PUBLIC LAW 101-239—DEC. 19, 1989 103 STAT. 2371 "(4) TREATMENT OF CERTAIN TRANSACTIONS. — This section shall not apply to any exchange which is part of a transaction (or series of transactions) structured to avoid the purposes of this subsection. " (g) SPECIAL RULE WHERE SUBSTANTIAL DIMINUTION OF RISK.— "(1) IN GENERAL. — If paragraph (2) applies to any property for any period, the running of the period set forth in subsection (fKlXC) with respect to such property shall be suspended during such period, " (2) PROPERTY TO WHICH SUBSECTION APPLIES. —T his paragraph shall apply to any property for any period during which the holder's risk of loss with respect to the property is substantially diminished by— "(A) the holding of a put with respect to such property, "(B) the holding by another person of a right to acquire such property, or "(C) a short S£de or any other transaction. " (h) SPECIAL RULE FOR FOREIGN REAL PROPERTY.—For purposes of this section, real property located in the United States and real property located outside the United States are not property of a like kind. " (b) EFFECTIVE DATE.— 26 USC 1031 (1) IN GENERAL.— Except as provided in paragraph (2), the "°*®- amendments made by this section shall apply to transfers after July 10, 1989, in taxable years ending after such date. (2) BINDING CONTRACT. —The amendments made by this sec- tion shall not apply to any transfer pursuant to a written binding contract in effect on July 10, 1989, and at all times thereafter before the transfer. PART II—MINIMUM TAX PROVISIONS SEC. 7611. SIMPLIFICATION OF ADJUSTED CURRENT EARNINGS PREF- ERENCE. (a) EUMINATION OF BoOK LIMITATIONS APPLICABLE TO DEPRECIA- TION.— (1) IN GENERAL.— (A) Clause (i) of section 56(g)(4)(A) (relating to deprecia- tion) is amended to read as follows: "(i) PROPERTY PLACED IN SERVICE AFTER 1989. — The depreciation deduction with respect to any property placed in service in a taxable year beginning after 1989 shall be determined under the alternative system of section 168(g)." (B) Subparagraph (A) of section 56(g)(4) is amended by striking clauses (v) and (vi) and by redesignating clause (vii) as clause (v). (2) TECHNICAL AMENDMENT.— Clause (iii) of section 56(g)(4)(A) is amended by inserting "and which is placed in service in a taxable year beginning before 1990" after "thereof) applies". flb) TREATMENT OF CERTAIN EARNINGS AND PROFITS ADJUST- MENTS.—Subparagraph (D) of section 56(g)(4) is amended to read as follows: "(D) CERTAIN OTHER EARNpfGS AND PROFITS ADJUST- MENTS. —
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