Pub. L. 100–203section 453 of this titleRepeal applicable to dispositions in taxable years beginning after , with special rules for dealers and non-dealers, and coordination with Tax Reform Act of 1986, see section 10202(e)(1)–(3), (5) of , set out as a note under .
Pub. L. 100–203“For purposes of applying the amendments made by this subsection [amending this section and provisions set out below] and the amendments made by section 10202 of the Revenue Act of 1987 [, amending sections 56, 381, 453, 453A, and 691 of this title and repealing this section], the provisions of this subsection shall be treated as having been enacted immediately before the enactment of the Revenue Act of 1987 [].”
, , , provided that:
Effective Date; Allocation of Indebtedness as Payment on Installment Obligation
Except as otherwise provided in this section, the amendments made by this section [enacting this section] shall apply to taxable years ending after , with respect to dispositions after .
In applying the amendments made by this section to any installment obligation of a corporation incorporated on , the following indebtedness shall not be taken into account in determining the allocable installment indebtedness of such corporation under section 453C of the Internal Revenue Code of 1986 (as added by this section):
“(A)
12⅝ percent subordinated debentures with a total face amount of $175,000,000 issued pursuant to a trust indenture dated as of .
“(B)
A revolving credit term loan in the maximum amount of $130,000,000 made pursuant to a revolving credit and security agreement dated as of , payable in various stages with final payment due on .
This paragraph shall also apply to indebtedness which replaces indebtedness described in this paragraph if such indebtedness does not exceed the amount and maturity of the indebtedness it replaces.
“(4)
Special rule for residential condominium project .—
For purposes of applying the amendments made by this section, the term applicable installment obligation (within the meaning of section 453C(e)(1) of the Internal Revenue Code of 1986) shall not include any obligation arising in connection with sales from a residential condominium project—
“(A)
for which a contract to purchase land for the project was entered into at least 5 years before the date of the enactment of this Act,
“(B)
with respect to which land for the project was purchased before ,
“(C)
with respect to which building permits for the project were obtained, and construction commenced, before ,
“(D)
in conjunction with which not less than 80 units of low-income housing are deeded to a tax-exempt organization designated by a local government, and
“(E)
with respect to which at least $1,000,000 of expenses were incurred before .
“(5)
Special rule for qualified buyout .—
The amendments made by this section shall apply for taxable years ending after , to a corporation if—
“(A)
such corporation was incorporated on , for the purpose of acquiring all of the stock of another corporation,
“(B)
such acquisition took place on ,
“(C)
in connection with such acquisition, the corporation incurred indebtedness of approximately $151,000,000, and
“(D)
substantially all of the stock of the corporation is owned directly or indirectly by employees of the corporation the stock of which was acquired on .
“(6)
Special rule for sales of real property by dealers .—
In the case of installment obligations arising from the sale of real property in the ordinary course of the trade or business of the taxpayer, any gain attributable to allocable installment indebtedness allocated to any such installment obligations which arise (or are deemed to arise)—
“(A)
in the 1st taxable year of the taxpayer ending after , shall be taken into account ratably over the 3 taxable years beginning with such 1st taxable year, and
“(B)
in the 2nd taxable year of the taxpayer ending after , shall be taken into account ratably over the 2 taxable years beginning with such 2nd taxable year.
“(7)
Special rule for sales of personal property by dealers .—
In the case of installment obligations arising from the sale of personal property in the ordinary course of the trade or business of the taxpayer, solely for purposes of determining the time for payment of tax and interest payable with respect to such tax—
“(A)
any increase in tax imposed by chapter 1 of the Internal Revenue Code of 1986 for the 1st taxable year of the taxpayer ending after , by reason of the amendments made by this section shall be treated as imposed ratably over the 3 taxable years beginning with such 1st taxable year, and
“(B)
any increase in tax imposed by such chapter 1 for the 2nd taxable year of the taxpayer ending after (determined without regard to subparagraph (A)), by reason of the amendments made by this section shall be treated as imposed ratably over the 2 taxable years beginning with such 2nd taxable year.
“(8)
Treatment of certain installment obligations .—
section 311 of Pub. L. 99–514Notwithstanding the amendments made by subtitle B of title III [, amending sections 593, 631, 852, 1201, and 1445 of this title and enacting provisions set out as notes under sections 631 and 1201 of this title], gain with respect to installment payments received pursuant to notes issued in accordance with a note agreement dated as of , where—
“(A)
such note agreement was executed pursuant to an agreement of purchase and sale dated ,
“(B)
more than ½ of the installment payments of the aggregate principal of such notes have been received by , and
“(C)
the last installment payment of the principal of such notes is due ,
shall be taxed at a rate of 28 percent.
“(9)
Special rules .—
For purposes of section 453C of the 1986 Code (as added by subsection (a))—
“(A)
Revolving credit plans, etc .—
The term ‘applicable installment obligation’ shall not include any obligation arising out of any disposition or sale described in paragraph (1) or (2) of section 453(k) of such Code (as added by section 812(a)).
“(B)
Certain dispositions deemed made on first day of taxable year .—
In the case of a taxpayer’s 1st taxable year ending after , dispositions after , and before the 1st day of such taxable year shall be treated as made on such 1st day.”
, , , as amended by –(8), , ; , , , provided that:
In generalsection 811(c) of Pub. L. 99–514[“(1) .—The amendment made by this section [amending , set out above] shall apply to taxable years beginning more than 1 year after the date of the enactment of this Act [].
Coordination with section 481[“(2) .—In the case of any taxpayer required by this section to change its method of accounting for any taxable year—
[“(A) such changes shall be treated as initiated by the taxpayer,
[“(B) such changes shall be treated as made with the consent of the Secretary of the Treasury, and
[“(C) the net amount of the adjustments required to be taken into account under section 481(a) of the Internal Revenue Code of 1986 shall be taken into account ratably over the 4 taxable year period beginning with the first taxable year beginning more than 1 year after the date of the enactment of this Act.”]