98 STAT. 806
PUBLIC LAW 98-369—JULY 18, 1984 wi hhi'^^ li
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stop-loss agreements, or other similar arrangements, and "(ID except to the extent provided in regulations, any amount borrowed from a person who has an interest (other than as a creditor) in the activity in which the property is used or from a related person to a person (other than the taxpayer) having such an interest. In the case of amounts borrowed by a corporation from a shareholder, subclause (II) shall not apply to an interest as a shareholder. "(iv) QuAUFiED PERSON.—For purposes of this paragraph, the term 'qualified person' means any person which is actively and regularly engaged in the business of lending money and which is not— "(I) a related person with respect to the taxpayer, "(II) a person from which the taxpayer acquired the property (or a related person to such person), or
"(III) a person who receives a fee with respect to the taxpayer's investment in the property (or a related person to such person). "(v) RELATED PERSON.—For purposes of clause (i), the term 'related person' has the meaning given such term by section 168(e)(4). Except as otherwise provided in >! regulations prescribed by the Secretary, the determination of whether a person is a related person shall be ?I8.c,!f«A * 'jv;' ^ made as of the close of the taxable year in which the property is placed in service. ^€:«> ft "(E) APPLICATION TO PARTNERSHIPS AND S CORPORATIONS.— For purposes of this paragraph and paragraph (9)— "(i) IN GENERAL.—Except as otherwise provided in this subparagraph, in the case of any partnership or S corporation, the determination of whether a partner's « or shareholder's allocable share of any financing is nonqualified nonrecourse financing shall be made at the partner or shareholder level.
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"(ii) SPECIAL RULE FOR CERTAIN RECOURSE FINANCING
Post, p. 811.
OF s CORPORATION.—A shareholder of an S corporation shall be treated as liable for his allocable share of any ji_. financing provided by a qualified person to such corporation if^ "(I) such financing is recourse financing (determined at the corporate level), and "(II) such financing is provided with respect to qualified business property of such corporation. "(iii) QuAUFiED BUSINESS PROPERTY.—For purposes of clause (ii), the term 'qualified business property means J,. ^ any property if— "(I) such property is used by the corporation in the active conduct of a trade or business, J.;,; "(II) during the entire 12-month period ending on ^ ^ the last day of the taxable year, such corporation -til. had at least 3 full-time employees who were not owner-employees (EIS defined in section 465(c)(7)(E)(i)) and substantially all the services of
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