text:
Author:J. M. Keating

Articles in Popular Science Monthly

 * 1.

title: Author:J. M. Keating


text:
Page:United States Statutes at Large Volume 98 Part 1.djvu/873

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 825

(3) by striking out "commissioner" and inserting in lieu thereof ' 'special trial judge". (d) CONFORMING AMENDMENT.—Subsection (c) of section 7471

26 USC 7471.

(cross reference relating to compensation and travel and subsistence allowances of commissioners) is amended by striking out "COMMISSIONERS" in the heading and inserting in lieu thereof "SPECIAL TRIAL JUDGES", and by striking out "commissioners" and inserting in lieu thereof "special trial judges". (e) EFFECTIVE DATE.— 26 USC 7456 (1) The amendments made by this section shall take effect on note. the date of the enactment of this Act. (2) Any reference in any law to a commissioner of the Tax Court shall be treated as a reference to a special trial judge of the Tax Court. SEC. 465. PUBLICITY OF TAX COURT PROCEEDINGS. (a) IN GENERAL.—Section 7461 (relating to publicity of proceed- 26 USC 7461. ings) is amended to read as follows: "SEC. 7461. PUBLICITY OF PROCEEDINGS. "(a) GENERAL RULE.—Except as provided in subsection (b), all reports of the Tax Court and all evidence received by the Tax Court and its divisions, including a transcript of the stenographic report of the hearings, shall be public records open to the inspection of the public. "(b) EXCEPTIONS.— "(1) TRADE SECRETS OR OTHER CONFIDENTIAL INFORMATION.—

The Tax Court may make any provision which is necessary to prevent the disclosure of trade secrets or other confidential information, including a provision that any document or information be placed under seal to be opened only as directed by the court. ^: "(2) EVIDENCE, ETC.—After the decision of the Tax Court in lii'Jc / c i any proceeding has become final, the Tax Court may, upon motion of the taxpayer or the Secretary, permit the withdrawal by the party entitled thereto of originals of books, documents, and records, and of models, diagrams, and other exhibits, introduced in evidence before the Tax Court or any division; or the Tax Court may, on its own motion, make such other disposition thereof as it deems advisable." (b) EFFECTIVE DATE.—The amendment made by subsection (a) 26 USC 7461 shall take effect on the date of the enactment of this Act. "^o*®-

Subtitle F—SimpliHcation of Income Tax Credits SEC. 47L CREDITS GROUPED TOGETHER IN MORE LOGICAL ORDER.

(a) CREDITS DIVIDED INTO 4 CATEGORIES.—The table of subparts for part IV of subchapter A of chapter 1 (relating to credits against tax) is amended to read as follows: "Subpart A. Nonrefundable personal credits. "Subpart B. Foreign tax credit, etc. "Subpart C. Refundable credits. "Subpart D. Business-related credits." (b) EXISTING CREDITS ASSIGNED TO APPROPRIATE CATEGORY.—Part

IV of subchapter A of chapter 1 is amended by striking out the

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license: Creative Commons - Attribution Share-Alike - https://creativecommons.org/licenses/by-sa/4.0/


text:
Page:United States Statutes at Large Volume 98 Part 1.djvu/874

 98 STAT. 826

•^

PUBLIC LAW 98-369—JULY 18, 1984

heading and table of sections for subpart A and inserting in lieu thereof the following: ^ "Subpart A—Nonrefundable Personal Credits "Sec. 21. Expenses for household and dependent care services necessary for gainful employment. "Sec. 22. Credit for the elderly and the permanently and totally disabled. "Sec. 23. Residential energy credit. "Sec. 24. Contributions to candidates for public office. ^ _.,.^ "Sec. 25. Limitation based on tax liability; definition of tax liability.

.,j ^,.., ,
 * ' ' '^'. i^^'fj

"Subpart B—Foreign Tax Credit, Etc.

[dt. jc* > i.*i.

b«5£

"Sec. 27. Taxes of foreign countries and possessions of the United States; possession tax credit. "Sec. 28. Clinical testing expenses for certain drugs for rare diseases or conditions. "Sec. 29. Credit for producing fuel from a nonconventional source. "Sec. 30. Credit for increasing research activities. '

"Subpart C—Refundable Credits "• 9CS.

"Sec. 31. Tax withheld on wages. 'ffj"; "Sec. 32. Earned income. "Sec. 33. Tax withheld at source on nonresident aliens and foreign corporations. "Sec. 34. Certain uses of gasoline and special fuels. -"Sec. 35. Overpayments of tax.

"Subpart D—Business Related Credits "Sec. 38. General business credit. "Sec. 39. Carryback and carryforward of unused credits. "Sec. 40. Alcohol used as fuel. "Sec. 41. Employee stock ownership credit." (c) SECTIONS MOVED TO APPROPRIATE PLACE IN PART IV.—

26 USC 21 et seq.

I •

(1) DESIGNATION.—The following soctions of such part IV are henceforth to be designated in accordance with the following table: New subpart Old section number: New section number: designation: 44A 21 A 37 22 A 44C 23 A 41 24 A 33 27 B 44H 28 B 44D 29 B 44F 30 B 31 31 C 43 32 C 32 33 C 39 34 C 45 35 C 44E 40 D 44G 41 D (2) PLACED IN APPROPRIATE SUBPARTS.—Each section for which

paragraph (1) provides a new section number is hereby moved to the appropriate place in the appropriate subpart of such part IV.

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text:
Page:United States Statutes at Large Volume 98 Part 1.djvu/875

 PUBLIC LAW 98-369—JULY 18, 1984 SEC. 472. UNIFORM LIMITATION CREDITS.

ON

PERSONAL

98 STAT. 827

NONREFUNDABLE
 * s

,;? f ^

Subpart A of part IV of subchapter A of chapter 1 is amended by adding after section 24 the following new section: "SEC. 25. LIMITATION BASED ON TAX LIABILITY; DEFINITION OF TAX LIABILITY. "(a)

26 USC 25. Post, p. 905.

LIMITATION BASED ON AMOUNT OF TAX.—The aggregate

amount of credits allowed by this subpart for the taxable year shall not exceed the taxpayer's tax liability for such taxable year. "(b) TAX LIABILITY.—For purposes of this section— ^ "(1) IN GENERAL.—The term 'tax liability' means the tax imposed by this chapter for the taxable year. "(2) EXCEPTION FOR CERTAIN TAXES.—For purposes of paragraph (1), any tax imposed by any of the following provisions shall not be treated as tax imposed by this chapter: "(A) section 56 (relating to corporate minimum tax), "(B) subsection (m)(5)(B), (o)(2), or (q) of section 72 (relating to additional tax on certain distributions), "(C) section 408(f) (relating to additional tax on income from certain retirement accounts), "(D) section 531 (relating to accumulated earnings tax), • * "(E) section 541 (relating to personal holding company tax), "(F) section 1351(d)(1) (relating to recoveries of foreign expropriation losses), "(G) section 1374 (relating to tax on certain capital gains of S corporations), and "(H) section 1375 (relating to tax imposed when passive investment income of corporation having subchapter C earnings and profits exceeds 25 percent of gross receipts).

r:i8 Q dni,

"(c) SIMILAR RULE FOR ALTERNATIVE MINIMUM TAX FOR TAXPAYERS OTHER THAN CORPORATIONS.— "For treatment of tax imposed by section 55 as not imposed by this chapter, see section 55(c)." SEC. 473. UNIFORM CARRYOVER PROVISIONS FOR BUSINESS-BELATED CREDITS.

Subpart D of part IV of subchapter A of chapter 1 is amended by inserting before section 40 the following new sections: "SEC. 38. GENERAL BUSINESS CREDIT. "(a) ALLOWANCE OF CREDIT.—There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of— "(1) the business credit carr3rforwards carried to such taxable year, "(2) the amount of the current year business credit, plus "(3) the business credit carrybacks carried to such taxable year. "(b) CURRENT YEAR BUSINESS CREDIT.—For purposes of this subpart, the amount of the current year business credit is the sum of the following credits determined for the taxable year: "(1) the investment credit determined under section 46(a), "(2) the targeted jobs credit determined under section 51(a), "(3) the alcohol fuels credit determined under section 40(a), plus

26 USC 38. "*' ^
 * - •, • -j\

• x i ' '' '\ Post, p. 834. Post, p. 837. Ante, p. 826.

