Page 136

PUBLIC LAW 103-66—AUG. 10, 1993 107 STAT. 447 the aggregate adjusted bases of depreciable real property (determined after any reductions under subsections (b) and (g)) held by the taxpayer immediately before the discharge (other than depreciable real property acquired in con- templation of such discharge). "(3) QUAUFIED REAL PROPERTY BUSINESS INDEBTEDNESS.— The term 'qiialified real property business indebtedness' means indebtedness which— ''(A) was incurred or assumed by the taxpayer in connection with real property used in a trade or business and is secured by such real property, **(B) was incurred or assumed before January 1, 1993, or if incurred or assumed on or after such date, is qualified acquisition indebtedness, and "(C) with respect to which such taxpayer makes an election to have this paragraph apply. Such term shall not include qualified farm indebtedness. Indebtedness under subparagraph (B) shall include indebted- ness resulting from the refinancing of indebtedness under subparagraph (B) (or this sentence), but only to the extent it does not exceed the amoimt of the indebtedness being refinanced. "(4) QUAUFIED ACQUISITION INDEBTEDNESS.—For purposes of paragraph (3)(B), the term 'qualified acquisition indebted- ness' means, with respect to any real property described in paragraph (3XA), indebtedness incurred or assumed to acquire, construct, reconstruct, or substantially improve such property. "(5) REGULATIONS.—^The Secretary shall issue such regula- tions as are necessary to carry out this subsection, including regulations preventing the abuse of this subsection through cross-coUateralization or other means." (c) TECHNICAL AMENDMENTS.— (1) Subparagraph (A) of section 108(aX2) is amended by 26 use 108. striking "and (C)" and inserting ", (C), and (D)". (2) Subparagraph (B) of section 108(a)(2) is amended to read as follows: **(B) INSOLVENCY EXCLUSION TAKES PRECEDENCE OVER QUALIFIED FARM EXCLUSION AND QUAUFIED REAL PROPERTY BUSINESS EXCLUSION.—Subparagraphs (C) and (D) of para- graph (1) shall not apply to a discharge to the extent the taxpayer is insolvent." (3) Subsection (d) of section 108 is amended— (A) by striking "subsections (a), (b), and (g)" in para- graphs (6) and (7XA) and inserting "subsections (a), (b), (c), and (g)", (B) by striking "SUBSECTIONS (a), (b), AND (g)" in the subsection heading and inserting "CERTAIN PROVISIONS", and (C) by striking "SUBSECTIONS (a), (b), AND (g)" in the headings of paragraphs (6) and (7XA) and inserting "CER- TAIN PROVISIONS". (4) Subparagraph (B) of section 108(dX7) is amended by adding at the end thereof the following new sentence: "The preceding sentence shall not apply to any discharge to the extent that subsection (aXlXD) applies to such discharge."