qualified leasing group
(5) Waiver of controlled group rule where there is substantial leasing activity (A) In general In the case of the component members of a qualified leasing group, paragraph (4) shall be applied— (i) by substituting “80 percent” for “50 percent” in subparagraph (B) thereof, and (ii) as if paragraph (4) did not include subparagraph (C) thereof. (B) Qualified leasing group For purposes of this paragraph, the term “qualified leasing group” means a controlled group of corporations which, for the taxable year and each of the 2 immediately preceding taxable years, satisfied each of the following 3 requirements: (i) At least 3 employees During the entire year, the group had at least 3 full-time employees substantially all of the services of whom were services directly related to the equipment leasing activity of the qualified leasing members. (ii) At least 5 separate leasing transactions During the year, the qualified leasing members in the aggregate entered into at least 5 separate equipment leasing transactions. (iii) At least $1,000,000 equipment leasing receipts During the year, the qualified leasing members in the aggregate had at least $1,000,000 in gross receipts from equipment leasing. The term “qualified leasing group” does not include any controlled group of corporations to which, without regard to this paragraph, paragraph (4) applies. (C) Qualified leasing member For purposes of this paragraph, a corporation shall be treated as a qualified leasing member for the taxable year only if for each of the taxable years referred to in subparagraph (B)— (i) it is a component member of the controlled group of corporations, and (ii) it meets the requirements of paragraph (4)(B) (as modified by subparagraph (A)(i) of this paragraph).