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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
8(...continued)
(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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