119 STAT. 2616
paragraphs (3) and (8) of section 6051(a) paid by such person with respect to employment of employees by such person during the calendar year ending during such taxable year. Such term shall not include any amount which is not properly included in a return filed with the Social Security Administration on or before the 60th day after the due date (including extensions) for such return.’’. (3) Subparagraph (B) of section 199(c)(1) is amended by inserting ‘‘and’’ at the end of clause (i), by striking clauses (ii) and (iii), and by inserting after clause (i) the following: ‘‘(ii) other expenses, losses, or deductions (other than the deduction allowed under this section), which are properly allocable to such receipts.’’. (4) Paragraph (2) of section 199(c) is amended to read as follows: ‘‘(2) ALLOCATION METHOD.—The Secretary shall prescribe rules for the proper allocation of items described in paragraph (1) for purposes of determining qualified production activities income. Such rules shall provide for the proper allocation of items whether or not such items are directly allocable to domestic production gross receipts.’’. (5) Subparagraph (A) of section 199(c)(4) is amended by striking clauses (ii) and (iii) and inserting the following new clauses: ‘‘(ii) in the case of a taxpayer engaged in the active conduct of a construction trade or business, construction of real property performed in the United States by the taxpayer in the ordinary course of such trade or business, or ‘‘(iii) in the case of a taxpayer engaged in the active conduct of an engineering or architectural services trade or business, engineering or architectural services performed in the United States by the taxpayer in the ordinary course of such trade or business with respect to the construction of real property in the United States.’’. (6) Subparagraph (B) of section 199(c)(4) is amended by striking ‘‘and’’ at the end of clause (i), by striking the period at the end of clause (ii) and inserting ‘‘, or’’, and by adding at the end the following: ‘‘(iii) the lease, rental, license, sale, exchange, or other disposition of land.’’. (7) Paragraph (4) of section 199(c) is amended by adding at the end the following new subparagraphs: ‘‘(C) SPECIAL RULE FOR CERTAIN GOVERNMENT CONTRACTS.—Gross receipts derived from the manufacture or production of any property described in subparagraph (A)(i)(I) shall be treated as meeting the requirements of subparagraph (A)(i) if— ‘‘(i) such property is manufactured or produced by the taxpayer pursuant to a contract with the Federal Government, and ‘‘(ii) the Federal Acquisition Regulation requires that title or risk of loss with respect to such property be transferred to the Federal Government before the manufacture or production of such property is complete.
26 USC 199.
Regulations.
VerDate 14-DEC-2004
07:21 Oct 30, 2006
PUBLIC LAW 109–135—DEC. 21, 2005
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