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text:
Page:United States Statutes at Large Volume 98 Part 1.djvu/876

 98 STAT. 828

PUBLIC LAW 98-369—JULY 18, 1984 "(4) the employee stock ownership credit determined under section 41(a).

Ante, p. 826.

"(c) LIMITATION BASED ON AMOUNT OF TAX.—

-';

"(1) IN GENERAL.—The credit allowed under subsection (a) for any taxable year shall not exceed the sum of— "(A) so much of the taxpayer's net tax liability for the taxable year as does not exceed $25,000, plus "(B) 85 percent of so much of the taxpayer's net tax liability for the taxable year as exceeds $25,000. "(2) NET TAX LIABILITY.—For purposes of paragraph (1), the term 'net tax liability' means the tax liability (as defined in section 25(b)), reduced by the sum of the credits allowable under subparts A and B of this part.

. ',; ^

Ante, p. 827.

"(3) SPECIAL RULES.— "(A) MARRIED INDIVIDUALS.—In

V' li'Kfe

the case of a husband or wife who files a separate return, the amount specified under subparagraphs (A) and (B) of paragraph (1) shall be $12,500 in lieu of $25,000. This subparagraph shall not apply if the spouse of the taxpayer has no business credit carryforward or carryback to, and has no current year business credit for, the taxable year of such spouse which ends within or with the taxpayer s taxable year. "(B) CONTROLLED GROUPS.—In the case of a controlled group, the $25,000 amount specified under subparagraphs (A) and (B) of paragraph (1) shall be reduced for each component member of such group by apportioning $25,000 among the component members of such group in such manner as the Secretary shall by regulations prescribe. For purposes of the preceding sentence, the term 'controlled group' has the meaning given to such term by section 1563(a). "(C) LIMITATIONS WITH RESPECT TO CERTAIN PERSONS.—In

,.,.f, 1. #

^„,,,, • J;^ ':

the case of a person described in subparagraph (A) or (B) of section 46(e)(1), the $25,000 amount specified under subparagraphs (A) and (B) of paragraph (1) shall equal such person's ratable share (as determined under section 46(e)(2)) of such amount. "(D) ESTATES AND TRUSTS.—In the case of an estate or trust, the $25,000 amount specified under subparagraphs (A) and (B) of paragraph (1) shall be reduced to an amount which bears the same ratio to $25,000 as the portion of the income of the estate or trust which is not allocated to beneficiaries bears to the total income of the estate or trust.

"(d) SPECIAL RULES FOR CERTAIN REGULATED COMPANIES.—In the

case of any taxpayer to which section 46(f) applies, for purposes of Post, pp. 840,842. sections 46(f), 47(a), 196(a), and 404(i) and any other provision of this title where it is necessary to ascertain the extent to which the Post, p. 832; credits determined under section 40(a), 41(a), 46(a), or 51(a) are used ante, p. 826; in a taxable year or as a carryback or carryforward, the order in post, pp. 834, which such credits are used shall be determined on the basis of the order in which they are listed in subsection (b). 26 USC 39. Ante, p. 826.

"SEC. 39. CARRYBACK AND CARRYFORWARD OF UNUSED CREDITS. «/ \ T n

(a) IN GENERAL.— "(1) 3-YEAR CARRYBACK AND 15-YEAR CARRYFORWARD.—If the

f s <

,.,y

sum of the business credit carryforwards to the taxable year plus the amount of the current year business credit for the

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text:
Page:United States Statutes at Large Volume 98 Part 1.djvu/877

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 829

taxable year exceeds the amount of the limitation imposed by subsection (c) of section 38 for such taxable year (hereinafter in Ante, p. 827. this section referred to as the 'unused credit year'), such excess (to the extent attributable to the amount of the current year business credit) shall be— "(A) a business credit carryback to each of the 3 taxable years preceding the unused credit year, and . M>* "(B) a business credit carryforward to each of the 15 . r.ttaxable years following the unused credit year, and, subject to the limitations imposed by subsections (b) and (c), .. yk shall be taken into account under the provisions of section 38(a) in the manner provided in section 38(a). "(2) AMOUNT CARRIED TO EACH YEAR.— "(A) ENTIRE AMOUNT CARRIED TO FIRST YEAR.—The

H

1^ 1,-.

entire amount of the unused credit for an unused credit year shall be carried to the earliest of the 18 taxable years to which (by reason of paragraph (1)) such credit may be carried. "(B) AMOUNT CARRIED TO OTHER 17 YEARS.—The amount of the unused credit for the unused credit year shall be carried to each of the other 17 taxable years to the extent that such unused credit may not be taken into account under section 38(a) for a prior taxable year because of the limitations of subsections (b) and (c).

^-.

i.

i,, >.. i -^^

"(b) LIMITATION ON CARRYBACKS.—The amount of the unused

credit which may be taken into account under section 38(a)(3) for any preceding taxable year shall not exceed the amount by which the limitation imposed by section 38(c) for such taxable year exceeds the sum of— "(1) the amounts determined under paragraphs (1) and (2) of •. section 38(a) for such taxable year, plus "(2) the amounts which (by reason of this section) are carried back to such taxable year and are attributable to taxable years preceding the unused credit year.

.,

. ' "

"(c) LIMITATION ON CARRYFORWARDS.—The amount of the unused

credit which may be taken into account under section 38(a)(1) for any succeeding taxable year shall not exceed the amount by which the limitation imposed by section 38(c) for such taxable year exceeds the sum of the amounts which, by reason of this section, are carried to such taxable year and are attributable to teixable years preceding the unused credit year. "(d) TRANSITIONAL RULES.— "(1) CARRYFORWARDS.—

"(A) IN GENERAL.—Any carryforward from an unused credit year under section 46, 50A, 53, 44E, or 44G which has Post, p. 838; ante, not expired before the beginning of the first taxable year P 826. beginning after December 31, 1983, shall be aggregated with other such carryforwards from such unused credit year and shall be a business credit carryforward to each ji taxable year beginning after December 31, 1983, which is 1 •; M of the first 15 taxable years after such unused credit year. "(B) AMOUNT CARRIED FORWARD.—The amount carried forward under subparagraph (A) to any taxable year shall be properly reduced for any amount allowable as a credit with respect to such carryforward for any taxable year before the year to which it is being carried. "(2) CARRYBACKS.—In determining the amount allowable as a credit for any taxable year beginning before January 1, 1984, as ^

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text: Author:William Williams Keen

title: Author:William Williams Keen


text:
Page:United States Statutes at Large Volume 98 Part 1.djvu/878

 98 STAT. 830

PUBLIC LAW 98-369—JULY 18, 1984 V

 * ^i.'4,ai a.

Ante, p. 494. Ante, p. 827. Ante, p. 827.

.

the result of the carryback of a general business tax credit from a taxable year beginning after December 31, 1983— "(A) paragraph (1) of subsection (b) shall be applied as if it read as follows: " *(1) the sum of the credits allowable for such taxable year under sections 38, 40, 44B, 44E, and 44G (as in effect before enactment of the Tax Reform Act of 1984), plus', and "(B) for purposes of section 38(c) the net tax liability for such taxable year shall be the tax liability (as so defined in section 2503)) reduced by the sum of the credits allowable for such taxable year under sections 33, 37, 41, 44A, 44C, 44D, 44F, and 44H (as so in effect)."

SEC. 474. TECHNICAL AND CONFORMING AMENDMENTS.

Ante, p. 825.

(a) REFERENCES TO OLD AND N E W PROVISIONS.—Whenever in this section reference is made to an old or new section or other provision, the reference is to the provision before (in the case of "old") or after (in the case of "new") the changes made by section 471 of this Act. (h) OLD SECTION 21.—

26 USC 15, 21. 26 USC 441.

26 USC 6013.

(1) REDESIGNATION.—Old section 21 (relating to effect of changes) is redesignated as section 15. (2) CONFORMING

AMENDMENTS.—Sections

441(f)(2)(A)

and

6013(c) are each amended by striking out "21" and inserting in lieu thereof "15". (3) TABLE OF SECTIONS.—The table of sections for part III of subchapter A of chapter 1 is amended by striking out the item relating to section 21 and inserting in lieu thereof the following: "Sec. 15. Effect of changes."

