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TITLE 26-INTERNAL REVENUE CODE full month in excess of 100 full months after the date on which such property was placed in service; (iv) in the case of section 1250 property with respect to which a loan is made or in- sured under title V of the Housing Act of 1949, 100 percent minus 1 percentage point for each full month the property was held after the date the property was held 100 full months; and (v) in the case of all other section 1250 property, 100 percent. In the case of a building (or a portion of a building devoted to dwelling units), if, on the average, 85 percent or more of the dwelling units contained In such building (or portion thereof) are units described in clause (ii), such building (or portion there- of) shall be treated as property described in clause (ii). Clauses (I), (ii), and (iv) shall not apply with respect to the additional depre- ciation described in subsection (b)(4). (2) Additional depreciation after December 31, 1969, and before January 1, 1976 (A) In general If section 1250 property is disposed of after December 31, 1969, and the amount determined under paragraph (1)(A)(ii) ex- ceeds the amount determined under para- graph (1)(A)(i), then the applicable percent- age of the lower of- (I) that portion of the additional depre- ciation attributable to periods after De- cember 31, 1969, and before January 1, 1976, in respect of the property, or (ii) the excess of the amount deter- mined under paragraph (1)(A)(ii) over the amount determined under paragraph (1)(A)(i), shall also be treated as gain which is ordi- nary income. Such gain shall be recognized notwithstanding any other provision of this subtitle. (B) Applicable percentage For purposes of subparagraph (A), the term "applicable percentage" means- (I) in the case of section 1250 property disposed of pursuant to a written contract which was, on July 24, 1969, and at all times thereafter, binding on the owner of the property, 100 percent minus 1 per- centage point for each full month the property was held after the date the prop- erty was held 20 full months; (ii) in the case of section 1250 property with respect to which a mortgage is in- sured under section 221(d)(3) or 236 of the National Housing Act, or housing fi- nanced or assisted by direct loan or tax abatement under similar provisions of State or local laws, and with respect to which the owner is subject to the restric- tions described in section 1039(b)(1)(B), 100 percent minus 1 percentage point for each full month the property was held after the date the property was held 20 full months; (iII) in the case of residential rental property (as defined in section 167(j)(2)(B)) other than that covered by clauses (i) and (it), 100 percent minus 1 percentage point for each full month the property was held after the date the prop- erty was held 100 full months; (iv) in the case of section 1250 property with respect to which a depreciation de- duction for rehabilitation expenditures was allowed under section 167(k), 100 per- cent minus 1 percentage point for each full month in excess of 100 full months after the date on which such property was placed in service; and (v) in the case of all other section 1250 property, 100 percent. Clauses (i), (ii), and (iII) shall not apply with respect to the additional depreciation described in subsection (b)(4). (3) Additional depreciation before January 1, 1970 (A) In general If section 1250 property is disposed of after December 31, 1963, and the amount determined under paragraph (1)(A)(ii) ex- ceeds the amount determined under para- graphs (1)(A)(i) and (2)(A)(i), then the ap- plicable percentage of the lower of- (i) that portion of the additional depre- ciation attributable to periods before Jan- uary 1, 1970, in respect of the property, or (i) the excess of the 3mount deter- mined under paragraph (1)(A)(i) over the amount determined under paragraphs (1)(A)(i) and (2)(A)(i), shall also be treated as gain which is ordi- nary income. Such gain shall be recognized notwithstanding any other provision of this subtitle. (B) Applicable percentage For purposes of subparagraph (A) the term "applicable percentage" means 100 percent minus 1 percentage point for each full month the property was held after the date on which the property was held for 20 full months. (b) Additional depreciation defined For purposes of this section- (1) In general The term "additional depreciation" means, in the case of any property, the depreciation adjustments in respect of such property; except that, in the case of property held more than one year, it means such adjustments only to the extent that they exceed the amount of the depreciation adjustments which would have resulted if such adjust- ments had been determined for each taxable year under the straight line method of ad- justment. For purposes of the preceding sen- tence, if a useful life (or salvage value) was used in determining the amount allowed as a deduction for any taxable year, such life (or value) shall be used in determining the depre- ciation adjustments which would have result- ed for such year under the straight line method. (2) Property held by lessee In the case of a lessee, in determining the depreciation adjustments which would have resulted in respect of any building erected (or other improvement made) on the leased prop- § 1250 Page 706