I.R.C. § 110(a) In General
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—
I.R.C. § 110(a)(2)
for the purpose of such lessee's constructing or improving qualified long-term real
property for use in such lessee's trade or business at such retail space,
but only to the extent that such amount does not exceed the amount expended by the
lessee for such construction or improvement.
I.R.C. § 110(b) Consistent Treatment By Lessor
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
I.R.C. § 110(c) Definitions
For purposes of this section—
I.R.C. § 110(c)(1) Qualified Long-Term Real Property
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.
I.R.C. § 110(c)(2) Short-Term 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)).
I.R.C. § 110(c)(3) Retail Space
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.
I.R.C. § 110(d) Information Required To Be Furnished To Secretary
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—
I.R.C. § 110(d)(1)
information concerning the amounts received (or treated as a rent reduction) and
expended as described in subsection (a), and
I.R.C. § 110(d)(2)
any other information which the Secretary deems necessary to carry out the provisions
of this section.
(Added by Pub. L. 105-34, title XII, Sec. 1213(a), Aug. 5, 1997, 111 Stat 788.)
Applicable to leases entered into after the date of the enactment of this Act [Enacted:
Aug. 5, 1997].
A prior version of section 110, Income taxes paid by lessee corporation, was repealed
by Pub. L. 101-508, title XI, Sec. 11801(a)(6), Nov. 5, 1990, 104 Stat. 1388-520, effective on Nov.
5, 1990. For provisions that nothing in repeal by Pub. L. 101-508 be construed to affect treatment of certain transactions occurring, property acquired,
or items of income, loss, deduction, or credit taken into account prior to Nov. 5,
1990, for purposes of determining liability for tax for periods ending after Nov.
5, 1990, see section 11821(b)
of Pub. L. 101-508, set out as a note under section 29 of this title.