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legislative history of the Deficit Reduction Act of 1984, Pub. L.
98-369, sec. 92(a), 98 Stat. 494, 610, which enacted section 467
into the Code, provides guidance as to the meaning of that term.
The conference committee report (committee report) indicates in
pertinent part:
In addition, the conferees intend that the regula-
tions will provide a safe harbor for leases under which
no rent is payable (or is payable at a reduced rate)
for a reasonable period of time after the inception of
the lease. Whether the length of a "rent holiday" is
reasonable will be determined by commercial practice in
the locality where the use of the property will occur
at the time the lease is entered into. The conferees
expect that, in general, this rent holiday will not
exceed twelve months, and in no event shall exceed
twenty-four months. [H. Conf. Rept. 98-861, at 893
(1984), 1984-3 C.B. (Vol. 2) at 147.]
Respondent contends that, because the lease agreement does
not label or refer to the 11.5-month period of zero rent as a
"rent holiday", it can never qualify as a reasonable rent holiday
described in section 467(b)(5)(C). Respondent's contention is
baseless. As made clear in the committee report, the term "rent
holiday" in section 467(b)(5)(C) simply means a period after the
beginning of a lease during which either no rent is payable or
rent is payable at a reduced rate. Id. See also Staff of the
Joint Comm. on Taxation, General Explanation of the Revenue
Provisions of the Deficit Reduction Act of 1984, at 290 (J. Comm.
15(...continued)
construed as conveying, the Court's views with respect to any
portion of those proposed regulations.
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