Page:United States Statutes at Large Volume 104 Part 2.djvu/948

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104 STAT. 1388-540 PUBLIC LAW 101-508 —NOV. 5, 1990 "(A) if such building is self-rehabilitated property, any quali^ed rehabilitation expenditure with respect to such building shall be taken into account for the taxable year for which such expenditure is properly chargeable to capital account with respect to such building, and "(B) if such building is not self-rehabilitated property, any qualified rehabilitation expenditure with respect to such building shall be taken into account for the taxable year in which paid. "(2) PROPERTY TO WHICH SUBSECTION APPLIES.— "(A) IN GENERAL.—T his subsection shall apply to any building which is being rehabilitated by or for the taxpayer if— "(i) the normal rehabilitation period for such building is 2 years or more, and '(ii) it is reasonable to expect that such building will be a qualified rehabilitated building in the hands of the taxpayer when it is placed in service. Clauses (i) and (ii) shall be applied on the basis of facts known as of the close of the taxable year of the taxpayer in which the rehabilitation begins (or, if later, at the close of the first taxable year to which an election under this subsection applies). " (B) NORMAL REHABILITATION PERIOD. —For purposes of subparagraph (A), the term 'normal rehabilitation period' means the period reasonably expected to be required for the rehabilitation of the building— "(i) beginning with the date on which physical work on the rehabilitation begins (or, if later, the first day of the first taxable year to which an election under this subsection applies), and "(ii) ending on the date on which it is expected that the property will be available for placing in service. "(3) SPECIAL RULES FOR APPLYING PARAGRAPH (i).—For purposes of paragraph (1)— "(A) COMPONENT PARTS, ETC.—Property which is to be a component part of, or is otherwise to be included in, any building to which this subsection applies shall be taken into account— '• "(i) at a time not earlier than the time at which it becomes irrevocably devoted to use in the building, and "(ii) as if (at the time referred to in clause (i)) the taxpayer had expended an amount equal to that portion of the cost to the taxpayer of such component or other property which, for purposes of this subpart, is properly chargeable (during such taxable year) to capital account with respect to such building. "(B) CERTAIN BORROWING DISREGARDED. — Any amount borrowed directly or indirectly by the taxpayer from the person rehabilitating the property for him shall not be treated as an amount expended for such rehabilitation. "(C) LIMITATION FOR BUILDINGS WHICH ARE NOT SELF- REHABILITATED.— "(i) IN GENERAL. — In the case of a building which is not self-rehabilitated, the amount taken into account under paragraph (I)(B) for any taxable year shall not exceed the amount which represents the portion of the