{"identifier":"/us/usc/t26/s110","title":26,"num":"\u00a7\u202f110.","heading":"Qualified lessee construction allowances for short-term leases","text":"\u00a7\u202f110.\nQualified lessee construction allowances for short-term leases\n(a)\nIn general\nGross income of a lessee does not include any amount received in cash (or treated as a rent reduction) by a lessee from a lessor\u2014\n(1) under a short-term lease of retail space, and\n(2) for the purpose of such lessee\u2019s constructing or improving qualified long-term real property for use in such lessee\u2019s trade or business at such retail space,\nbut only to the extent that such amount does not exceed the amount expended by the lessee for such construction or improvement.\n(b)\nConsistent treatment by lessor\nQualified long-term real property constructed or improved in connection with any amount excluded from a lessee\u2019s 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)).\n(c)\nDefinitions\nFor purposes of this section\u2014\n(1)\nQualified long-term real property\nThe term \u201cqualified long-term real property\u201d 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.\n(2)\nShort-term lease\nThe term \u201cshort-term lease\u201d 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)).\n(3)\nRetail space\nThe term \u201cretail space\u201d 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.\n(d)\nInformation required to be furnished to Secretary\nUnder 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\u2014\n(1) information concerning the amounts received (or treated as a rent reduction) and expended as described in subsection (a), and\n(2) any other information which the Secretary deems necessary to carry out the provisions of this section.","url":"https://projectusc.org/usc/t26/s110.html","content":[{"t":"sec","id":"/us/usc/t26/s110","children":[{"t":"num","text":"\u00a7\u202f110."},{"t":"heading","text":"Qualified lessee construction allowances for short-term leases"},{"t":"subsec","id":"/us/usc/t26/s110/a","children":[{"t":"num","text":"(a)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"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\u2014"},{"t":"para","id":"/us/usc/t26/s110/a/1","children":[{"t":"num","text":"(1)"},{"t":"content","text":" under a short-term lease of retail space, and","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s110/a/2","children":[{"t":"num","text":"(2)"},{"t":"content","text":" for the purpose of such lessee\u2019s constructing or improving qualified long-term real property for use in such lessee\u2019s trade or business at such retail space,","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"but only to the extent that such amount does not exceed the amount expended by the lessee for such construction or improvement.","tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s110/b","children":[{"t":"num","text":"(b)"},{"t":"heading","text":"Consistent treatment by lessor"},{"t":"content","children":[{"t":"p","text":"Qualified long-term real property constructed or improved in connection with any amount excluded from a lessee\u2019s 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)).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s110/c","children":[{"t":"num","text":"(c)"},{"t":"heading","text":"Definitions"},{"t":"chapeau","text":"For purposes of this section\u2014"},{"t":"para","id":"/us/usc/t26/s110/c/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"Qualified long-term real property"},{"t":"content","children":[{"t":"p","text":"The term \u201cqualified long-term real property\u201d 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.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s110/c/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Short-term lease"},{"t":"content","children":[{"t":"p","text":"The term \u201cshort-term lease\u201d 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)).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s110/c/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Retail space"},{"t":"content","children":[{"t":"p","text":"The term \u201cretail space\u201d 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.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s110/d","children":[{"t":"num","text":"(d)"},{"t":"heading","text":"Information required to be furnished to Secretary"},{"t":"chapeau","text":"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\u2014"},{"t":"para","id":"/us/usc/t26/s110/d/1","children":[{"t":"num","text":"(1)"},{"t":"content","text":" information concerning the amounts received (or treated as a rent reduction) and expended as described in subsection (a), and","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s110/d/2","children":[{"t":"num","text":"(2)"},{"t":"content","text":" any other information which the Secretary deems necessary to carry out the provisions of this section.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"text","text":"\n"},{"t":"text","text":"\n"}]}]}