PUBLIC LAW 98-369—JULY 18, 1984 fi
98 STAT. 811
the amendments made by section 211(f) of the Economic Recovery Tax Act of 1981 do not apply. 26 USC 46, 47. (2) AMENDMENTS MAY BE ELECTED RETROACTIVELY.—At the
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election of the taxpayer, the amendments made by this section shall apply as if included in the amendments made by section 211(f) of the Economic Recovery Tax Act of 1981. Any election made under the preceding sentence shall apply to all property of the taxpayer to which the amendments made by such section 211(f) apply and shall be made at such time and in such manner as the Secretary of the Treasury or his delegate may by regulations prescribe.
SEC. 432. EXCLUSION OF ACTIVE BUSINESSES OF QUALIFIED CORPORATIONS FROM AT-RISK RULES, ETC. (a) EXCLUSION OF ACTIVE BUSINESSES OF QUALIFIED CORPORATIONS FROM AT-RISK RULES.—Subsection (c) of section 465 (relating
to deductions limited to amount at risk) is amended by adding at the end thereof the following new paragraph: "(7) EXCLUSION OF ACTIVE BUSINESSES OF QUALIFIED CORPORATIONS.—
"(A) IN GENERAL.—In the case of a taxpayer which is a qualified C corporation— ^^ *"^ "(i) each qualifying business carried on by such tax^ •. payer shall be treated as a separate activity, and '|f "(ii) subsection (a) shall not apply to losses from such business. "(B) QUALIFIED CORPORATION.—For purposes of subpara'^. graph (A), the term 'qualified C corporation' means any ^'; corporation described in subparagraph (B) of subsection (a)(1) which is not— ^"(i) a personal holding company (as defined in section
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542(a)), "(ii) a foreign personal holding company (as defined in section 552(a)), or "(iii) a personal service corporation (as defined in section 269A(b) but determined by substituting '5 percent' for '10 percent' in section 269A(b)(2)). "(C) QuAUFYiNG BUSINESS.—For purposes of this paragraph, the term 'qualifying business' means any active business if— "(i) during the entire 12-month period ending on the 2f last day of the taxable year, such corporation had at Kir least 1 full-time employee substantially all the services Qof whom were in the active management of such business, "(ii) during the entire 12-month period ending on the ga,, last day of the taxable year, such corporation had at least 3 full-time, nonowner employees substantially all ^ of the services of whom were services directly related to such business, "(iii) the amount of the deductions attributable to such business which are allowable to the taxpayer solely by reason of sections 162 and 404 for the taxable year exceeds 15 percent of the gross income from such business for such year, and - <i "(iv) such business is not an excluded business.
26 USC 465.
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