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26 U.S.C. § 49 — At-risk rules
Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule**
(1) **Certain nonrecourse financing excluded from credit base**
(A) *Limitation* — The credit base of any property to which this paragraph applies shall be reduced by the nonqualified nonrecourse financing with respect to such credit base (as of the close of the taxable year in which placed in service).
(B) *Property to which paragraph applies* — This paragraph applies to any property which—
(i) is placed in service during the taxable year by a taxpayer described in section 465(a)(1), and
(ii) is used in connection with an activity with respect to which any loss is subject to limitation under section 465.
(C) *Credit base defined* — For purposes of this paragraph, the term “credit base” means—
(i) the portion of the basis of any qualified rehabilitated building attributable to qualified rehabilitation expenditures,
(ii) the basis of any energy property,
(iii) the basis of any property which is part of a qualifying advanced coal project under section 48A,
(iv) the basis of any property which is part of a qualifying gasification project under section 48B,
(v) the basis of any property which is part of a qualifying advanced energy project under section 48C,
(vi) the basis of any qualified property (as defined in subsection (b)(2) of section 48D) which is part of an advanced manufacturing facility (as defined in subsection (b)(3) of such section),
(vii) the basis of any qualified property which is part of a qualified facility under section 48E, and
(viii) the basis of any energy storage technology under section 48E.
(D) *Nonqualified nonrecourse financing*
(i) *In general* — For purposes of this paragraph and paragraph (2), the term “nonqualified nonrecourse financing” means any nonreco
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Source location: Title 26, Chapter 1, § 49; chapter-001-normal-taxes-and-surtaxes.md
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**(a) General rule**
(1) **Certain nonrecourse financing excluded from credit base**
(A) *Limitation* — The credit base of any property to which this paragraph applies shall be reduced by the nonqualified nonrecourse financing with respect to such credit base (as of the close of the taxable year in which placed in service).
(B) *Property to which paragraph applies* — This paragraph applies to any property which—
(i) is placed in service during the taxable year by a taxpayer described in section 465(a)(1), and
(ii) is used in connection with an activity with respect to which any loss is subject to limitation under section 465.
(C) *Credit base defined* — For purposes of this paragraph, the term “credit base” means—
(i) the portion of the basis of any qualified rehabilitated building attributable to qualified rehabilitation expenditures,
(ii) the basis of any energy property,
(iii) the basis of any property which is part of a qualifying advanced coal project under section 48A,
(iv) the basis of any property which is part of a qualifying gasification project under section 48B,
(v) the basis of any property which is part of a qualifying advanced energy project under section 48C,
(vi) the basis of any qualified property (as defined in subsection (b)(2) of section 48D) which is part of an advanced manufacturing facility (as defined in subsection (b)(3) of such section),
(vii) the basis of any qualified property which is part of a qualified facility under section 48E, and
(viii) the basis of any energy storage technology under section 48E.
(D) *Nonqualified nonrecourse financing*
(i) *In general* — For purposes of this paragraph and paragraph (2), the term “nonqualified nonrecourse financing” means any nonrecourse financing which is not qualified commercial financing.
(ii) *Qualified commercial financing* — For purposes of this paragraph, the term “qualified commercial financing” means any financing with respect to any property if—
(I) such property is acquired by the taxpayer from a person who is not a related person,
(II) the amount of the nonrecourse financing with respect to such property does not exceed 80 percent of the credit base of such property, and
(III) such financing is borrowed from a qualified person or represents a loan from any Federal, State, or local government or instrumentality thereof, or is guaranteed by any Federal, State, or local government.
Such term shall not include any convertible debt.
(iii) *Nonrecourse financing* — For purposes of this subparagraph, the term “nonrecourse financing” includes—
(I) any amount with respect to which the taxpayer is protected against loss through guarantees, stop-loss agreements, or other similar arrangements, and
(II) except to the extent provided in regulations, any amount borrowed from a person who has an interest (other than as a creditor) in the activity in which the property is used or from a related person to a person (other than the taxpayer) having such an interest.
In the case of amounts borrowed by a corporation from a shareholder, subclause (II) shall not apply to an interest as a shareholder.
