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TITLE 26-INTERNAL REVENUE CODE 178, title VI, § 601(a), 85 Stat. 553; renumbered § 43, Mar. 29, 1975, Pub. L. 94-12, title II, § 203(a), 89 Stat. 29; renumbered § 44, Mar. 29, 1975, Pub. L. 94-12, title II, § 204(a), 89 Stat. 30; renumbered § 45, Mar. 29, 1975, Pub. L. 94-12, title II, § 208(a), 89 Stat. 32.) SUBPART B-RULES FOR COMPUTING CREDIT FOR INVESTMENT IN CERTAIN DEPRECIABLE PROPERTY Sec. 46. Amount of credit. 47. Certain dispositions, etc., of section 38 property. 48. Definitions: special rules. 49. Termination for period beginning April 19, 1969, and ending during 1971. 50. Restoration of credit. SUBPART REFERRED TO IN OTHER SECTIONS This subpart is referred to in section 38 of this title. AMENDMENTS 1971-Pub. L. 92-178, title I, § 101(b)(5), Dec. 10, 1971, 85 Stat. 499, substituted "Termination for period beginning April 19, 1969, and ending during 1971" for "Termination of credit" in item 49 and added item 50. 1969-Pub. L. 91-172, title VII, § 703(d), Dec. 30, 1969, 83 Stat. 667, added item 49. 1962-Pub. L. 87-834, § 2(b), Oct. 16, 1962, 76 Stat. 963, added subpart B. § 46. Amount of credit (a) General rule (1) First-in-first.out rule The amount of the credit allowed by section 38 for the taxable year shall be an amount equal to the sum of- (A) the investment credit carryovers car- ried to such taxable year, (B) the amount of the credit determined under paragraph (2) for such taxable year, plus (C) the investment credit carrybacks car- ried to such taxable year. (2) Amount of credit for current taxable year (A) 10 percent credit Except as otherwise provided in subpara- graph (B), in the case of a property de- scribed in subparagraph (D), the amount of the credit determined under this paragraph for 'he taxable year shall be an amount equal to 10 percent of the qualified invest- ment (as determined under subsections (c) and (d)). (B) Additional credit In the case of a corporation which elects (at such time, in such form, and in such manner as the Secretary prescribes) to have the provisions of this subparagraph apply, the amount of the credit determined under this paragraph shall be an amount equal to- (i) 11 percent of the qualified invest- ment (as determined under subsections (c) and (d)), plus (ii) an additional percent (not in excess of one-half percent) of the qualified in- vestment (as determined.under such sub- sections) equal in amount to the amount determined under section 301(e) of the Tax Reduction Act of 1975. An election may not be made to have the provisions of this subparagraph apply unless the corporation meets the require- ments of section 301(d) of the Tax Reduc- tion Act of 1975. (C) 7 percent credit In case of property not described in sub. paragraph (D), the amount of credit deter- mined under this paragraph for the taxable year shall be an amount equal to 7 percent of the qualified investment (as determined under subsections (c) and (d)). (D) Transitional rules The provisions of subparagraphs (A) and (B) shall apply only to- (i) property to which subsection (d) does not apply, the construction, reconstruc- tion, or erection of which is completed by the taxpayer after January 21, 1975, but only to the extent of the basis thereof at- tributable to the construction, reconstruc- tion, or erection after January 21, 1975, and before January 1, 1981, (ii) property to which subsection (d) does not apply, acquired by the taxpayer after January 21, 1975, and before Janu- ary 1, 1981, and placed in service by the taxpayer before January 1, 1981, and (iii) property to which subsection (d) ap- plies, but only to the extent of the quali- fied investment (as determined under sub- sections (c) and (d)) with respect to quali- fied progress expenditures made after January 21, 1975, and before January 1, 1981. For purposes of applying clause (ii) of sub- paragraph (B), the date "December 31, 1976," shall be substituted for the date "January 21, 1975," each place it appears in this subparagraph. (3) Limitation based on amount of tax Notwithstanding paragraph (1), the credit allowed by section 38 for the taxable year shall not exceed- (A) so much of the liability for tax for the taxable year as does not exceed $25,000, plus (B) for taxable years ending on or before the last day of the suspension period (as de- fined in section 48(j)), 25 percent of so much of the liability for tax for the taxable year as exceeds $25,000, or (C) for taxable years ending after the last day of such suspension period, 50 percent of so much of the liability for tax for the tax- able year as exceeds $25,000. In applying subparagraph (C) to a taxable year beginning on or before the last day of such suspension period and ending after the last day of such suspension period, the per- cent referred to in such subparagraph shall be the sum of 25 percent plus the percent which bears the same ratio to 25 percent as the number of days in such year after the last day of the suspension period bears to the total number of days in such year. The amount otherwise determined under this paragraph shall be reduced (but not below zero) by the credit which would have been al- lowable under paragraph (1) for such taxable year with respect to suspension period prop- Page 52