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TITLE 26-INTERNAL REVENUE CODE tween the United States and one or more foreign countries; and (x) any property (other than a vessel or an aircraft) of a United States person which is used in international or territori- al waters within the northern portion of the Western Hemisphere for the purpose of exploring for, developing, removing, or transporting resources from ocean waters or deposits under such waters. For purposes of clause (x), the term "north- ern portion of the Western Hemisphere" means the area lying west of the 30th me- ridian west of Greenwich, east of the inter- national dateline, and north of the Equator, but not including any foreign country which is a country of South America. (3) Property used for lodging Property which is used predominantly to furnish lodging or in connection with the fur- nishing of lodging shall not be treated as sec- tion 38 property. The preceding sentence shall not apply to- (A) nonlodging commercial facilities which are available to persons not using the lodging facilities on the same basis as they are available to persons using the lodging facilities, (B) property used by a hotel or motel in connection with the trade or business of -urnishing lodging where the predominant portion of the accommodations is used by transients; and (C) coin-operated vending machines and coin-operated washing machines and dryers. (4) Property used by certain tax-exempt organiza- tions Property used by an organization (other than a cooperative described in section 521) which is exempt from the tax imposed by this chapter shall be treated as section 38 proper- ty only if such property is used predominant- ly in an unrelated trade or business the income of which is subject to tax under sec- tion 511. If the property is debt-financed property (as defined in section 514(c)), the basis or cost of such property for purposes of computing qualified investment under section 46(c) shall include only that percentage of the basis or cost which is the same percentage as is used under section 514(b), for the year the property is placed in service, in comput- ing the amount of gross income to be taken into account during such taxable year with respect to such property. (5) Property used by governmental units Property used by the United States, any State or political subdivision thereof, any in- ternational organization (other than the In- ternational Telecommunications Satellite Consortium or any successor organization), or any agency or instrumentality of any of the foregoing shall not be treated as section 38 property. (6) Livestock Livestock (other than horses) acquired by the taxpayer shall be treated as section 38 property, except that if substantially identi- cal livestock is sold or otherwise disposed of by the taxpayer during the one-year period beginning 6 months before the date of such acquisition and if section 47(a) (relating to certain dispositions, etc., of section 38 proper- ty) does not apply to such sale or other dispo- sition, then, unless such sale or other disposi- tion constitutes an involuntary conversion (within the meaning of section 1033), the cost of the livestock acquired shall, for purposes of this subpart, be reduced by an amount equal to the amount realized on such sale or other disposition. Horses shall not be treated as section 38 property. (7) Property completed abroad or predominantly of foreign origin (A) In general Property (other than pre-termination property) shall not be treated as section 38 property if- (I) such property was completed outside the United States, or (if) less than 50 percent of the basis of such property is attributable to value added within the United States. For purposes of this subparagraph, the term "United States" includes the Common- wealth of Puerto Rico and the possessions of the United States. (B) Period of application of paragnaph Except as provided in subparagraph (D), subparagraph (A) shall apply only with re- spect to property described in section 50- (i) the construction, reconstruction, or erection of which by the taxpayer is begun after August 15, 1971, and on or before the date of termination of Procla- mation 4074, or (ii) which is acquired pursuant to an order placed on or before the date of ter- mination of Proclamation 4074, unless ac- quired pursuant to an order which the taxpayer establishes was placed before August 16, 1971. (C) President may exempt articles If the President of the United States shall at any time determine that the application of such subparagraph (A) to any articles or class of articles is not in the public interest, he may by Executive order sr, cify that sub- paragraph (A) shall not apply to such arti cle or class of articles. Subparagraph (A) shall not apply to an article or class of arti- cles for the period specified in such Execu- tive order. Any period specified under the preceding sentence shall not apply to prop- erty ordered before (or to property the con- struction, reconstruction, or erection of which began before) the date of the Execu- tive order specifying such period, except that, if the President determines it to be in the public interest, such period shall apply to property ordered (or property the con- struction, reconstruction, or erection of which began) after a date (before the date of the Executive order) specified in the Ex- ecutive order. 71-999 0 - '78 - 7 (Vol. 7) Page 69