(iv) *Qualified person* — For purposes of this paragraph, the term “qualified person” means any person which is actively and regularly engaged in the business of lending money and which is not—
(I) a related person with respect to the taxpayer,
(II) a person from which the taxpayer acquired the property (or a related person to such person), or
(III) a person who receives a fee with respect to the taxpayer’s investment in the property (or a related person to such person).
(v) *Related person* — For purposes of this subparagraph, the term “related person” has the meaning given such term by section 465(b)(3)(C). Except as otherwise provided in regulations prescribed by the Secretary, the determination of whether a person is a related person shall be made as of the close of the taxable year in which the property is placed in service.
(E) *Application to partnerships and S corporations* — For purposes of this paragraph and paragraph (2)—
(i) *In general* — Except as otherwise provided in this subparagraph, in the case of any partnership or S corporation, the determination of whether a partner’s or shareholder’s allocable share of any financing is nonqualified nonrecourse financing shall be made at the partner or shareholder level.
(ii) *Special rule for certain recourse financing of S corporation* — A shareholder of an S corporation shall be treated as liable for his allocable share of any financing provided by a qualified person to such corporation if—
(I) such financing is recourse financing (determined at the corporate level), and
(II) such financing is provided with respect to qualified business property of such corporation.
(iii) *Qualified business property* — For purposes of clause (ii), the term “qualified business property” means any property if—
(I) such property is used by the corporation in the active conduct of a trade or business,
(II) during the entire 12-month period ending on the last day of the taxable year, such corporation had at least 3 full-time employees who were not owner-employees (as defined in section 465(c)(7)(E)(i)) and substantially all the services of whom were services directly related to such trade or business, and
(III) during the entire 12-month period ending on the last day of such taxable year, such corporation had at least 1 full-time employee substantially all of the services of whom were in the active management of the trade or business.
(iv) *Determination of allocable share* — The determination of any partner’s or shareholder’s allocable share of any financing shall be made in the same manner as the credit allowable by section 38 with respect to such property.
(F) *Special rules for energy property* — Rules similar to the rules of subparagraph (F) of section 46(c)(8) (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) shall apply for purposes of this paragraph.
(2) **Subsequent decreases in nonqualified nonrecourse financing with respect to the property**
(A) *In general* — If, at the close of a taxable year following the taxable year in which the property was placed in service, there is a net decrease in the amount of nonqualified nonrecourse financing with respect to such property, such net decrease shall be taken into account as an increase in the credit base for such property in accordance with subparagraph (C).
(B) *Certain transactions not taken into account* — For purposes of this paragraph, nonqualified nonrecourse financing shall not be treated as decreased through the surrender or other use of property financed by nonqualified nonrecourse financing.
(C) *Manner in which taken into account*
(i) *Credit determined by reference to taxable year property placed in service* — For purposes of determining the amount of credit allowable under section 38 and the amount of credit subject to the early disposition or cessation rules under section 50(a), any increase in a taxpayer’s credit base for any property by reason of this paragraph shall be taken into account as if it were property placed in service by the taxpayer in the taxable year in which the property referred to in subparagraph (A) was first placed in service.
(ii) *Credit allowed for year of decrease in nonqualified nonrecourse financing* — Any credit allowable under this subpart for any increase in qualified investment by reason of this paragraph shall be treated as earned during the taxable year of the decrease in the amount of nonqualified nonrecourse financing.
**(b) Increases in nonqualified nonrecourse financing**
(1) **In general** — If, as of the close of the taxable year, there is a net increase with respect to the taxpayer in the amount of nonqualified nonrecourse financing (within the meaning of subsection (a)(1)) with respect to any property to which subsection (a)(1) applied, then the tax under this chapter for such taxable year shall be increased by an amount equal to the aggregate decrease in credits allowed under section 38 for all prior taxable years which would have resulted from reducing the credit base (as defined in subsection (a)(1)(C)) taken into account with respect to such property by the amount of such net increase. For purposes of determining the amount of credit subject to the early disposition or cessation rules of section 50(a), the net increase in the amount of the nonqualified nonrecourse financing with respect to the property shall be treated as reducing the property’s credit base in the year in which the property was first placed in service.
