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TITLE 26-INTERNAL REVENUE CODE section (b) shall not apply and the term "rea- sonable allowance" as used in subsection (a) shall include an allowance computed in accor- dance with regulations prescribed by the Sec- retary, under any of the following methods: (A) the straight line method, (B) the declining balance method, using a rate not exceeding 150 percent of the rate which would have been used had the annual allowance been computed under the method described in subparagraph (A), or (C) any other consistent method produc- tive of an annual allowance which, when added to all allowances for the period com- mencing with the taxpayer's use of the property and including the taxable year, does not, during the first two-thirds of the useful life of the property, exceed the total of such allowances which would have been used had such allowances been computed under the method described in subpara- graph (B). Nothing in this paragraph shall be construed to limit or reduce an allowance otherwise al- lowable under subsection (a) except where al- lowable solely by reason of paragraph (2), (3), or (4) of subsection (b). (2) Residential rental property (A) In general Paragraph (1) of this subsection shall not apply, and subsection (b) shall apply in any taxable year, to a building or structure- (I) which is residential rental property located within the United States or any of its possessions, or located within a foreign country if a method of depreciation for such property comparable to the method provided in subsection (b)(2) or (3) is pro- vided by the laws of such country, and (ii) the original use of which commences with the taxpayer. In the case of residential rental property lo- cated within a foreign country, the original use of which commences with the taxpayer, if the allowance for depreciation provided under the laws of such country for such property is greater than that provided under paragraph (1) of this subsection, but less than that provided under subsection (b), the allowance for depreciation under subsection (b) shall be limited to the amount provided under the laws of such country. (B) Definition For purposes of subparagraph (A), a building or structure shall be considered to be residential rental property for any tax- able year only if 80 percent or more of the gross rental income from such building or structure for such year is rental income from dwelling units (within the meaning of subsection (k)(3)(C)). For purposes of the preceding sentence, if any portion of such building or structure is occupied by the tax- payer, the gross rental income from such building or structure shall include the rental value of the portion so occupied. (C) Change in method of depreciation Any change in the computation of the allowance for depreciation for any taxable year, permitted or required by reason of the application of subparagraph (A), shall not be considered a change in a method of ac- counting. (3) Property constructed, etc., before July 25, 1969 Paragraph (1) of this subsection shall not apply, and subsection (b) shall apply, in the case of property- (A) the construction, reconstruction, or erection of which was begun before July 25, 1969, or (B) for which a written contract entered into before July 25, 1969, with respect to any part of the construction, reconstruc- tion, or erection or for the permanent fi- nancing thereof, was on July 25, 1969, and at all times thereafter, binding on the tax- payer. (4) Used section 1250 property Except as provided in paragraph (5), in the case of section 1250 property acquired after July 24, 1969, the original use of which does not commence with the taxpayer, the allowance for depreciation under this section shall be limited to an amount computed under- (A) the straight line method, or (B) any other method determined by the Secretary to result in a reasonable allowance under subsection (a), not includ- ing- (i) any declining balance method, (ii) the sum of the years-digits method, or (iii) any other method allowable solely by reason of the application of subsection (b)(4) or paragraph (1)(C) of this subsec- tion. (5) Used residential rental property In the case of section 1250 property which is residential rental property (as defined in paragraph (2)(B)) acquired after July 24, 1969, having a useful life of 20 years or more, the original use of which does not commence with the taxpayer, the allowance for depreci- ation under this section shall be limited to an amount computed under- (A) the straight line method, (B) the declining balance method, using a rate not exceeding 125 percent of the rate which would have been used had the annual allowance been computed under the method described in subparagraph (A), or (C) any other method determined by the Secretary to result in a reasonable allowance under subsection (a), not includ- ing- (i) the sum of the years-digits method, (ii) any declining balance method using a rate in excess of the rate permitted under subparagraph (B), or (iii) any other method allowable solely by reason of the application of subsection (b)(4) or paragraph (1)(C) of this subsec- tion. (6) Special rules (A) Under regulations prescribed by the Secretary, rules similar to the rules pro- vided in paragraphs (5), (9), (10), and (13) of Page 154