102 STAT. 3382 PUBLIC LAW 100-647—NOV. 10, 1988

"(6) SPECIAL RULE WHERE DE MINIMIS EQUITY CONTRIBUTION.—
Property shall not be treated as failing to be residential rental
property for purposes of this section merely because the occu-
pant of a residential unit in the project pays (on a voluntary
basis) to the lessor a de minimis amount to be held toward the
purchase by such occupant of a residential unit in such project
if—

"(A) all amounts so paid are refunded to the occupant on

the cessation of his occupancy of a unit in the project, and

"(B) the purchase of the unit is not permitted until after

the close of the compliance period with respect to the

building in which the unit is located.

Any amount paid to the lessor as described in the preceding

sentence shall be included in gross rent under paragraph (2) for

purposes of determining whether the unit is rent-restricted."

(m) AMENDMENTS RELATED TO SECTION 261 OF THE REFORM ACT.—

(1) Subparagraph (A) of section 7518(g)(6) of the 1986 Code, is
amended by striking out "section l(i) and inserting in lieu
thereof "section 10')".

(2) Subparagraph (A) of section 607(h)(6) of the Merchant
46 USC app. Marine Act, 1936 is amended by striking out "section l(i)" and
1177- inserting in lieu thereof "section 10')".

SEC. 1003. AMENDMENTS RELATED TO TITLE III OF THE REFORM ACT.

(a) AMENDMENTS RELATED TO SECTION 301 OF THE REFORM ACT.—

(1) Subparagraph (B) of section 172(d)(4) of the 1986 Code is
amended by striking out ", (2)(B),".

(2) Paragraph (1) of section 3402(m) of the 1986 Code is
amended by striking out "section 62) (other than paragraph (13)
thereof)" and inserting in lieu thereof "section 62(a) (other than
paragraph (10) thereof))".

(3) Paragraph (2) of section 1212(b) of the 1986 Code is
amended to read as follows:

"(2) TREATMENT OF AMOUNTS ALLOWED UNDER SECTION 1211 (b)

(1) OR (2).—

"(A) IN GENERAL.—For purposes of determining the
excess referred to in Subparagraph (A) or (B) of paragraph
(1), there shall be treated as a short-term capital gain in the
taxable year an amount equal to the lesser of—

"(i) the amount allowed for the taxable year under
paragraph (1) or (2) of section 1211(b), or

"(ii) the adjusted taxable income for such taxable
year.

"(B) ADJUSTED TAXABLE INCOME.—For purposes of
Subparagraph (A), the term 'adjusted taxable income'
means taxable income increased by the sum of—

"(i) the amount allowed for the taxable year under
paragraph (1) or (2) of section 121 l(b), and

"(ii) the deduction allowed for such year under
section 151 or any deduction in lieu thereof.
For purposes of the preceding sentence, any excess of the
deductions allowed for the taxable year over the gross
income for such year shall be taken into account as nega-
tive taxable income."

(b) AMENDMENTS RELATED TO SECTION 302 OF THE REFORM ACT.—
26 USC i note. (1) Section 302 of the Reform Act is amended by striking out

subsection (c).