96 STAT. 448
PUBLIC LAW 97-248—SEPT. 3, 1982 which provides that any agreement with a terminal rental adjustment clause is not a lease, (B) with respect to which the lessor under the agreement— (i) is personally liable for the repayment of, or (ii) has pledged property (but only to the extent of the net fair market value of the lessor's interest in such property), other than property subject to the agreement or property directly or indirectly financed by indebtedness secured by property subject to the agreement, as security for, all amounts borrowed to finance the acquisition of property subject to the agreement, and (C) with respect to which the lessee under the agreement uses the property subject to the agreement in a trade or business or for the production of income. (2) TERMINAL RENTAL ADJUSTMENT CLAUSE.—The term "terminal rental adjustment clause" means a provision of an agreement which permits or requires the rental price to be adjusted upward or downward by reference to the amount realized by the lessor under the agreement upon sale or other disposition of such property. PART III—FOREIGN TAX SEC. 211. FOREIGN TAX CREDIT FOR TAXES ON OIL AND GAS INCOME. (a) AMENDMENT OF SECTION 907(CX4) TO RECAPTURE FOREIGN OIL AND GAS EXTRACTION LOSSES BY RECHARACTERIZING LATER EXTRAC-
26 USC 907.
TiON INCOME.—Paragraph (4) of section 907(c) (relating to certain losses) is amended to read as follows: "(4) RECAPTURE OF FOREIGN OIL AND GAS EXTRACTION LOSSES BY RECHARACTERIZING LATER EXTRACTION INCOME.—
"(A) IN GENERAL.—That portion of the income of the taxpayer for the taxable year which (but for this paragraph) would be treated as foreign oil and gas extraction income shall be treated as income (from sources without the United States) which is not foreign oil and gas extraction income to the extent of the excess of— "(i) the aggregate amount of foreign oil extraction losses for preceding taxable years beginning after December 31, 1982, over "(ii) so much of such aggregate amount as was recharacterized under this subparagraph for preceding taxable years beginning after December 31, 1982. "(B) FOREIGN OIL EXTRACTION LOSS DEFINED.—
"(i) IN GENERAL.—For purposes of this paragraph, the term 'foreign oil extraction loss' means the amount by which— "(I) the gross income for the taxable year from sources without the United States and its possessions (whether or not the taxpayer chooses the benefits of this subpart for such taxable year) taken into account in determining the foreign oil and gas extraction income for such year, is exceeded by
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