIC LAW 91-172-DEC. 30, 1969
[83 STAT.
payment not described in paragraph (1) which is made in discharge of a principal sum agreed upon in the transfer agreement shall be allowed as a deduction— " (A) in the case of a single payment made in discharge of such principal sum, ratably over the taxable years in the period beginning with the taxable year in which the payment IS made and ending with the ninth succeeding taxable year or ending with the last taxable year beginning in the period of the transfer agreement, whichever period is shorter; " (B) in the case of a payment which is one of a series of approximately equal payments made in discharge of such prmcipal sum, which are payable over— "(i) the period of the transfer agreement, or "(ii) a period of more than 10 taxable years, whether ending before or after the end of the period of the transfer agreement, in the taxable year in which the payment is made; and " (C) in the case of any other payment, in the taxable year or years specified in regulations prescribed by the Secretary or his delegate, consistently with the preceding provisions of this paragraph. "(e) EXCEPTION.—This section shall not apply to the transfer of a franchise to engage in professional football, basketball, baseball, or other professional sport." (2) CONFORMING AMENDMENTS,—
P°^^'P-7io.
68A Stat. 299; '^^26 USC%i6.
Ante, p. 647.
(A) Section 162(h) (as redesignated by section 902) is amended by striking out "For" and inserting in lieu thereof "(1) For", and by adding at the end thereof the following: "(2) For special rule relating to the treatment of payments by a transferee of a franchise, trademark, or trade name, see section 1253." (B) Section 1016(a) (relating to adjustments to basis) is amended by striking out the period at the end of paragraph (21) and inserting in lieu thereof a semicolon, and by inserting after paragraph (21) the following new paragraph: " (22) for amounts allowed as deductions for payments made on account of transfers of franchises, trademarks, or trade names Under section 1253(d)(2)." (C) The table of sections for part IV of subchapter P of chapter 1 is amended by adding at the end thereof the following new item: "Sec. 1253. Transfers of franchises, trademarks, and trade names." (d) EFFECTIVE DATES.—
(1) The amendment made by subsection (a) shall apply to sales or other dispositions after October 9, 1969. (2) The amendment made by subsection (b) shall apply to taxable years beginning after December 31, 1969. (3) The amendments made by subsection (c) shall apply to transfers after December 31, 1969, except that section 1253(d)(1) of the Internal Revenue Code of 1954 (as added by subsection (c)) shall, at the election of the taxpayer (made at such time and in such manner as the Secretary or his delegate may by regulations prescribe), apply to transfers before January 1, 1970, but only with respect to payments made in taxable years ending after December 31, 1969, and beginning before January 1, 1980.
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