Gross income of a lessee does not include any amount received in cash (or treated as a rent reduction) by a lessee from a lessor-
but only to the extent that such amount does not exceed the amount expended by the lessee for such construction or improvement.
Qualified long-term real property constructed or improved in connection with any amount excluded from a lessee's income by reason of subsection (a) shall be treated as nonresidential real property of the lessor (including for purposes of section 168(i)(8)(B)).
For purposes of this section-
The term "qualified long-term real property" means nonresidential real property which is part of, or otherwise present at, the retail space referred to in subsection (a) and which reverts to the lessor at the termination of the lease.
The term "short-term lease" means a lease (or other agreement for occupancy or use) of retail space for 15 years or less (as determined under the rules of section 168(i)(3)).
The term "retail space" means real property leased, occupied, or otherwise used by a lessee in its trade or business of selling tangible personal property or services to the general public.
Under regulations, the lessee and lessor described in subsection (a) shall, at such times and in such manner as may be provided in such regulations, furnish to the Secretary-
26 U.S.C. § 110
EDITORIAL NOTES
PRIOR PROVISIONSA prior section 110, act Aug. 16, 1954, ch. 736, 68A Stat. 33, related to income taxes paid by lessee corporations, prior to repeal by Pub. L. 101-508, §11801(a)(6), Nov. 5, 1990, 104 Stat. 1388-520.
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATE Pub. L. 105-34, §1213(e), Aug. 5, 1997, 111 Stat. 1001, provided that: "The amendments made by this section [enacting this section and amending sections 168 and 6724 of this title] shall apply to leases entered into after the date of the enactment of this Act [Aug. 5, 1997]."
- Secretary
- The term "Secretary" means the Secretary of the Treasury or his delegate.
- trade or business
- The term "trade or business" includes the performance of the functions of a public office.