26 USC 21. Ante, p. 826.

• M •? Rt V ' f

26 USC 22. Ante, p. 826.

(c) NEW SECTION 21.—New section 21 (relating to expenses for household and dependent care services necessary for gainful employment) is amended— (1) by striking out subsection (b) and by redesignating subsec, tions (c), (d), (e), (f), and (g) as subsections (b), (c), (d), (e), and (f), respectively, (2) by striking out "subsection (c)(1)" in subsection (a) and inserting in lieu thereof "subsection (b)(l)", (3) by striking out "subsection (c)(2)" in subsection (a) and inserting in lieu thereof "subsection (b)(2)", (4) by striking out "subsection (c)(1)(C)" in paragraph (2) of subsection (d) (as redesignated by paragraph (1)) and inserting in lieu thereof "subsection (b)(l)(C)", (5) by striking out "subsection (d)(1)" in subparagraph (A) of subsection (d)(2) (as redesignated by paragraph (D) and inserting in lieu thereof, "subsection (c)(1)", (6) by striking out "subsection (d)(2)" in subparagraph (B) of subsection (d)(2) (as redesignated by paragraph (D) and inserting in lieu thereof "subsection (c)(2)", and (7) by striking out "subsection (c)(1)" in subsection (e)(5) (as redesignated by paragraph (1)) and inserting in lieu thereof "subsection (b)(l)'^ (d) N E W SECTION 22.—New Section 22 (relating to the credit for the elderly and the permanently and totally disabled) is amended— (1) by striking out "Section 37 amount" each place it appears in the text and inserting in lieu thereof "section 22 amount", (2) by striking out the heading of subsection (c) and inserting in lieu thereof "(c) SECTION 22 AMOUNT.—", and

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text:
Page:United States Statutes at Large Volume 98 Part 1.djvu/879

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 831

(3) by amending subsection (d) to read as follows: "(d) ADJUSTED GROSS INCOME LIMITATION.—If the adjusted gross income of the taxpayer exceeds— "(1) $7,500 in the case of a single individual, "(2) $10,000 in the case of a joint return, or "(3) $5,000 in the case of a married individual filing a separate return, the section 22 amount shall be reduced by one-half of the excess of the adjusted gross income over $7,500, $10,000, or $5,000, as the case ~ may be." (e) NEW SECTION 23.—Subsection (b) of new section 23 (relating to 26 USC 23. i residential energy credit) is amended by striking out paragraphs (5) ^"^e- P- 826. and (6) and inserting in lieu thereof the following: "(5) CARRYFORWARD OF UNUSED CREDIT.—

"(A) IN GENERAL.—If the credit allowable under subsec\ tion (a) for any taxable year exceeds the limitation imposed by section 25(a) for such taxable year reduced by the sum of Ante, p. 827. the credits allowable under this subpart (other than this section), such excess shall be carried to the succeeding taxable year and added to the credit allowable under sub: ':h J. section (a) for such succeeding taxable year. u;; >.u^nh i "(B) No CARRYFORWARD TO TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 1987.—No amount may be carried ^- " under subparagraph (A) to any taxable year beginning after December 31, 1987." (f) NEW SECTION 24.—Subsection (b) of new section 24 (relating to 26 USC 24. contributions to candidates for political office) is amended by strik- ^"^^. P 826. ing out paragraph (2) and by redesignating paragraph (3) as para£ graph (2). (g) N E W SECTION 28.—

26 USC 28.

(1) New section 28 is amended— ^«^«' P- 826. (A) by striking out "section 44F" each place it appears and inserting in lieu thereof "section 30", and ,Slf!l\ (B) by striking out "section 44F(b)" in subsection (c)(2) and inserting in lieu thereof "section 30(b)," and (C) by striking out "section 44F(f)" in subsection (d)(4) and inserting in lieu thereof "section 30(f)". (2) Paragraph (2) of new section 28(d) is amended to read as follows: "(2) LIMITATION BASED ON AMOUNT OF TAX.—The

credit

allowed by this section for any taxable year shall not exceed the taxpayer's tax liability for the taxable year (as defined in section 25(b)), reduced by the sum of the credits allowable under subpart A and section 27." (h) N E W SECTION 29.—Paragraph (5) of new section 29(h) (relating to credit for producing fuel from a nonconventional source) is amended to read as follows:

Ante, p. 827. Ante, pp. 825, 826. ^^ Y^^ coc ^"^^' ^ ^''^•

"(5) APPLICATION WITH OTHER CREDITS.—The credit allowed by

subsection (a) for a taxable year shall not exceed the taxpayer's tax liability for the taxable year (as defined in section 25(b)), reduced by the sum of the credits allowable under subpart A and sections 27 and 28." (i) NEW SECTION 30.—

i

Ss8,q.>; 26 USC 30

(1) New section 30 (relating to credit for increasing research Ante, p. 826. activities) is amended— (A) by striking out "in computing the credit under section 40 or 44B" in subsection (b)(2)(D)(iii) and inserting in lieu

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text: Appletons' Cyclopædia of American Biography/Ronckendorff, William


text:
Page:United States Statutes at Large Volume 98 Part 1.djvu/880

 98 STAT. 832

PUBLIC LAW 98-369—JULY 18, 1984 ggo'j.

Ante, p. 827. Ante, pp. 825, 826. 26 USC 30 note.

Ante, p. 826.

26 USC 33. Ante, p. 826.

thereof "in determining the targeted jobs credit under section 51(a)", and (B) by amending subparagraph (A) of subsection (g)(1) to read as follows: "(A) IN GENERAL.—Except as provided in subparagraph (B), the credit allowed by subsection (a) for any taxable year shall not exceed the taxpayer's tax liability for the taxable year (as defined in section 25(b)), reduced by the sum of the credits allowable under subpart A and sections 27, 28, and 29." (2) N E W SECTION 30 TREATED AS CONTINUATION OF OLD SECTION

44F.—For purposes of determining— (A) whether any excess credit under old section 44F for a taxable year beginning before January 1, 1984, is allowable as a carryover under new section 30, and (B) the period during which new section 30 is in effect, new section 30 shall be treated as a continuation of old section 44F (and shall apply only to the extent old section 44F would have applied). (j) NEW SECTION 33.—New section 33 (relating to tax withheld at source on nonresident aliens and foreign corporations and on taxfree covenant bonds) is amended to read as follows: "SEC. 33. TAX WITHHELD AT SOURCE ON NONRESIDENT ALIENS AND FOREIGN CORPORATIONS.

26 USC 1441. 26 USC 40. Ante, p. 826. Post, p. 833. Ante, p. 827.

"There shall be allowed as a credit against the tax imposed by this subtitle the amount of tax withheld at source under subchapter A of chapter 3 (relating to withholding of tax on nonresident aliens and on foreign corporations)." (k) N E W SECTION 40.—New section 40 (relating to alcohol used as fuel) is amended— (1) by amending subsection (a) to read as follows: "(a) GENERAL RULE.—For purposes of section 38, the alcohol fuels credit determined under this section for the taxable year is an amount equal to the sum of— "(1) the alcohol mixture credit, plus "(2) the alcohol credit.", (2) by striking out "the credit allowable under this section" in subsection (c) and inserting in lieu thereof "the credit determined under this section", (3) by striking out "credit was allowable" each place it appears in paragraph (3) of subsection (d) and inserting in lieu thereof "credit was determined", (4) by striking out subsection (e) and redesignating subsection (f) as subsection (e), (5) by amending paragraph (2) of subsection (e) (as redesignated by paragraph (4)) to read as follows: "(2) N O CARRYOVERS TO YEARS AFTER 1994.—No amount may

Ante, p. 828.

be carried under section 39 by reason of this section (treating the amount allowed by reason of this section as the first amount allowed by this subpart) to any taxable year beginning after December 31, 1994.", and (6) by adding at the end thereof the following new subsection: "(f) ELECTION TO HAVE ALCOHOL FUELS CREDIT NOT APPLY.—

"(1) IN GENERAL.—A taxpayer may elect to have this section not apply for any taxable year.

