PUBLIC LAW 97-34—AUG. 13, 1981
95 STAT. 229
(within the meaning of section 168), the applicable percentage for purposes of paragraph (1) shall be 100 percent." (3) Subparagraph (C) of section 48(1)(2) (defining energy prop- 26 USC 48. erty) is amended by inserting before the period at the end thereof "or which is recovery property (within the meaning of section 168)". (4) The second sentence of section 48(a)(l) (defining section 38 property) is amended by striking out "includes only property" and inserting in lieu thereof "includes only recovery property (within the meaning of section 168 without regard to any useful Ante, p. 203. life) and any other property", (f) APPLICATION OF AT RISK RULES TO INVESTMENT CREDIT.—
(1) IN GENERAL.—Subsection (c) of section 46 (relating to 26 USC 46. qualified investment) is amended by adding at the end thereof the following new paragraphs: "(8) LIMITATION TO AMOUNT AT RISK.—
"(A) IN GENERAL.—In the case of new or used section 38 property which— "(i) is placed in service during the taxable year by a taxpayer described in section 465(a)(1), and "(ii) is used in connection with an activity with respect to which any loss is subject to limitation under section 465, the basis of such property for purposes of paragraph (1) shall not exceed the amount the taxpayer is at risk with respect to such property as of the close of such taxable year. "(B) AMOUNT AT RISK.—
"(i) IN GENERAL.—Except as provided in clause (ii), the term 'at risk' has the same meaning given such term by section 465(b) (without regard to paragraph (5) thereof), "(ii) CERTAIN FINANCING.—In the case of a taxpayer who at all times is at risk (determined without regard to this clause) in an amount equal to at least 20 percent of the basis (determined under section 168(d)(l)(A)(i)) of property described in subparagraph (A) and who acquired such property from a person who is not a related person, such taxpayer shall for purposes of this paragraph be considered at risk with respect to any amount borrowed in connection with such property (other than convertible debt) to the extent that such amount— "(I) is borrowed from a qualified person, or "(II) represents a loan from any Federal, State, or local government or instrumentality thereof, or is guaranteed by, any Federal, State, or local government. "(C) SPECIAL RULE FOR PARTNERSHIPS AND SUBCHAPTER S
CORPORATIONS.—In the case of any partnership or electing small business corporation (within the meaning of section 1371(b)), any amount treated as at risk under subparagraph (B)(ii) shall be allocated among the partners or shareholders (and treated as an amount at risk with respect to such persons) in the same manner as the credit allowable by section 38. "(D) QuAUFiED PERSON.—-For purposes of this paragraph, the term 'qualified person' means any person— "(i) which—
�
