[Code of Federal Regulations]
[Title 26, Volume 2]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.150-4]

[Page 729]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1--INCOME TAXES--Table of Contents
 
Sec. 1.150-4  Change in use of facilities financed with tax-exempt private activity bonds.

    (a) Scope. This section applies for purposes of the rules for change 
of use of facilities financed with private activity bonds under sections 
150(b)(3) (relating to qualified 501(c)(3) bonds), 150(b)(4) (relating 
to certain exempt facility bonds and small issue bonds), 150(b)(5) 
(relating to facilities required to be owned by governmental units or 
501(c)(3) organizations), and 150(c).
    (b) Effect of remedial actions--(1) In general. Except as provided 
in this section, the change of use provisions of sections 150(b) (3) 
through (5), and 150(c) apply even if the issuer takes a remedial action 
described in Secs. 1.142-2, 1.144-2, or 1.145-2.
    (2) Exceptions--(i) Redemption. If nonqualified bonds are redeemed 
within 90 days of a deliberate action under Sec. 1.145-2(a) or within 90 
days of the date on which a failure to properly use proceeds occurs 
under Sec. 1.142-2 or Sec. 1.144-2, sections 150(b) (3) through (5) do 
not apply during the period between that date and the date on which the 
nonqualified bonds are redeemed.
    (ii) Alternative qualifying use of facility. If a bond-financed 
facility is used for an alternative qualifying use under Secs. 1.145-2 
and 1.141-12(f), sections 150(b) (3) and (5) do not apply because of the 
alternative use.
    (iii) Alternative use of disposition proceeds. If disposition 
proceeds are used for a qualifying purpose under Secs. 1.145-2 and 
1.141-12(e), 1.142-2(c)(4), or 1.144-2, sections 150(b) (3) through (5) 
do not apply because of the deliberate action that gave rise to the 
disposition proceeds after the date on which all of the disposition 
proceeds have been expended on the qualifying purpose. If all of the 
disposition proceeds are so expended within 90 days of the date of the 
deliberate action, however, sections 150(b) (3) through (5) do not apply 
because of the deliberate action.
    (c) Allocation rules--(1) In general. If a change in use of a 
portion of the property financed with an issue of qualified private 
activity bonds causes section 150 (b)(3), (b)(4), or (b)(5) to apply to 
an issue, the bonds of the issue allocable to that portion under section 
150(c)(3) are the same as the nonqualified bonds determined for purposes 
of Secs. 1.142-1, 1.144-1, and 1.145-1, except that bonds allocable to 
all common areas are also allocated to that portion.
    (2) Special rule when remedial action is taken. If an issuer takes a 
remedial action with respect to an issue of private activity bonds under 
Secs. 1.142-2, 1.144-2, or 1.145-2, the bonds of the issue allocable to 
a portion of property are the same as the nonqualified bonds determined 
for purposes of those sections.
    (d) Effective dates. For effective dates of this section, see 
Sec. 1.141-16.

[T.D. 8712, 62 FR 2304, Jan. 16, 1997]

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