100 STAT. 2526
PUBLIC LAW 99-514—OCT. 22, 1986
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In the case of the following taxable years beginning after 12/31/89: 1st 2nd 3rd 4th 5th or succeeding
The phase out percentage is: 80 60 40 20 0
(C) PRE-1990 QUALIFIED LOAN.—For purposes of subpara-
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graph (A), the term "pre-1990 qualified loan" means, with respect to any taxable year beginning before January 1, 1990, any qualified loan outstanding at any time during such taxable year to the extent that the total amount of foreign taxes which would be creditable (without regard to the limitation of section 904 of the Internal Revenue Code of 1986) with respect to all qualified loans outstanding at any time during such taxable year does not exceed the applicable credit limit for such taxable year. (D) POST-1989 QUALIFIED LOANS.—For purposes of Subparagraph (A), the term "post-1989 qualified loan" means any qualified loan outstanding as of the close of the 1st taxable year of the taxpayer beginning after December 31, 1988, to the extent that the total amount of foreign taxes which would be creditable (without regard to the limitation of section 904 of the Internal Revenue Code of 1986) with respect to all qualified loans outstanding as of the close of such taxable year does not exceed the applicable credit limit for post-1989 qualified loans. (E) CLASSIFICATION OF QUALIFIED LOANS.—For purposes of this paragraph, if the foreign taxes creditable for any taxable year beginning before January 1, 1990, with respect to any qualified loan, when added to the aggregate amount of foreign taxes creditable for such taxable year with respect to qualified loans entered into by the taxpayer before the date on which such qualified loan was entered into, exceed the applicable credit limit, then that portion of a qualified loan which causes the taxpayer to exceed the applicable credit limit shall not be treated as a pre-1990 or post-1989 qualified loan, as the case may be. (F) APPLICABLE CREDIT LIMIT.—
(i) IN GENERAL.—The applicable credit limit shall be equal to— (I) except as provided in subclause (II), 110 percent of the base credit amount multiplied by the applicable interest rate adjustment for the taxable ' '„ , year, and (II) in the case of post-1989 qualified loans, the ,,.,, amount determined under subclause (I) (without t, i ^, regard to the interest rate adjustment) multiplied
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by the interest rate adjustment for post-1989 qualified loans. ,. (ii) BASE CREDIT AMOUNT.—The base credit amount of
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a taxpayer shall be an amount equal to the principal i'i'-i amount of qualified loans held by such taxpayer on November 16, 1985, multiplied by the product of—
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(I) the interest rate applicable to such loan on November 16, 1985, and
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