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TITLE 26-INTERNAL REVENUE CODE month beginning after such aircraft was placed in service, if such month is included in a taxable year ending before January 1, 1971, for which such aircraft was section 38 property (determined without regard to this paragraph). (C) Qualifying lease defined For purposes of subparagraph (A) the term "qualifying lease" means a lease from an air carrier (as defined in section 101 of the Federal Aviation Act of 1958, as amend- ed (49 U.S.C. 1301)) which complies with the provisions of the Federal Aviation Act of 1958, as amended, and the rules and reg- ulations promulgated by the Civil Aeronau- tics Board thereunder, but only if such lease was executed after April 18, 1969. (7) Motion picture films and video tapes (A) Disposition where depreciation exceeds 90 percent of basis or cost A qualified film (within the meaning of section 48(k)(1)(B)) which has an applicable percentage determined under section 48(k)(3) shall cease to be section 38 proper- ty with respect to the taxpayer at the close of the first day on which the aggregate amount allowable as a deduction under sec- tion 167 equals or exceeds 90 percent of the basis or cost of such film (adjusted for any partial dispositions). (B) Other dispositions In the case of a disposition of tne exclu- sive right to displa a qualified film which has an applicable percentage determined under section 48(k)(3) in one or more medi- ums of publication or exhibition in one or more specifically defined geographical areas over the remaining initial period of com- mercial exploitation of the film or tape in such geographical areas, the taxpayer shall be considered to have disposed of all or part of such film or tape and shall recompute the credit earned on all of his basis or cost or on that part of the basis or cost properly allocable to that part of the film or tape disposed of. In the case of an affiliated group of corporations, a transfer within the affiliated group shall not be treated as a disposition until there is a transfer outside the group. For purposes of the preceding sentence, the term "affiliated group" has the meaning given to such term by section 1504 (determined as if section 1504(b) did not include paragraph (3) thereof). For pur- poses of this paragraph, section 1504(a) shall be applied by substituting "50 per- cent" for "80 percent" each place it ap- pears. (b) Section not to apply in certain cases Subsection (a) shall not apply to- (1) a transfer by reason of death, or (2) a transaction to which section 381(a) ap- plies. For purposes of subsection (a), property shall not be treated as cea-;ug to be section 38 prop- erty with respect to the taxpayer by reason of a mere change in the form of conducting the trade or business so long as the property is re- tained in such trade or business as section 38 property and the taxpayer retains a substantial interest in such trade or business. (c) Special rule Any increase in tax under subsection (a) shall not be treated as tax imposed by this chapter for purposes of determining the amount of any credit allowable under subpart A. (Added Pub. L. 87-834, § 2(b), Oct. 16, 1962, 76 Stat. 966, and amended Pub. L. 91-172, title VII, § 703(c), Dec. 30, 1969, 83 Stat. 666; Pub. L. 91- 676, § 1, Jan. 12, 1971, 84 Stat. 2060; Pub. L. 92- 178, title I, §§ 102(c), 107(a)(1), (b)(1), Dec. 10, 1971, 85 Stat. 500, 507; Mar. 29, 1975, Pub. L. 94-12, title III, §302(b)(2)(A), (c)(1), (2). 89 Stat. 43, 44; Pub. L. 94-455, title VIII, § 804(b), title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1594, 1834.) AMENDMENTS 1976-Subsec. (a). Pub. L. 94-455, § 1906(b)(13)(A), struck out in introductory provision and in par. (3)(C) "or his delegate" following "Secretary". Subsec. (a)(7). Pub. L. 94-455, § 804(b), added subsec. (a)(7). 1975-Subsec. (a)(3). Pub. L. 94-12, § 302(b)(2)(A), added par. (3). Former par. (3) redesignated (4). Subsec. (a)(4). Pub. L. 94-12, § 302(b)(2)(A), (c)(1), re- designated par. (3) as (4) and in par. (4) as so redesig- nated substituted "paragraph (1) or (3)" for "para- graph (1)". A former par. (4), relating to increase or adjustment of tax where property is destroyed by ca- sualty, etc., was repealed by Pub. L. 92-178. Subsec. (a)(5). Pub, L. 94-12, § 302(c)(2), substituted "paragraph (4)" for "paragraph (3)". Subsec. (a)(6)(B). Pub. L. 94-12, § 302(c)(2), suibsti- tuted "paragraph (4)" for "paragraph (3)". 1971-Subsec. (a)(4). Pub. L. 92-178, § 107(a)(1), struck out subsec. (a)(4) relating to property destroyed by casualty, etc. Subsec. (a)(5). Pub. L. 92-178, § 107(b)(1), provided for the repeal of subsec. (a)(5) with the repeal not to apply, however, in the case of certain replacement property. See section 107(b)(2) of Pub. L. 92-178, set out in the Effective Date of 1971 Amendment note below. Subsec. (a)t6)(A). Pub. L. 92-178, § 102(c), substitut. ed "3 V, years" for "4 years". 1971-Subsec. (a). Pub. L. 91-676 added par. (6). 1969-Subsec. (a). Pub. L. 91-172, § 703(c)(2), added par. (5). Subsec. (a)(4). Pub. L. 91-172, § 703(c)(1), added pro- vision making subpars. (B) and (C) inapplicable to any casualty or theft occurring after April 18,. 1969. EFFECTIVE DATE OF 1976 AMENDMENT Amendment of subsec. (a)(7) by siction 804(b) of Pub. L, 94-455 applicable to taxable years beginning after Dec. 31, 1974, see section 804(e) of Pub. L. 94-455, set out as an Effective Date of 1976 Amendment note under section 48 of this title. EFFECTIVE DATE OF 1975 AMENDMENT Amendment by Pub. L. 94-12 applicable to taxable years ending after Dec. 31, 1974, see section 305(a) of Pub. L. 94-12, set out as an Effective Date of 1975 Amendment note under section 46 of this title. EFFECTIVE DATE OF 1971 AMENDMENT In redetermining qualified investment for purposes of subsec. (a) of this section in the case of any proper- ty which ceases to be section 38 property with respect to the taxpayer after Aug. 15, 1971, or which becomes public utility property after such date, sectiot, 46(c)(2) of this title as amended by section 102(a) c/! Pub. L. 92-178 as applicable, see section 102(d)(2) of Pub. L. 92-178, set out as an Effective Date of 1971 Amend- ment note under section 46 of this title. Page 67