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text:
Page:United States Statutes at Large Volume 98 Part 1.djvu/881

 PUBLIC LAW 98-369—JULY 18, 1984 "(2) TIME FOR MAKING ELECTION.—An election under paragraph (1) for any taxable year may be made (or revoked) at any time before the expiration of the 3-year period beginning on the last date prescribed by law for filing the return for such taxable year (determined without regard to extensions). "(3) MANNER OF MAKING ELECTION.—An election under paragraph (1) (or revocation thereof) shall be made in such manner as the Secretary may by regulations prescribe." (1) N E W SECTION 41.—New section 41 (relating to employee stock ownership plan) is amended— (1) by amending paragraph (1) of subsection (a) to read as follows: "(1) AMOUNT OF CREDIT.—In the case of a corporation which elects to have this section apply for the taxable year and which meets the requirements of subsection (c)(1), for purposes of section 38, the amount of the employee stock ownership credit determined under this section for the taxable year is an amount equal to the amount of the credit determined under paragraph (2) for such taxable year.", (2) by amending subsection (b) to read as follows: "(b) CERTAIN REGULATED COMPANIES.—No credit attributable to compensation taken into account for the ratemaking purposes involved shall be determined under this section with respect to a taxpayer if— "(1) the taxpayer's cost of service for ratemaking purposes or in its regulated books of account is reduced by reason of any portion of such credit which results from the transfer of employer securities or cash to a tax credit employee stock ownership plan which meets the requirements of section 409; "(2) the base to which the taxpayer's rate of return for ratemaking purposes is applied is reduced by reason of any portion of such credit which results from a transfer described in paragraph (1) to such employee stock ownership plan; or "(3) any portion of the amount of such credit which results from a transfer described in paragraph (1) to such employee stock ownership plan is treated for ratemaking purposes in any way other than as though it had been contributed by the taxpayer's common shareholders. Under regulations prescribed by the Secretary, rules similar to the rules of paragraphs (4) and (7) of section 46(f) shall apply for purposes of the preceding sentence.", and (3) by striking out "the credit allowed under this section" in subsection (c)(3) and inserting in lieu thereof "the credit determined under this section".

98 STAT. 833

26 USC 4i. ^"^^' P- ^^^- ^ '•-'' » '^'*^ Ante, p. 827.

Post, p. 852.

(m) REPEAL OF CERTAIN OLD PROVISIONS.—

(1) Old sections 38, 40, 44, and 44B are hereby repealed. 26 USC 38,40, (2) Old subpart C of part IV of subchapter A of chapter 1 is ^4 44B. hereby repealed. ^6^^^^ ^^^> (n) REDESIGNATION OF OLD SUBPARTS.—

(1) Old subparts B and D of part IV of subchapter A of chapter 1 are redesignated as subparts E and F, respectively. (2) The subpart heading for subpart F of part IV of subchapter A of chapter 1 (as so redesignated) is amended to read as follows:

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text:
Page:United States Statutes at Large Volume 98 Part 1.djvu/882

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 834

"Subpart F—Rules for Computing Targeted Jobs Credit". (3) The table of subparts for such part IV (as amended by subsection (a) of section 471) is amended by adding at the end thereof the following: "Subpart E. Rules for computing credit for investment in certain depreciable property. "Subpart F. Rules for computing targeted jobs credit." (o) INVESTMENT TAX CREDIT.—

(1) Section 46 (relating to amount of investment tax credit) is amended by striking out subsections (a) and (b) and inserting in lieu thereof the following:

26 USC 46.

Ante, p. 827.

"(a) AMOUNT OF INVESTMENT CREDIT.—For purposes of section 38,

the amount of the investment credit determined under this section for any taxable year shall be an amount equal to the sum of the following percentages of the qualified investment.(as determined under subsections (c) and (d)): "(1) the regular percentage, "(2) in the case of energy property, the energy percentage, and "(3) in the case of that portion of the basis of any property which is attributable to qualified rehabilitation expenditures, the rehabilitation p e r c e n t ^ e. "(b) DETERMINATION OF PERCENTAGES.—For purposes of subsection (a)"(1) REGULAR PERCENTAGE.—The regular percentage is 10 percent. "(2) ENERGY PERCENTAGE.—

"(A) IN GENERAL.—The energy percentage shall be determined in accordance with the following table: <\ -' "Column A—Description

Column B— Percentage

In the case of:

The energy percentage is:

(i) GENERAL RULE.—Property not described

10 percent

Column C—Period For the period: Beginning on:

And ending on:

Oct. 1, 1978

Dec. 31, 1982

Oct. 1, 1978

Dec. 31, 1979

Jan. 1, 1980

Dec. 31, 1985

Jan. 1, 1980

Dec. 31.1985

Jan. 1, 1980

Dec. 31, 1985

(v) QUALIFIED INTERCTTY BUSES.—Property 10 percent

Jan. 1, 1980

Dec. 31, 1985

described in section 48(l)(2)(A)(ix). (vi) BiOMASS PROPERTY.—Property described 10 percent in section 48(1)(15).

Oct. 1, 1978

Dec. 31, 1985

(vii) CHLOR-ALKAU ELECTROLYTIC CELLS.—

Jan. 1, 1980

Dec. 31, 1982

in any of the following provisions of this column, (ii) SOLAR WIKD, OR GEOTHERMAL PROPER- A. 10 percent

TY.—Property described in 48(l)(2)(A)(ii) or 48(l)(3)(A)(vii).

section B. 15 percent

(iii) OCEAN THERMAL PROPERTY.—Property 15 percent

described in section 48(l)(3)(AXbc). (iv) QUALIFIED HYDROELECTRIC GENERATING U percent

PROPERTY.—Property described in section 48(l)(2)(A)(vii).

10 percent

Property described in section 48(IX5XM). "(B) PERIODS FOR WHICH PERCENTAGE NOT SPECIFIED.—In "Kiii

the case of any energy property, the energy percentage shall be zero for any period for which an energy percentage is not specified for such property under subparagraph (A) (as modified by subparagraphs (C) and (D)). "(C) LONGER PERIOD FOR CERTAIN LONG-TERM PROJECTS.—

For the purpose of applying the energy percentage con-

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 PUBLIC LAW 98-369—JULY 18, 1984 "

'. • x^sy ^^

^,. 5

tained in clause (i) of subparagraph (A) with respect to property which is part of a project with a normal construction period of 2 years or more (within the meaning of subsection (d)(2)(A)(i)), 'December 31, 1990' shall be substituted for 'December 31, 1982' if— "(i) before January 1, 1983, all engineering studies in connection with the commencement of the construction of the project have been completed and all environmental and construction permits required under Federal, State, or local law in connection with the commencement of the construction of the project have been applied for, and "(ii) before January 1, 1986, the taxpayer has entered into binding contracts for the acquisition, construction, reconstruction, or erection of equipment specially designed for the project and the aggregate cost to the taxpayer of that equipment is at least 50 percent of the reasonably estimated cost for all such equipment which is to be placed in service as part of the project upon its completion.

98 STAT. 835

 * « jc-

"(D) LONGER PERIOD FOR CERTAIN HYDROELECTRIC GENERATING PROPERTY.—If an application has been docketed by

^

the Federal Energy Regulatory Commission before January 1, 1986, with respect to the installation of any qualified hydroelectric generating property, for purposes of applying the energy percentage contained in clause (iv) of subparagraph (A) with respect to such property, 'December 31, 1988' shall be substituted for 'December 31, 1985'. "(3) SPECIAL RULE FOR CERTAIN ENERGY PROPERTY.—The regular percentage shall not apply to any energy property which, but for section 48(1)(1), would not be section 38 property. In the Ante, p. 827. case of any qualified hydroelectric generating property which is a fish passageway, the preceding sentence shall not apply to any period after 1979 for which the energy percentage for such property is greater than zero.

"(4) REHABILITATION PERCENTAGE.— "(A) IN GENERAL.— "In the case of qualified j; rehabilitation ext'JS'iiX 4,» penditures with respect to a: 30-year building 40-year building -f:';?"? Certified historic structure

The rehabilitation percentage is: 15 20 25.