(2) **Transfers of debt more than 1 year after initial borrowing not treated as increasing nonqualified nonrecourse financing** — For purposes of paragraph (1), the amount of nonqualified nonrecourse financing (within the meaning of subsection (a)(1)(D)) with respect to the taxpayer shall not be treated as increased by reason of a transfer of (or agreement to transfer) any evidence of any indebtedness if such transfer occurs (or such agreement is entered into) more than 1 year after the date such indebtedness was incurred.
(3) **Special rules for certain energy property** — Rules similar to the rules of section 47(d)(3) (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) shall apply for purposes of this subsection.
(4) **Special rule** — Any increase in tax under paragraph (1) shall not be treated as tax imposed by this chapter for purposes of determining the amount of any credit allowable under this chapter.
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Federal law — U.S. Code and appendices · legal_authorities
For purposes of section 38, the amount of the investment credit determined under this section for any taxable year shall be the sum of—
(1) the rehabilitation credit,
(2) the energy credit,
(3) the qualifying advanced coal project credit,
(4) the qualifying gasification project credit,
(5) the qualifying advanced energy project credit,
(6) the advanced manufacturing investment credit, and
(7) the clean electricity investment credit.
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 46
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Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** Except as otherwise provided in this section, the depreciation deduction provided by section 167(a) for any tangible property shall be determined by using—
(1) the applicable depreciation method,
(2) the applicable recovery period, and
(3) the applicable convention.
**(b) Applicable depreciation method** For purposes of this section—
(1) **In general** — Except as provided in paragraphs (2) and (3), the applicable depreciation method is—
(A) the 200 percent declining balance method,
(B) switching to the straight line method for the 1st taxable year for which using the straight line method with respect to the adjusted basis as of the beginning of such year will yield a larger allowance.
(2) **150 percent declining balance method in certain cases** — Paragraph (1) shall be applied by substituting “150 percent” for “200 percent” in the case of—
(A) any 15-year or 20-year property not referred to in paragraph (3),
(B) any property (other than property described in paragraph (3)) which is a qualified smart electric meter or qualified smart electric grid system, or
(C) any property (other than property described in paragraph (3)) with respect to which the taxpayer elects under paragraph (5) to have the provisions of this paragraph apply.
(3) **Property to which straight line method applies** — The applicable depreciation method shall be the straight line method in the case of the following property:
(A) Nonresidential real property.
(B) Residential rental property.
(C) Any railroad grading or tunnel bore.
(D) Property with respect to which the taxpayer elects under paragraph (5) to have the provisions of this paragraph apply.
(E) Property described in subsection (e)(3)(D)(ii).
(F) Water utility property described in
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Allowance of credit**
(1) **In general** — In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter the amount of the qualified adoption expenses paid or incurred by the taxpayer.
(2) **Year credit allowed** — The credit under paragraph (1) with respect to any expense shall be allowed—
(A) in the case of any expense paid or incurred before the taxable year in which such adoption becomes final, for the taxable year following the taxable year during which such expense is paid or incurred, and
(B) in the case of an expense paid or incurred during or after the taxable year in which such adoption becomes final, for the taxable year in which such expense is paid or incurred.
(3) **$10,000 credit for adoption of child with special needs regardless of expenses** — In the case of an adoption of a child with special needs which becomes final during a taxable year, the taxpayer shall be treated as having paid during such year qualified adoption expenses with respect to such adoption in an amount equal to the excess (if any) of $10,000 over the aggregate qualified adoption expenses actually paid or incurred by the taxpayer with respect to such adoption during such taxable year and all prior taxable years.
(4) **Portion of credit refundable** — So much of the credit allowed under paragraph (1) as does not exceed $5,000 shall be treated as a credit allowed under subpart C and not as a credit allowed under this subpart.
**(b) Limitations**
(1) **Dollar limitation** — The aggregate amount of qualified adoption expenses which may be taken into account under subsection (a) for all taxable years with respect to the adoption of a child by the taxpayer shall not exceed $10,000.
(2) **Income limitation**
(A) *In general* —
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Married individuals filing joint returns and surviving spouses** There is hereby imposed on the taxable income of—
(1) every married individual (as defined in section 7703) who makes a single return jointly with his spouse under section 6013, and
(2) every surviving spouse (as defined in section 2(a)),
a tax determined in accordance with the following table: If taxable income is:The tax is: Not over $36,90015% of taxable income. Over $36,900 but not over $89,150$5,535, plus 28% of the excess over $36,900. Over $89,150 but not over $140,000$20,165, plus 31% of the excess over $89,150. Over $140,000 but not over $250,000$35,928.50, plus 36% of the excess over $140,000. Over $250,000$75,528.50, plus 39.6% of the excess over $250,000.
