100 STAT. 2166
PUBLIC LAW 99-514—OCT. 22, 1986
Subtitle B—Repeal of Regular Investment Tax Credit SEC. 211. REPEAL OF REGULAR INVESTMENT TAX CREDIT. (a) GENERAL RULE.—Subpart E of part IV of subchapter A of chapter 1 (relating to investment tax credit) is amended by adding at the end thereof the following new section: "SEC. 49. TERMINATION OF REGULAR PERCENTAGE. "(a) GENERAL RULE.—For purposes of determining the amount of the investment tax credit determined under section 46, the regular percentage shall not apply to any property placed in service after December 31, 1985. "(b) EXCEPTIONS.—Subject to the provisions of subsections (c) and (d), subsection (a) shall not apply to the following: "(1) TRANSITION PROPERTY.—Property which is transition property (within the meaning of subsection (e)). "(2) QUALIFIED PROGRESS EXPENDITURE FOR PERIODS BEFORE
JANUARY 1, 1986.—In the case of any taxpayer who has made an election under section 46(d)(6), the portion of the adjusted basis of any progress expenditure property attributable to qualified progress expenditures for periods before January 1, 1986. "(3) QUALIFIED TIMBER PROPERTY.—The portion of the adjusted basis of qualified timber property which is treated as section 38 property under section 48(a)(1)(F). "(c) 35-PERCENT REDUCTION IN CREDIT FOR TAXABLE YEARS AFTER
1986.— "(1) REDUCTION IN CURRENT YEAR INVESTMENT CREDIT.—Any
portion of the current year business credit under section 38(b) for any taxable year beginning after June 30, 1987, which is attributable to the regular investment credit shall be reduced by 35 percent. "(2) UNEXPIRED CARRYFORWARDS TO IST TAXABLE YEAR BEGINNING AFTER JUNE 30, 1987.—Any portion of the business credit
carryforward under section 38(a)(1) attributable to the regular investment credit which has not expired as of the close of the taxable year preceding the 1st taxable year of the taxpayer beginning after June 30, 1987, shall be reduced by 35 percent. "(3) SPECIAL RULE FOR TAXABLE YEARS BEGINNING BEFORE AND ENDING AFTER JULY 1, 1987.—In the case of any taxable year
beginning before and ending after July 1, 1987— "(A) any portion of the current year business credit under section 3803) for such taxable year, or "(B) any portion of the business credit carryforward under section 38(a)(1) to such year, which is attributable to the regular investment credit shall be reduced by the applicable percentage. "(4) TREATMENT OF DISALLOWED CREDIT.—
"(A) IN GENERAL.—The amount of the reduction of the regular investment credit under paragraphs (1) and (2) shall not be allowed as a credit for any taxable year. "(B) No CARRYBACK FOR YEAR STRADDLING JULY 1, 1987; GROSS UP OF CARRYFORWARDS.—The amount of the reduction of the regular investment credit under paragraph (3)— "(i) may not be carried back to any taxable year, but
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