ALLOCATION OF RESEARCH AND EXPERIMENTAL EXPENDITURES.

SEC. 101. ALLOCATION OF RESEARCH AND EXPERIMENTAL EXPENDITURES. (a) Extension.— Paragraph (5) of section 864(f) (relating to allocation of research and experimental expenditures) is amended to read as follows: “(5) Years to which rule applies.— “(A) In general.— This subsection shall apply to the taxpayer’s first 3 taxable years beginning after August 1, 1989, and on or before August 1, 1992. “(B) Reduction.— Notwithstanding subparagraph (A), in the case of the taxpayer’s first taxable year beginning after August 1, 1991, this subsection shall only apply to qualified research and experimental expenditures incurred during the first 6 months of such taxable year.” (b) Effective Date.— The amendment made by subsection (a) shall apply to taxable years beginning after August 1, 1989.