"(B) REGULAR AND ENERGY PERCENTAGES NOT TO APPLY.—

" ^ ' 50

The regular percentages and the energy percentages shall not apply to that portion of the basis of any property which is attributable to qualified rehabilitation expenditures. "(C) DEFINITIONS.—For purpose of this paragraph— "(i) 30-YEAR BUILDING.—The term '30-year building' means a qualified rehabilitated building other than a 40-year building and other than a certified historic structure. "(ii) 40-YEAR BUILDING.—The term '40-year building' means a qualified rehabilitated building (other than a certified historic structure) which would meet the requirements of section 48(g)(1)(B) if '40' were substituted

'

-

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Page:United States Statutes at Large Volume 98 Part 1.djvu/884

 98 STAT. 836

PUBLIC LAW 98-369—JULY 18, 1984 -u fj.. w< ^.

for '30' each place it appears in subparagraph (B) thereof. "(iii) CERTIFIED HISTORIC STRUCTURE.—The term 'cer!,-?', tified historic structure' means a quaUfied rehabilitated building which meets the requirements of section 48(g)(3)." 26 USC 46. (2) Subclause (II) of section 46(c)(8)(F)(ii) is amended by striking out "section 46(a)(2)(C)" and inserting in lieu thereof "subsection (b)(2)". (3)(A) Paragraph (1) of section 46(e) is amended— (i) by striking out "and the $25,000 amount specified under subparagraphs (A) and (B) of subsection (a)(3)", and ^ (ii) by striking out "such items" and inserting in lieu thereof "such qualified investment". (B) Paragraph (2) of section 46(e) is amended by striking out "the items described therein" and inserting in lieu thereof "qualified investment". (4)(A) Paragraphs (1) and (2) of section 46(f) are each amended " by striking out "no credit shall be allowed by section 38" and inserting in lieu thereof "no credit determined under subsection (a) shall be allowed by section 38". (B) Paragraphs (1) and (2) of section 46(1) are each amended by striking out "the credit allowable by section 38" each place it appears and inserting in lieu thereof "the credit determined under subsection (a) and allowable by section 38". ,jj (C) Subparagraph (B) of section 46(f)(4) is amended by striking out "the credit allowed by section 38" and inserting in lieu thereof "the credit determined under subsection (a) and allowed by section 38". ii- .u,&ii.k (5) Paragraph (8) of section 46(f) is amended— (A) by striking out "the credit allowable under section 38" each place it appears and inserting in lieu thereof "the credit determined under subsection (a) and allowable under section 38", and (B) by striking out "(within the meaning of subsection (a)(7)(C))" and inserting in lieu thereof "(within the meaning of the first sentence of subsection (c)(3)(B))". (6) Paragraph (2) of section 46(g) is amended by striking out "the limitation of subsection (a)(3)" and inserting in lieu thereof "the limitation of section 38(c)". .;.: C^) Paragraph (1) of section 46(h) is amended— V (A) by striking out "the credit allowable to the organization under section 38" and inserting in lieu thereof "the credit determined under subsection (a) and allowable to the organization under section 38", and (B) by striking out "the limitation contained in subsection (a)(3)" and inserting in lieu thereof "the limitation contained in section 38(c)". 26 USC 47. (8) Paragraphs (5) and (6) of section 47(a) are each amended by _, striking out "under section 46(b)" and inserting in lieu thereof "under section 39". (9) Subsection (c) of section 47 is amended by striking out "subpart A" and inserting in lieu thereof "subpart A, B, or D". 26 USC 48. (10) Subparagraph (B) of section 48(c)(3) is amended by striking out "section 46(b)" and inserting in lieu thereof "section 39".

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Page:United States Statutes at Large Volume 98 Part 1.djvu/885

 PUBLIC LAW 98-369—JULY 18, 1984

^'

98 STAT. 837

(11) Subparagraph (B) of section 48(d)(1) is amended by strik- 26 USC 48. ing out "section 46(a)(6)" and inserting in lieu thereof ' section 38(c)(3)(B)". (12) Subsection (f) of section 48 is amended— (A) by adding "and" at the end of paragraph (1), (B) striking out ", and" at the end of paragraph (2) and inserting in lieu thereof a period, and (C) by striking out paragraph (3). (13) Paragraph (1) of section 48(1) is amended by striking out "section 46(a)(2)(C)" and inserting in lieu thereof "section 46(b)(2)". (14) Subsection (m) of section 48 is amended by striking out "subsection (a)(2)" and inserting in lieu thereof "subsection (b)". (15) Subsection (n) of section 48 (relating to requirements for allowance of employee plan percentage) is hereby repealed; except that paragraph (4) of section 48(n) of the Internal Revenue Code of 1954 (as in effect before its repeal by this paragraph) shall continue to apply in the case of any recapture under section 47(f) of such Code of a credit allowable for a taxable year beginning before January 1, 1984. (16) Subsection (o) of section 48 (defining certain credits) is amended by striking out paragraphs (3), (4), (5), (6), and (7) and by redesignating paragraph (8) as paragraph (3). (17) Subsection (q) of section 48 is amended— (A) by striking out "section 46(a)(2)" each place it appears and inserting in lieu thereof "section 46(a)", and (B) by striking out "section 46(a)(2)(B)" each place it appears and inserting in lieu thereof "section 46(b)(1)". (18) Subsection (r) of section 48 is amended by striking out Ante, p. 635. "section 381(c)(23)" and inserting in lieu thereof "section 381(c)(26)". (p) TARGETED JOBS CREDIT.—

(1) Subsection (a) of section 51 (relating to amount of targeted jobs credit) is amended to read as follows:

26 USC 51.

"(a) DETERMINATION OF AMOUNT.—For purposes of section 38, the

amount of the targeted jobs credit determined under this section for the taxable year shall be the sum of— "(1) 50 percent of the qualified first-year wages for such year, and "(2) 25 percent of the qualified second-year wages for such year." (2) Subsection (g) of section 51 is amended by striking out "the credit provided by section 44B" and inserting in lieu thereof "the targeted jobs credit determined under this subpart". (3) Section 51 is amended by adding at the end thereof the following new subsection: "(j) ELECTION TO HAVE TARGETED JOBS CREDIT NOT APPLY.—

"(1) IN GENERAL.—A taxpayer may elect to have this section not apply for any taxable year. "(2) TIME FOR MAKING ELECTION.—An election under paragraph (1) for any taxable year may be made (or revoked) at any time before the expiration of the 3-year period beginning on the last date prescribed by law for filing the return for such taxable year (determined without regard to extensions). "(3) MANNER OF MAKING ELECTION.—An election under paragraph (1) (or revocation thereof) shall be made in such manner as the Secretary may by regulations prescribe."

'- " - " ^ ^

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Page:United States Statutes at Large Volume 98 Part 1.djvu/886

 98 STAT. 838 26 USC 52.

Repeal. 26 USC 53.

PUBLIC LAW 98-369—JULY 18, 1984 (4) Subsection (a) of section 52 is amended by striking out "the credit (if any) allowable by section 44B to each such member" and inserting in lieu thereof "the credit (if any) determined under section 51(a) with respect to each such member". (5) Subsection (b) of section 52 is amended by striking out "the fen credit (if any) allowable by section 44B" and inserting in lieu thereof "the credit (if any) determined under section 51(a)". (6) Subsection (c) of section 52 is amended by striking out "credit shall be allowed under section 44B" and inserting in lieu thereof "credit shall be allowed under section 38 for any targeted jobs credit determined under this subpart". (7) Paragraph (2) of section 52(d) is amended by striking out ", subject to section 53, a credit under section 44B" and inserting in lieu thereof ", subject to section 38(c), a credit under section 38(a)". (8) Section 53 (relating to limitation based on amount of tax) is hereby repealed. (9) The table of sections for old subpart D of part IV of subchapter A of chapter 1 is amended by striking out the item relating to section 53. (q) SECTION 55.—

26 USC 55.

,,,:

(1) Paragraph ^ (1) of section 55(c) (relating to credits) is amended— (A) by striking out "subpart A of part IV" and inserting (B) by striking out "section 33(a)" each place it appears and inserting in lieu thereof "section 27(a)". (2) Clause (i) of section 55(c)(2)(B) is amended by striking out x\m q Mwi"section 33(a)" and inserting in lieu thereof "section 27(a)". (3) Paragraph (3) of section 55(c) is amended to read as follows: "(3) CARRYOVER AND CARRYBACK OF CERTAIN CREDITS.—In the
 * i iB««5c in lieu thereof "subpart A, B, or D of part IV", and

case of any tsixable year for which a tax is imposed by this ..In 'WSm li * section, for purposes of determining the amount of any carryover or carryback to any other taxable year of any credit Ante, p. 826. allowable under section 23, 30, or 38, the amount of the limitaAnte, p. 827. tion Under section 25, 30(g), or 38(c) (as the case may be) shall be deemed to be— jf "(A) the amount of such limitation for such taxable year (determined without regard to this paragraph), reduced (but ^ dm.m J not below zero) by "(B) the amount of the tax imposed by this section for the £,*f i', taxable year, reduced by— 1,9, "(i) the amount of the credit allowable under section Ante, p. 826. 27(a), ^fit;,•< "(ii) in the case of the limitation under section 30(g), the amount of such tax taken into account under this subparagraph with respect to the limitation under seci!Oi j'Ji* tion 25, and "(iii) in the case of the limitation under section 38(c), the amount of such tax taken into account under this subparagraph with respect to limitations under sections 25 and 30(g)." (4) Paragraph (2) of section 55(f) is amended by striking out "allowable under subpart A of part IV of this subchapter (other -iy. than under sections 31, 39, and 43)" and inserting in lieu thereof »r5 "allowable under subparts A, B, and D of part IV of this subchapter".

