PUBLIC LAW 100-647—NOV. 10, 1988
102 STAT. 3353
(3) Paragraph (4) of section 312(k) of the 1986 Code is amended by striking out "paragraphs (1) and (3)" and inserting in lieu thereof "paragraph (1) \ (4) Paragraph (4) of section 46(e) of the 1986 Code is amended— (A) by striking out "168(j)(6)" in subparagraph (B) and inserting in lieu thereof "168(i)(3)", (B) by striking out "paragraphs (8) and (9) of section 168(j)" in subparagraph (D) and inserting in lieu thereof "paragraphs (5) and (6) of section 168(h)", (C) by striking out "1680*)" in subparagraph (E) and inserting in lieu thereof "168(h)", and (D) by striking out "168(j)(4)" in subparagraph (E) and inserting in lieu thereof "168(h)(2)". (5) Clause (i) of section 168(d)(3)(A) of the 1986 Code is amended by striking out "and which are". (6)(A) Subparagraph (B) of section 168(0(5) of the 1986 Code is amended— (i) by striking out "1st full taxable year" in clause (ii) and inserting in lieu thereof "1st taxable year", and (ii) by striking out "or" at the end of clause (i), by striking out the period at the end of clause (ii) and inserting in lieu thereof ", or", and by adding at the end thereof the following new clause: "(iii) any property to which this section (as amended by the Tax Reform Act of 1986) applied in the hands of the transferor." (B) Paragraph (5) of section 168(f) of the 1986 Code is amended by adding at the end thereof the following new subparagraph: "(C) SPECIAL RULE.—In the case of any property to which this section would apply but for this paragraph, the depreciation deduction under section 167 shall be determined under the provisions of this section as in effect before the amendments made by section 201 of the Tax Reform Act of 1986." (7)(A) Subparagraph (A) of section 168(i)(7) of the 1986 Code is amended by adding at the end thereof the following new sentence: "In any case where this section as in effect before the amendments made by section 201 of the Tax Reform Act of 1986 applied to the property in the hands of the transferor, the reference in the preceding sentence to this section shall be treated as a reference to this section as so in effect." (B) Subparagraph (B) of section 168(i)(7) of the 1986 Code is amended to read as follows: "(B) TRANSACTIONS COVERED.—The transactions described
in this subparagraph are— "(i) any transaction described in section 332, 351, 361, 371(a), 374(a), 721, or 731, and "(ii) any transaction between members of the same afBliated group during any taxable year for which a consolidated return is made by such group. Subparagraph (A) shall not apply in the Case of a termination of a partnership under section 708(b)(l)(B)." (C) Subparagraph (D) of section 168(i)(7) of the 1986 Code is (8) Subparagraph (B) of section 168(h)(2) of the 1986 Code is amended to read as follows:
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