Stephen S. Ziegler - Page 14

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          passive activity for purposes of section 469.  TRA 1986 sec.                
          502(a), 100 Stat. 2241.                                                     
               In support of his argument that the transitional rule                  
          violates his equal protection rights under the Due Process                  
          Clause, petitioner contends that, because he is not entitled to             
          the relief provided by the transitional rule, Congress treated              
          him differently than certain other taxpayers entitled to such               
          relief.  According to petitioner, the provisions of the transi-             
          tional rule are “arbitrary, capricious and unreasonable”.  In               
          support of that claim, petitioner asserts:                                  
                    In this case, the conditions for the 1986 Act                     
               exemptions for low and moderate income housing are                     
               worse than unreasonable, that is, worse than conditions                
               without any reasonable basis.  The conditions evidence,                
               and indeed were meant to evidence, an intention by the                 
               opponents of any exemption to take private property                    
               without compensation.                                                  
                    The exemption is conditional upon the taxpayer not                
               having yet paid in over 50% of the taxpayer’s invest-                  
               ment commitment.  It is obvious - and beyond dispute -                 
               that the purpose of this condition was to encourage the                
               taxpayer to pay in the balance of his investment - and                 
               this was the very purpose of the tax incentives for                    
               subsidized housing in the first place.  However, there                 
               is no exemption for the investor who has already paid                  

                         (2) the 1st taxable year after the taxable                   
                    year in which the investor is obligated to make                   
                    his last investment, or                                           
                         (3) the taxable year preceding the 1st tax-                  
                    able year for which such project ceased to be a                   
                    qualified low-income housing project.                             
          TRA 1986 sec. 502(b), 100 Stat. 2241.                                       

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