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Page:United States Statutes at Large Volume 98 Part 1.djvu/887

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 839

(r) TECHNICAL AND CONFORMING AMENDMENTS TO OTHER PROVI-

SIONS.— (1) SECTION 56.—

(A) Subsection (c) of section 56 (defining regular tax deduction) is amended— (i) by striking out "subpart A of part IV other than sections 39 and 44G" and inserting in lieu thereof "subparts A, B, and D of part IV", and (ii) by amending the last sentence to read as follows: "For purposes of the preceding sentence, the amount of the credit determined under section 38 for any taxable year shall be determined without regard to the employee stock ownership credit determined under section •" • 41." (B) Subparagraph (A) of section 56(e)(l) is amended by striking out clauses (i), (ii), (iii), and (iv) and inserting in lieu >' ' thereof the following: "(i) section 27 (relating to foreign tax credit), and y "(ii) section 38 (relating to general business credit), exceed". ' (2) SECTION 86.—Paragraph (1) of section 86(f) (relating to treatment as pension or annuity for certain purposes) is amended by striking out "section 43(c)(2)" and inserting in lieu thereof "section 32(c)(2)". (3) SECTION 87.—Section 87 (relating to alcohol fuel credit included in income) is amended to read as follows: "SEC. 87. ALCOHOL FUEL CREDIT. "Gross income includes the amount of the alcohol fuel credit determined with respect to the taxpayer for the taxable year under section 40(a)." (4) SECTION I03.—Clause (iv) of section 103(b)(6)(F) (relating to certain capital expenditures not taken into account) is amended by striking out "section 44F(b)(2)(A)" and inserting in lieu thereof "section 30(b)(2)(A)". (5) SECTION 108.—Subparagraph (B) of section 108(b)(2) (relating to reduction of tax attributes in title 11 case or insolvency) is "' amended to read as follows:

26 USC 56.

Ante, p. 827. Ante, p. 826.

Ante, p. 826. Pos^, p. 1158.

26 USC 87.

Ante, p. 832. 26 USC 103.

26 USC 108. 11 USC 101 et
 * ^9-

"(B) RESEARCH CREDIT AND GENERAL BUSINESS CREDIT.—

"l P ^-j,

Any carryover to or from the taxable year of a discharge of an amount for purposes of determining the amount allowable as a credit under— "(i) section 30 (relating to credit for increasing re- Ante, p. 826. search activities), or "(ii) section 38 (relating to general business credit). Ante, p. 827. For purposes of this subparagraph, there shall not be taken into account any portion of a carryover which is attributable to the employee stock ownership credit determined under section 41." Ante, p. 826. (6) SECTION 129.—

.. •'

(A) Paragraph (2) of section 129(b) (relating to earned 26 USC 129. income limitation) is amended by striking out "section 44A(e)(2)" and inserting in lieu thereof "section 21(d)(2)". (B) Paragraph (1) of section 129(e) (defining dependent care assistance) is amended by striking out "section 44A(c)(2)" and inserting in lieu thereof "section 21(b)(2)".

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Page:United States Statutes at Large Volume 98 Part 1.djvu/888

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 840 26use 129.

./Of?'

(C) Paragraph (2) of section 129(e) (defining earned income) is amended by striking out "section 43(c)(2)" and inserting in lieu thereof "section 32(c)(2)". (7) SECTION 168.—

26 USC 168. asd.

.dKh.q.^-^i^ K

.is'J'..q.fetft

•S 081J 9S;

Ji&*'

(A) Clause (i) of section 168(i)(l)(D), as added by section 208(a) of the Tax Equity and Fiscal Responsibility Act of 1982, is amended by striking out "subpart A of part IV" and inserting in lieu thereof "subparts A, B, and D of part IV". (B) Clause (iii) of section 168(i)(l)(D), as added by section 208(a) of the Tax Equity and Fiscal Responsibility Act of 1982, is amended by striking out "under the last sentence of section 53(a)" and inserting in lieu thereof "under section 25(b)(2)". (C) Subparagraph (A) of section 168(i)(4), as added by section 208(a) of the Tax Equity and Fiscal Responsibility Act of 1982, is amended by striking out "subpart A of part IV of subchapter A of this chapter" and inserting in lieu thereof "section 38". (D) Clause (i) of section 168(i)(l)(D), as added by section 20903) of the Tax Equity and Fiscal Responsibility Act of 1982, is amended by striking out "subpart A of part IV" and inserting in lieu thereof "subparts A, B, and D of part IV". (E) Clause (iii) of section 168(i)(l)(D), as added by section 2090b) of the Tax Equity and Fiscal Responsibility Act of 1982, is amended by striking out "under the last sentence of section 53(a)" and inserting in lieu thereof "under section 250b)(2)". (8) SECTION I 9 6. —

26 USC 196.

(A) Section 196 (relating to deduction for certain unused investment credits) is amended to read as follows: "SEC. 196. DEDUCTION FOR CERTAIN UNUSED BUSINESS CREDITS.

Ante, p. 827.

Ante, p. 828.

•&> q 7*:f q Ante, p. 834. Ante, p. 837. Ante, p. 832.

"(a) ALLOWANCE OF DEDUCTION.—If any portion of the qualified business credits determined for any taxable year has not, after the application of section 38(c), been allowed to the taxpayer as a credit under section 38 for any taxable year, an amount equal to the credit not so allowed shall be allowed to the taxpayer as a deduction for the first taxable year following the last taxable year for which such Credit could, under section 39, have been allowed as a credit. "Ob) TAXPAYER'S DYING OR CEASING TO EXIST.—If a taxpayer dies or ceases to exist before the first taxable year following the last taxable year for which the qualified business credits could, under section 39, have been allowed as a credit, the amount described in subsection (a) (or the proper portion thereof) shall, under regulations prescribed by the Secretary, be allowed to the taxpayer as a deduction for the taxable year in which such death or cessation occurs. "(c) QUALIFIED BUSINESS CREDITS.—For purposes of this section, the term 'qualified business credits' means— "(1) the investment credit determined under section 46(a) (but only to the extent attributable to property the basis of which is reduced by section 48(q)), r "(2) the targeted jobs credit determined under section 51(a), and "(3) the alcohol fuels credit determined under section 40(a). "(d) SPECIAL RULE FOR INVESTMENT TAX CREDIT.—In the case of the investment credit determined under section 46(a) (other than a credit to which section 48(q)(3) applies), subsection (a) shall be

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Page:United States Statutes at Large Volume 98 Part 1.djvu/889

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 841

applied by substituting 'an amount equal to 50 percent of for 'an amount equal to'." (B) The table of sections for part VI of subchapter B of chapter 1 is amended by striking out the item relating to section 196 and inserting in lieu thereof: "Sec. 196. Deduction for certain unused business credits."

r }

(9) SECTION 213.—Subsection (e) of section 213 (relating to 26 USC 213. exclusion of amounts allowed for care of certain dependents) is amended by striking out "section 44A" and inserting in lieu thereof "section 21".

a

(10) SECTION 280C.—

^

(A) Section 280C (relating to certain expenses for which 26 USC 28oe. credits are allowable) is amended by striking out subsection (a) and by redesignating subsections (b) and (c) as subsections (a) and (b), respectively. (B) Subsection (a) of section 280C (as so redesignated) is ^' '^^ '•' amended— (i) by striking out the first sentence and inserting in lieu thereof the following: "No deduction shall be allowed for that portion of the wages or salaries paid or incurred for the taxable year which is equal to the amount of the credit determined for the taxable year under section 51(a).", and Ante, p. 837. (ii) by striking out "SECTION 44B CREDIT" in the

li lij <

subsection heading and inserting in lieu thereof "TAR-

GETED J O B S C R E D I T ".

