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TITLE 26-INTERNAL REVENUE CODE erty but for the application of section 48(h)(1). (4) Liability for tax For purposes of paragraph (3), the liability for tax for the taxable year shall be the tax imposed by this chapter for such year, re- duced by the sum of the credits allowable under- (A) section 33 (relating to foreign tax credit), and (B) section 37 (relating to credit for the elderly). For purposes of this paragraph, any tax im- posed for the taxable year by section 56 (re- lating to minimum tax for tax preferences), section 72(m)(5)(B) (relating to 10 percent tax on premature distributions to owner-employ- ees), section 4Wf) (relating to additional tax on income from certain retirement accounts), section 402(e) (relating to tax on lump sum distributions), section 531 (relating to accu- mulated earnings tax), section 541 (relating to personal holding company tax) and any addi- tional tax imposed for the taxable year by section 1351(d)(1) (relating to recoveries of foreign expropriation losses), or section 1378 (relating to tax on certain capital gains of subchapter S corporations), and shall not be considered tax imposed by this chapter for such year. (5) Married individuals In the case of a husband or wife who files a separate return, the amount specified under subparagraphs (A) and (B) of paragraph (3) shall be $12,500 in lieu of $25,000. This para- graph shall not apply if the spouse of the tax- payer has no qualified investment for, and no unused credit carryback or carryover to, the taxable year of such spouse which ends within or with the taxpayer's taxable year. (6) Controlled groups In the case of a controlled group, the $25,000 amount specified under paragraph (3) shall be reduced for each component member of such group by apportioning $25,000 among the component members of such group in such manner as the Secretary shall by regula- tions prescribe. For purposes of the preceding sentence, the term "controlled group" has the meaning assigned to such term by section 1563(a). (7) Alternative limitation in the case of certain util. ities (A) In general If, for a taxable year ending after calen- dar year 1974 and before calendar year 1981, the amount of the qualified invest- ment of the taxpayer which is attributable to public utility property is 25 percent or more of his aggregate qualified investment, then subparagraph (C) of paragraph (3) of this subsection shall be applied by substi- tuting for 50 percent his applicable percent- age for such year. (B) Applicable percentage The applicable percentage of any taxpay- er for any taxable year is- (1) 50 percent, plus (ii) that portion of the tentative per- centage for the taxable year which the taxpayer's amount of qualified invest- ment which is public utility property bears to his aggregate qualified invest- ment. If the proportion referred to in clause (it) is 7F percent or more, the applicable percent- hge of the taxpayer for the year shall be 50 percent plus the tentative percentage for such year. (C) Tentative percentage For purposes of subparagraph (B), the tentative percentage shall be determined under the following table: If the taxable year ends in: The tentative percentage is: 1975 or 1976 ............................... 50 1977 ..................................... 40 1978 ..................................... 30 1979 ..................................... 20 1980 ..................................... 10 (D) Public utility property defined For purposes of this paragraph, the term "public utility property" has the meaning given to such term by the first sentence of subsection (c)(3)(B). (8) Alternative limitation in the case of certain rail. roads (A) In general If, for a taxable year ending after calen- dar year 1976, and before calendar year 1983, the amount of the qualified invest- ment of the taxpayer which is attributable to railroad property is 25 percent or more of his aggregate qualified investment, then subparagraph (C) of paragraph (3) of this subsection shall be applied by substituting for 50 percent his applicable percentage for such year. (B) Applicable percentage The applicable percentage of any taxpay- er for any taxable year under this para- graph is- (i) 50 percent, plus (ii) that portion of the tentative per- centage for the taxable year which the taxpayer's amount of qualified invest- ment which is railroad property bears to his aggregate qualified investment. If the proportion referred to in clause (ii) is 75 percent or more, the applicable percent- age of the taxpayer for the year shall be 50 percent plus the tentative percentage for such year. (C) Tentative percentage For purposes of subparagraph (B), the tentative percentage shall be determined under the following table: lithe taxable year ends in: The tentative percentage is: 1977 or 1978 ............................... 50 1979 ..................................... 40 1980 ..................................... 30 1981 ..................................... 20 1982 ..................................... 10 71 71-999 0 - 78 - 6 (Vol. 7) Page 53