**(b) Heads of households** There is hereby imposed on the taxable income of every head of a household (as defined in section 2(b)) a tax determined in accordance with the following table: If taxable income is:The tax is: Not over $29,60015% of taxable income. Over $29,600 but not over $76,400$4,440, plus 28% of the excess over $29,600. Over $76,400 but not over $127,500$17,544, plus 31% of the excess over $76,400. Over $127,500 but not over $250,000$33,385, plus 36% of the excess over $127,500. Over $250,000$77,485, plus 39.6% of the excess over $250,000.
**(c) Unmarried individuals (other than surviving spouses and heads of households)** There is hereby imposed on the taxable income of every individual (other than a surviving spouse as defined in section 2(a) or the head of a household as defined in section 2(b)) who is not a married individual (as defined in section 7703) a tax determined in accordance with the following table: If taxable income is:The tax is: Not over $22,10015% of taxable income. Over $22,100 but not over $53,50
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Social security benefits and tier I railroad retirement benefits** Benefits payable under the old-age, survivors, and disability insurance program established under title II of the Social Security Act ([42 U.S.C. 401](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section401&num=0&edition=prelim) et seq.), and benefits payable under sections 231b and 231c 11 See References in Text note below. of title 45, shall be exempt from reduction under any order issued under this subchapter.
**(b) Veterans programs** The following programs shall be exempt from reduction under any order issued under this subchapter: All programs administered by the Department of Veterans Affairs. Special benefits for certain World War II veterans (28–0401–0–1–701).
**(c) Net interest** No reduction of payments for net interest (all of major functional category 900) shall be made under any order issued under this subchapter.
**(d) Refundable income tax credits and certain elective payments**
(1) **Refundable income tax credits** — Payments to individuals made pursuant to provisions of title 26 establishing refundable tax credits shall be exempt from reduction under any order issued under this subchapter.
(2) **Certain elective payments** — Payments made to taxpayers pursuant to elections under subsection (d) of [section 48D of title 26](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section48D&num=0&edition=prelim), or amounts treated as payments which are made by taxpayers under paragraph (1) of such subsection, shall be exempt from reduction under any order issued under this subchapter.
**(e) Non-defense unobligated balances** Unobligated balances of budget authority carried over from prior fiscal years, except balances in the defense categor
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Allowance of credit** There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of—
(1) the business credit carryforwards carried to such taxable year,
(2) the amount of the current year business credit, plus
(3) the business credit carrybacks carried to such taxable year.
**(b) Current year business credit** For purposes of this subpart, the amount of the current year business credit is the sum of the following credits determined for the taxable year:
(1) the investment credit determined under section 46,
(2) the work opportunity credit determined under section 51(a),
(3) the alcohol fuels credit determined under section 40(a),
(4) the research credit determined under section 41(a),
(5) the low-income housing credit determined under section 42(a),
(6) the enhanced oil recovery credit under section 43(a),
(7) in the case of an eligible small business (as defined in section 44(b)), the disabled access credit determined under section 44(a),
(8) the renewable electricity production credit under section 45(a),
(9) the empowerment zone employment credit determined under section 1396(a),
(10) the Indian employment credit as determined under section 45A(a),
(11) the employer social security credit determined under section 45B(a),
(12) the orphan drug credit determined under section 45C(a),
(13) the new markets tax credit determined under section 45D(a),
(14) in the case of an eligible employer (as defined in section 45E(c)), the small employer pension plan startup cost credit determined under section 45E(a),
(15) the employer-provided child care credit determined under section 45F(a),
(16) the railroad track maintenance credit determined under section 45G(a),
(17) the biodiesel fuels cr
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Rule for employment credits** No deduction shall be allowed for that portion of the wages or salaries paid or incurred for the taxable year which is equal to the sum of the credits determined for the taxable year under sections 45A(a), 45P(a), 45S(a)(1)(A), 51(a), and 1396(a). No deduction shall be allowed for that portion of the premiums paid or incurred for the taxable year which is equal to that portion of the paid family and medical leave credit which is determined for the taxable year under section 45S(a)(1)(B). In the case of a corporation which is a member of a controlled group of corporations (within the meaning of section 52(a)) or a trade or business which is treated as being under common control with other trades or businesses (within the meaning of section 52(b)), this subsection shall be applied under rules prescribed by the Secretary similar to the rules applicable under subsections (a) and (b) of section 52.