(C) Subsection (b) of section 280C (as so redesignated) is amended by striking out "44H" each place it appears and inserting in lieu thereof "29". (D) Paragraph (3) of section 280C(b) (as so redesignated) is amended— (i) by striking out "section 44F(f)(5)" and inserting in ,j..,j. lieu thereof "section 30(fK5)", (ii) by striking out "section 44F(fKlXB)" and inserting in lieu thereof "section 30(f)(1)(B)", (iii) by striking out "section 44F(f)(l)" and inserting in lieu thereof "section 30(f)(1)". (11) SECTION 381.—Subsection (c) of section 381 is amended— (A) by striking out paragraphs (23), (24), (26), (27), and (30), (B) by redesignating paragraphs (25), (28), and (29) as paragraphs (23), (24), and (25), respectively, - #j' (C) by striking out "44F" each place it appears in paragraph (25) (as so redesignated) and inserting in lieu thereof "30", and (D) by adding at the end thereof the following new paragraph: "(26) CREDIT LENDER SECTION 38.—The acquiring corporation shall take into account (to the extent proper to carry out the purposes of this section and section 38, and under such regulations as may be prescribed by the Secretary) the items required to be taken into account for purposes of section 38 in respect of the distributor or transferor corporation." (12) SECTION 383.— (A) Section 383 (as in effect on the day before the date of the enactment of the Tax Reform Act of 1976) is amended—

,:,.; < . 26 USC 381.

Ante, p. 827.

26 USC 383. 26 USC 1 et seq.

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Page:United States Statutes at Large Volume 98 Part 1.djvu/890

 98 STAT. 842

PUBLIC LAW 98-369—JULY 18, 1984 us lol "m;

(i) by striking out "with respect to any unused investment credit" and all that follows and inserting in lieu 1o 3 1' thereof the following: "with respect to any unused <>j sfi jpi: business credit of the corporation which can otherwise Ante, p. 828. be Carried forward under section 39, to any unused credit of the corporation which could otherwise be Ante, p. 826. Carried forward under section 30(g)(2), to any excess ^*^' foreign taxes of the corporation which could otherwise be carried forward under section 904(c), and to any net carried forward under section 1212.", and (ii) by striking out the section heading and inserting 0(^>S;feU «; -f- J" • in lieu thereof the following: "SEC. 383. SPECIAL LIMITATIONS ON UNUSED BUSINESS CREDITS, RESEARCH CREDITS, FOREIGN TAXES, AND CAPITAL LOSSES." 26 USC 383. ^ (|5j_^^ (B) Section 383 (as amended by the Tax Reform Act of 1976) is amended— .:..(i) by striking out "with respect to any unused investment credit" and all that follows and inserting in lieu thereof the following: "with respect to any unused business credit of the corporation under section 39, to any unused credit of the corporation under section ^p;, . ' *''' ' 30(g)(2), to any excess foreign taxes of the corporation ' ^ '* " under section 904(c), and to any net capital loss of the corporation under section 1212.', and (ii) by striking out the section heading and inserting in lieu thereof the following: "SEC. 383. SPECIAL LIMITATIONS ON UNUSED BUSINESS CREDITS, RESEARCH CREDITS, FOREIGN TAXES, AND CAPITAL LOSSES." SI 'bf ' (C) The table of sections for part V of subchapter C of chapter 1 is amended by striking out the item relating to section 383 and inserting in lieu thereof the following: B^
 * ,; J a.,-;. capital loss of the corporation which can otherwise be

26 USC 401. 1^ 26 USC 404.

"Sec. 383. Special limitations on unused business credits, research credits, foreign taxes, and capital losses."

(13) Paragraph (21) of section 401(a) is amended by striking out "allowable—" and all that follows and inserting in lieu thereof "allowable under section 41 if the employer made the transfer described in section 41(c)(1)(B)." (14) SECTION 404.—Subsection (i) of section 404 (relating to deductibility of unused portions of employee stock ownership credit) is amended to read as follows:

"(i) DEDUCTIBILITY OF UNUSED PORTIONS OF EMPLOYEE STOCK OWNERSHIP CREDIT.— "(1) UNUSED CREDIT CARRYOVERS.—If any portion of the em-

Ante, p. 826. Ante, p. 827. Tr „ „ „t ^Q . Ante, p. 828.

^gi. 5

f

ployee stock ownership credit determined under section 41 for any taxable year has not, after the application of section 38(c), A^ been allowed under section 38 for any taxable year, such portion shall be allowed as a deduction (without regard to any limitations provided under this section) for the last taxable year to which such portion could have been allowed as a credit under section 39. "(2) REDUCTIONS IN CREDIT.—There shall be allowed as a deduction (subject to the limitations provided under this section) an amount equal to any reduction of the credit allowed under section 41 resulting from a final determination of such credit to

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Page:United States Statutes at Large Volume 98 Part 1.djvu/891

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 843

the extent such reduction is not taken into account under section 41(c)(3)." Ante, p. 826. (15) SECTION 409.—

(A) Section 409 (relating to qualifications for tax credit employee stock ownership plans), as redesignated by section 491 of this Act, is amended by striking out "44G" each place it appears in subsections (b), (g), (i), (m), and (n) and inserting in lieu thereof "41". ,;,^{ (B) Paragraph (1) of section 409(b), as so redesignated, is amended by striking out "48(n)(l)(A) or". ^,^..(C) Subsection (g) of section 409, as so redesignated, is amended by adding at the end thereof the following new sentence: "For purposes of the preceding sentence, the references to section 48(n)(l) and the employee plan credit, shall refer to such section and credit as in effect before the enactment of the Tax Reform Act of 1984." (D) Subparagraph (A) of section 409(i)(l), as so redesignated, is amended by striking out "48(n)(l) or". (E) Subsection (k) of section 409, as so redesignated, is Ly.; amended by adding at the end thereof the following new sentence: "For' purposes of this subsection, the reference to the matching employee plan credit shall refer to such credit as in effect before the enactment of the Tax Reform Act of 1984." (16) SECTION 527 (g)(i).—Paragraph (1) of section 527(g) (relating to treatment of newsletter funds) is amended by striking out "section 41(c)(2)" and inserting in lieu thereof "section 24(c)(2)". r (17) SECTION 642 (a)(2).—Paragraph (2) of section 642(a) (relat^ ing to credit for political contributions) is amended by striking out "section 41" and inserting in lieu thereof "section 24'. (18) SECTION 6 9 1 (b).—Subsection (b) of section 691 (relating to allowance of deductions and credit) is amended by striking out "section 33" each place it appears and inserting in lieu thereof "section 27". (19) SECTIONS 874(a) AND 882(C)(2).—Sections 874(a) and -: 882(c)(2) are each amended— t (A) by striking out "32" and inserting in lieu thereof V "33", and (B) by striking out "section 39" and inserting in lieu w* thereof "section 34", t (20) SECTION 9 0 1 (a).—Subsection (a) of section 901 (relating to allowance of foreign tax credit) is amended by striking out the last sentence and inserting in lieu thereof the following: "The credit shall not be allowed against any tax treated as a tax not 5 imposed by this chapter under section 25(b)." (21) SECTION 904 (g).—Subsection (g) of section 904 (relating to limitation on foreign tax credit) is amended to read as follows:
 * (9;j

Post, p. 852. Ante, p. 848.

J -C -. ' i ^^

26 USC 527. 26 USC 642. 26 USC 691.

26 USC 874,882. 26 USC 90i.

Ante, p. 821. 26 USC 904.

