Payless Cashways, Inc. and Its Subsidiaries - Page 8

                                        - 8 -                                         
          in service after December 31, 1985.  The repeal was subject to a            
          limited number of transitional ITC rules.  TRA section 204(a),              
          100 Stat. 2146, contains a number of specific transition rules.             
          There are also three general transition rules contained in TRA              
          section 203(b), 100 Stat. 2143.5  TRA section 211 generally                 
          repealed the regular investment tax credit by adding section 49             
          to the Code.  See TRA sec. 211(a).  Section 49(e) provides an               
          exception for “transition property”, which is defined as property           
          placed in service after December 31, 1985, to which the                     
          amendments made by TRA section 201, 100 Stat. 2121, do not apply.           
          Sec. 49(e)(1).                                                              
          World Headquarters Rule                                                     
               One of the transitional rules in TRA section 204(a) deals              
          with property used in a leased building that serves as “world               
          headquarters” of the lessee and its affiliates.  TRA section                
          204(a)(7) provides:                                                         
                    (7)  Certain Leasehold Improvements.--The                         
               amendments made by section 201 shall not apply to any                  
               reasonable leasehold improvements, equipment and                       
               furnishings placed in service by a lessee or its                       
               affiliates if--                                                        
                         (A) the lessee or an affiliate is the                        
                    original lessee of each building in which                         
                    such property is to be used,                                      

               5The rules found in TRA sec. 203(b) are known as the binding           
          contract rule, the self-constructed property rule, and the                  
          equipped building rule.  See TRA sec. 203(b)(A), (B), and (C).              
          Only the equipped building rule, TRA sec. 203(b)(C), is relevant            
          to this case.                                                               

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  Next

Last modified: May 25, 2011