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136 STAT. 2009 PUBLIC LAW 117–169—AUG. 16, 2022 ‘‘(e) DENIAL OF DOUBLE BENEFIT.—In the case of an applicable entity making an election under this section with respect to an applicable credit, such credit shall be reduced to zero and shall, for any other purposes under this title, be deemed to have been allowed to such entity for such taxable year. ‘‘(f) MIRROR CODE POSSESSIONS.—In the case of any possession of the United States with a mirror code tax system (as defined in section 24(k)), this section shall not be treated as part of the income tax laws of the United States for purposes of determining the income tax law of such possession unless such possession elects to have this section be so treated. ‘‘(g) BASIS REDUCTION AND RECAPTURE.—Except as otherwise provided in subsection (c)(2)(A), rules similar to the rules of section 50 shall apply for purposes of this section. ‘‘(h) REGULATIONS.—The Secretary shall issue such regulations or other guidance as may be necessary to carry out the purposes of this section, including guidance to ensure that the amount of the payment or deemed payment made under this section is commensurate with the amount of the credit that would be other- wise allowable (determined without regard to section 38(c)).’’. (b) TRANSFER OF CERTAIN CREDITS.—Subchapter B of chapter 65, as amended by subsection (a), is amended by inserting after section 6417 the following new section: ‘‘SEC. 6418. TRANSFER OF CERTAIN CREDITS. ‘‘(a) IN GENERAL.—In the case of an eligible taxpayer which elects to transfer all (or any portion specified in the election) of an eligible credit determined with respect to such taxpayer for any taxable year to a taxpayer (referred to in this section as the ‘transferee taxpayer’) which is not related (within the meaning of section 267(b) or 707(b)(1)) to the eligible taxpayer, the transferee taxpayer specified in such election (and not the eligible taxpayer) shall be treated as the taxpayer for purposes of this title with respect to such credit (or such portion thereof). ‘‘(b) TREATMENT OF PAYMENTS MADE IN CONNECTION WITH TRANSFER.—With respect to any amount paid by a transferee tax- payer to an eligible taxpayer as consideration for a transfer described in subsection (a), such consideration— ‘‘(1) shall be required to be paid in cash, ‘‘(2) shall not be includible in gross income of the eligible taxpayer, and ‘‘(3) with respect to the transferee taxpayer, shall not be deductible under this title. ‘‘(c) APPLICATION TO PARTNERSHIPS AND S CORPORATIONS.— ‘‘(1) IN GENERAL.—In the case of any eligible credit deter- mined with respect to any facility or property held directly by a partnership or S corporation, if such partnership or S corporation makes an election under subsection (a) (in such manner as the Secretary may provide) with respect to such credit— ‘‘(A) any amount received as consideration for a transfer described in such subsection shall be treated as tax exempt income for purposes of sections 705 and 1366, and ‘‘(B) a partner’s distributive share of such tax exempt income shall be based on such partner’s distributive share of the otherwise eligible credit for each taxable year. Requirement. 26 USC 6418. Guidelines. Applicability. Determination. VerDate Sep 11 2014 15:35 Oct 25, 2022 Jkt 029139 PO 00169 Frm 00193 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL169.117 PUBL169 jmbennett on LAP3P8D0R2PROD with Publaw