PUBLIC LAW 97-414—JAN. 4, 1983
96 STAT. 2055
reduced by the sum of the credits allowable under a section of this subpart having a lower number or letter designation than this section, other than the credits allowable by sections 31, 39, and 43. For purposes of the preceding sentence, the term 'tax imposed by this chapter' shall not include any tax treated as not imposed by this chapter under the last sentence of section 53(a). (3) SPECIAL LIMITATIONS ON FOREIGN TESTING.—
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"(A) IN GENERAL.—No credit shall be allowed under this section with respect to any clinical testing conducted outside the United States unless— "(i) such testing is conducted outside the United States because there is an insufficient testing population in the United States, and "(ii) such testing is conducted by a United States person or by any other person who is not related to the taxpayer to whom the designation under section 526 of the Federal Food, Drug, and Cosmetic Act applies. "(B) SPECIAL LIMITATION FOR CORPORATIONS TO WHICH SEC-
TION 934(b) OR 936 APPLIES.—No Credit shall be allowed under this section with respect to any clinical testing conducted by a corporation to which section 934(b) applies or to which an election under section 936 applies. "(4) CERTAIN RULES MADE APPLICABLE.—Rules similar to
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rules of paragraphs (1) and (2) of section 44F(f) shall apply for purposes of this section. "(5) ELECTION.—This section shall apply to any taxpayer for any taxable year only if such taxpayer elects (at such time and in such manner as the Secretary may by regulations prescribe) to have this section apply for such taxable year. "(e) TERMINATION.—This section shall not apply to any amount paid or incurred after December 31, 1987." (b)(l) Section 280C of such Code (relating to denial of deduction for portion of wages for which credit is claimed under section 40 or 44B) is amended by adding at the end thereof the following new subsection:
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26 USC 280C.
"(c) CREDIT FOR QUALIFIED CUNICAL TESTING EXPENSES FOR CERTAIN DRUGS.—
"(1) IN GENERAL.—No deduction shall be allowed for that portion of the qualified clinical testing expenses (as defined in section 44H(b)) otherwise allowable as a deduction for the taxable year which is equal to the amount of the credit allowable for the taxable year under section 44H (determined without regard to subsection (d)(2) thereof). "(2) SIMILAR RULE WHERE TAXPAYER CAPITAUZES RATHER THAN DEDUCTS EXPENSES.—If—
"(A) the amount of the credit allowable for the taxable year under section 44H (determined without regard to subsection (d)(2) thereof), exceeds "(B) the amount allowable as a deduction for the taxable year for qualified clinical testing expenses (determined without regard to paragraph (1)), the amount chargeable to capital account for the taxable year for such expenses shall be reduced by the amount of such excess. "(3) CONTROLLED GROUPS.—In the case of a corporation which is a member of a controlled group of corporations (within the meaning of section 44F(f)(5)) or a trade or business which is
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