William L. Richter - Page 12

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          48(a)(1) and (a)(2)(A).  The energy property must be depreciable,           
          which requires that the property be used in a trade or business             
          or held for the production of income.  Secs. 48(a)(3)(A)(i), (C),           
               A trust is eligible for the energy credit if it places                 
          qualifying energy property in service during the taxable year.              
          The trust must apportion its basis in the qualifying energy                 
          property among itself and its beneficiaries.  Secs. 38(a),                  
          (c)(3)(D), 46(2), 48(a)(1).  Although there is no current                   
          provision in the Code that governs the apportionment of an                  
          investment in energy property among a trust and its                         
          beneficiaries, section 50(d)5 refers taxpayers to specific                  
          provisions in effect prior to the enactment of OBRA.  One of                
          those provisions, section 48(f)6 (as in effect on the day before            

               5Sec. 50(d) provides:  “For purposes of * * * [secs. 46, 48,           
          and 50], rules similar to the rules of the following provisions             
          (as in effect on the day before the date of the enactment of the            
          Revenue Reconciliation Act of 1990) shall apply: * * * (6)                  
          Section 48(f) (relating to certain estates and trusts).”                    
          (Emphasis added.)                                                           
               6Sec. 48(f) (as in effect on the day before the enactment of           
          OBRA) provides:                                                             
                    SEC. 48(f). Estates and Trusts.--In the case of an                
               estate or trust--                                                      
                         (1) the qualified investment for any taxable                 
                    year shall be apportioned between the * * * trust                 
                    and the beneficiaries on the basis of the income                  
                    of the * * * trust allocable to each, and                         

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