**(b) Credit for qualified clinical testing expenses for certain drugs**
(1) **In general** — No deduction shall be allowed for that portion of the qualified clinical testing expenses (as defined in section 45C(b)) otherwise allowable as a deduction for the taxable year which is equal to the amount of the credit allowable for the taxable year under section 45C (determined without regard to section 38(c)).
(2) **Similar rule where taxpayer capitalizes rather than deducts expenses** — If—
(A) the amount of the credit allowable for the taxable year under section 45C (determined without regard to section 38(c)), exceeds
(B) the amount allowable as a deduction for the taxable year for qualified clinical testing expenses (determined without regard to paragraph (1)),
the amount chargeable to capital account for the taxable year for such expe
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 280C
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Recapture in case of dispositions, etc.** Under regulations prescribed by the Secretary—
(1) **Early disposition, etc.**
(A) *General rule* — If, during any taxable year, investment credit property is disposed of, or otherwise ceases to be investment credit property with respect to the taxpayer, before the close of the recapture period, then the tax under this chapter for such taxable year shall be increased by the recapture percentage of the aggregate decrease in the credits allowed under section 38 for all prior taxable years which would have resulted solely from reducing to zero any credit determined under this subpart with respect to such property.
(B) *Recapture percentage* — For purposes of subparagraph (A), the recapture percentage shall be determined in accordance with the following table: If the property ceases to be investment credit property within—The recapturepercentage is: (i) One full year after placed in service100 (ii) One full year after the close of the period described in clause (i)80 (iii) One full year after the close of the period described in clause (ii)60 (iv) One full year after the close of the period described in clause (iii)40 (v) One full year after the close of the period described in clause (iv)20
(2) **Property ceases to qualify for progress expenditures**
(A) *In general* — If during any taxable year any building to which section 47(d) applied ceases (by reason of sale or other disposition, cancellation or abandonment of contract, or otherwise) to be, with respect to the taxpayer, property which, when placed in service, will be a qualified rehabilitated building, then the tax under this chapter for such taxable year shall be increased by an amount equal to the aggregate decrease in the credits allowed under section 38 f
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 50
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Federal law — U.S. Code and appendices · legal_authorities
Page 378
TITLE 26—INTERNAL REVENUE CODE
§ 49
Health and Welfare. For complete classification of this
Act to the Code, see Short Title note set out under sec-
tion 1441 of Title 42 and Tables.
Statutory Notes and Related Subsidiaries
EFFECTIVE DATE
Pub. L. 117–169, title I, § 13702(c), Aug. 16, 2022, 136
Stat. 1997, provided that: ‘‘The amendments made by
this section [enacting this section and amending sec-
tions 46, 49, and 50 of this title] shall apply to property
placed in service after December 31, 2024.’’
§ 49. At-risk rules
(a) General rule
(1) Certain nonrecourse financing excluded
from credit base
(A) Limitation
The credit base of any property to which
this paragraph applies shall be reduced by
the nonqualified nonrecourse financing with
respect to such credit base (as of the close of
the taxable year in which placed in service).
(B) Property to which paragraph applies
This paragraph applies to any property
which—
(i) is placed in service during the taxable
year by a taxpayer described in section
465(a)(1), and
(ii) is used in connection with an activ-
ity with respect to which any loss is sub-
ject to limitation under section 465.
(C) Credit base defined
For purposes of this paragraph, the term
‘‘credit base’’ means—
(i) the portion of the basis of any quali-
fied rehabilitated building attributable to
qualified rehabilitation expenditures,
(ii) the basis of any energy property,
(iii) the basis of any property which is
part of a qualifying advanced coal project
under section 48A,
(iv) the basis of any property which is
part of a qualifying gasification project
under section 48B,
(v) the basis of any property which is
part of a qualifying advanced energy
project under section 48C,
(vi) the basis of any qualified property
(as
Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 49
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