26 CFR Part 9 — Temporary Income Tax Regulations Under the Tax Reduction Act of 1975

PART 9—TEMPORARY INCOME TAX REGULATIONS UNDER THE TAX REDUCTION ACT OF 1975 § 9.1 Investment credit—public utility property elections. (a) Applicability of prior election under section 46(f) In general. (2) 1972 immediate flow-through election. (i) The increase in the amount of credit from 7 percent to 10 or 11 percent under section 46(a)(1) (A), (B), and (D), (ii) The increase in the amount of qualified investment from 4/7 to 7/7 under section 46(a)(1)(C) and (c)(3)(A), (iii) The increase in the dollar limitation from $50,000 to $100,000 on used property under section 48(c)(2), and (iv) The increase in the limitation based on tax under section 46(a)(6) for certain public utilities. In determining the amount of credit attributable to limited property possible disallowance under section 46(f) shall be disregarded. (3) Additional credit allowed Credit earned in taxable year. (A) The credit allowed by section 38 for the taxable year (determined without regard to section 46(b)) multiplied by a fraction, the numerator of which is the amount of credit earned for limited property for the taxable year and the denominator of which is the amount of credit earned for all section 38 property for the taxable year, over (B) The amount of normal credit allowed for limited property for the taxable year (determined without regard to section 46(b)). The amount of normal credit allowed for limited property is the amount of credit that would be allowed for the taxable year determined as if the Tax Reduction Act had not been enacted multiplied by a fraction, the numerator of which is the amount of credit earned for limited property for the taxable year determined as if the Tax Reduction Act had not been enacted and the denominator of which is the credit earned for all section 38 property for the taxable year determined as if the Tax Reduction Act had not been enacted. (ii) Carryover or carryback to taxable year. (A) The amount of credit allowed by section 38 for the taxable year by reason of section 46(b) multiplied by the fraction contained in paragraph (a)(3)(i)(A) of this section for the unused credit year, over (B) The amount of unused normal credit allowed for limited property for the taxable year. The amount of unused normal credit allowed for limited property is the amount of unused credit that would be allowed for the taxable year under section 38 by reason of section 46(b), taking into account the amount of unused credit that would be allowed for any preceding year, determined as if the Tax Reduction Act had not been enacted, multiplied by the fraction contained in paragraph (a)(3)(i)(B) of this section for the unused credit year. (b) New election In general. (2) Special section 46(f)(2) election. (i) Made a 1972 election under section 46(f)(3), (ii) Did not make an election to apply section 46(f)(2) with respect to property to which section 46(f)(3) does not apply, and (iii) Did not acquire property to which section 46(f)(1) applied in any taxable year ending before January 1, 1975, may elect to apply section 46(f)(2) to the additional credit allowed by the Tax Reduction Act of 1975 with respect to limited property notwithstanding any prohibition in section 46(f)(3) to the contrary. (c) Method of making election. (Secs. 46(f) and 7805 of the Internal Revenue Code of 1954 (85 Stat. 503, 68A Stat. 917; 26 U.S.C. 46, 7805)) [T.D. 7360, 40 FR 25472, June 16, 1975] § 9.2 [Reserved] § 9.3 Temporary TRASOP requirements for 1-percent additional investment credit. The provisions listed in § 1.46-8 (a)(4) (i)-(ix) (Income Tax Regulations) are deemed effective only as temporary regulations under this section. (Sec. 301(d)(2)(C) and (10) of the Tax Reduction Act of 1975 and sec. 7805 of the Internal Revenue Code of 1954 (89 Stat. 38, 68A Stat. 917 (26 U.S.C. 7805))) [T.D. 7589, 44 FR 4145, Jan. 16, 1979; 44 FR 6715, Feb. 2, 1979]

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