Republic Plaza Properties Partnership, PFI Republic Limited, Inc., Tax Matters Partner - Page 23

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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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