"(g) COORDINATION WITH NONREFUNDABLE PERSONAL CREDITS.—In

the case of an individual, for purposes of subsection (a), the tax against which the credit is taken is such tax reduced by the sum of si r?J^jif?\ the credits allowable under subpart A of part IV of subchapter A of this chapter." Ante, p. 826. (22) SECTION 936.— (A) Clause (i)(I)(a) of section 936(h)(5)(C) is amended by 26 USC 936. striking out "section 44F(b)" and inserting in lieu thereof ^ "section 30(b)". (B) Clause (i)(IVXc) of section 936(h)(5)(C) is amended—

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Page:United States Statutes at Large Volume 98 Part 1.djvu/892

 98 STAT. 844

PUBLIC LAW 98-369—JULY 18, 1984 lebao i

(i) by striking out "section 44F" and inserting in lieu thereof "section 30", and (ii) by striking out "section 44F(f)" and inserting in lieu thereof "section 30(f)". 26use 1016. ^23) SECTION I0i6(a) (21).—Paragraph (21) of section 1016(a) ' 4 -(relating to adjustments to basis) is amended— (A) by striking out "section 44C(e)" and inserting in lieu thereof "section 23(e)", and '-' (B) by striking out "section 44C" and inserting in lieu thereof "section 23". (24) SECTION 1033(g)(3)(A).—Subparagraph (A) of section 26 USC 1033. 1033(g)(3) (relating to election to treat outdoor advertising displays as real property) is amended by striking out "the credit ' ' allowed by section 38 (relating to investment in certain depreciable property)" and inserting in lieu thereof "the investment .-'.J.'sink credit determined under section 46(a)". 26 USC 1351. (25) SECTION 1351 (i).—Subsection (i) of section 1351 (relating ^o adjustments for succeeding years) is amended— (A) by striking out "section 33" and inserting in lieu thereof "section 27", and (B) by striking out "section 38 (relating to investment ^, credit)" and inserting in lieu thereof "section 38 (relating to general business credit)". 26 USC 1366. (26) SECTION 1366 (f).—Paragraph (1) of section 1366(f) (relating to special rules) is amended by striking out "section 39" each place it appears and inserting in lieu thereof "section 34". 26 USC 1374. (27) SECTION 1374 (b).—Subsection (b) of section 1374 (relating to amount of tax imposed on certain capital gains) is amended by striking out "section 39" and inserting in lieu thereof "section 34". 26 USC 1375. (28) SECTION 1375 (c).—Paragraph (1) of section 1375(c) (relating to disallowance of credit) is amended by striking out "section 39" and inserting in lieu thereof "section 34". (29) SECTION 1451.— 26 USC 1451. (A) Chapter 3 (relating to withholding of tax on nonresi26 USC prec. iGGiK dent aliens and foreign corporations and tax-free covenant ^^^^bonds) is amended by striking out subchapter B and by redesignating subchapter C as subchapter B. (B) The table of subchapters for chapter 3 is amended by 0^ gij V: striking out the items relating to subchapters B and C and inserting in lieu thereof the following: MS I Mmis.

"SUBCHAPTER B. Application of withholding provisions."

26 USC prec. 1441

(C) The heading of chapter 3 is amended by striking o u t "AND TAX-FREE COVENANT BONDS". (D) The table of chapters for subtitle A is amended by striking out "and tax-free covenant bonds" in the item relating to chapter 3. 26 USC 12. (E) Section 12 is amended by striking out paragraph (6) and by redesignating paragraphs (7) and (8) as paragraphs i. (6) and (7), respectively. 26 USC 164. (F) Subsection (f) of section 164 (as in effect before its 97 Stat. 65. redesignation by the Social Security Amendments of 1983) 42 USC 1305 is amended by striking out paragraph (1) and by redesignatnote. ing paragraphs (2) and (3) as paragraphs (1) and (2), respec—t«*{7::i tively.

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Page:United States Statutes at Large Volume 98 Part 1.djvu/893

 PUBLIC LAW 98-369—JULY 18, 1984 (G) Subsection (a) of section 1441 is amended by striking out "except in the cases provided for in section 1451 and". (H) Paragraph (3) of section 1441(c) is amended by striking out "section 1451" and inserting in lieu thereof "section 1451 (as in effect before its repeal by the Tax Reform Act of 1984)". (I) Subsection (a) of section 1442 is amended— (i) by striking out "or section 1451", and (ii) by striking out "; except that, in the case of interest described in section 1451 (relating to tax-free covenant bonds), the deduction and withholding shall be at the rate specified therein". (J) Paragraph (2) of section 6049(b) (relating to amounts not treated as interest) is amended— (i) by adding "and" at the end of subparagraph (C), (ii) by striking out ", and" at the end of subparagraph (D) and inserting in lieu thereof a period, and (iii) by striking out subparagraph (E). (K) Paragraph (16) of section 7701(a) is amended by striking out "1451,". (30) SECTION 350?.—Subsections (b), (c), and (e) of section 3507 (relating to advanced payment of earned income credit) are each amended by striking out "section 43" each place it appears and inserting in lieu thereof "section 32". (31) SECTION 6096 (b).—Subsection (b) of section 6096 (defining income tax liability) is amended by striking out "allowable under sections 33, 37, 38, 40, 41, 42, 44, 44A, 44B, 44C, 44D, 44E, 44F, 44G, and 44H" and inserting in lieu thereof "allowable under part IV of subchapter A of chapter 1 (other than subpart C thereof)". (32) SECTION 6201(a)(4).—Paragraph (4) of section 6201(a) (relating to erroneous credit under section 39 or 43) is amended— (A) by striking out "section 39" and inserting in lieu thereof "section 34", (B) by striking out "section 43" and inserting in lieu thereof "section 32", and (C) by striking out "SECTION 39 OR 43" in the paragraph heading and inserting in lieu thereof "SECTION 32 OR 34". (33) SECTION 6211(b).— (A) Paragraph (1) of section 6211(b) is amended by striking out "without regard to so much of the credit under section 32 as exceeds 2 percent of the interest on obligations described in section 1451" and inserting in lieu thereof "without regard to the credit under section 33". (B) Paragraph (4) of section 6211(b) is amended by striking out "section 39" and inserting in lieu thereof "section 34". (34) SECTION 6213 (h)(3).—Paragraph (3) of section 6213(h) is amended by striking out "section 39" and inserting in lieu thereof "section 32 or 34". (35) SECTION 6362(c)(i).—Paragraph (1) of section 6362(c) (relating to qualified resident tax which is a percentage of the Federal tax) is amended by striking out "sections 31 and 39" and inserting in lieu thereof "sections 31 and 34".

98 STAT. 845 26 USC 1441.

Ante, p. 494. 26 USC 1442.

i ^ 26 USC 6049.

26 USC 7701. 26 USC 3507.

26 USC 6096.

26 USC 6201.

26use62ii.

26 USC 6213. 26 USC 6362.

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Page:United States Statutes at Large Volume 98 Part 1.djvu/894

 98 STAT. 846 26 USC 6401.

PUBLIC LAW 98-369—JULY 18, 1984 (36) SECTION 6401 (b).—Subsection (b) of section 6401 (relating to excessive credits treated as overpayments) is amended to read as follows: "(b) EXCESSIVE CREDITS.—

Ante, p. 825.

"(1) IN GENERAL.—If the amount allowable as credits under subpart C of part IV of subchapter A of chapter 1 (relating to refundable credits) exceeds the tax imposed by subtitle A (reduced by the credits allowable under subparts A, B, and D of such part IV), the amount of such excess shall be considered an overpayment. "(2) SPECIAL RULE FOR CREDIT UNDER SECTION 33.—For pur-

Ante, p. 832.

poses of paragraph (1), any credit allowed under section 33 (relating to withholding of tax on nonresident aliens and on «iv../o '.=. foreign corporations) for any taxable year shall be treated as a credit allowable under subpart C of part IV of subchapter A of chapter 1 only if an election under subsection (g) or (h) of section 6013 is in effect for such taxable year." (37) SECTION 64ii.— 26 USC 6411. (A) So much of subsection (a) of section 6411 as precedes paragraph (2) thereof (relating to tentative carryback and refund adjustments) is amended to read as follows: •'^•--'i'^ '•'• "(a) APPLICATION FOR ADJUSTMENT.—A taxpayer may file an application for a tentative carryback adjustment of the tax for the prior taxable year affected by a net operating loss carryback provided in Ante, p. 828. section 172(b), by a business credit carryback provided in section 39, Ante, p. 826. by a research credit carryback provided in section 30(g)(2) or by a capital loss carryback provided in section 1212(a)(1), from any taxable year. The application shall be verified in the manner prescribed by section 6065 in the case of a return of such taxpayer and shall be filed, on or after the date of filing for the return for the taxable year of the net operating loss, net capital loss, or unused business credit from which the carryback results and within a period of 12 months <m Dai after such taxable year or, with respect to any portion of a research credit carryback or a business credit carryback attributable to a net operating loss carryback or a net capital loss carryback from a subsequent taxable year, within a period of 12 months from the end of such subsequent taxable year (or, with respect to any portion of a business credit carryback attributable to a research credit carryback from a subsequent taxable year within a period of 12 months from the end of such subsequent taxable year), in the manner and form required by regulations prescribed by the Secretary. The applications shall set forth in such detail and with such supporting data .irsdOBii and explanation as such regulations shall require— "(1) The amount of the net operating loss, net capital loss, unused research credit, or unused business credit;". (B) Subsections (b) and (c) of section 6411 are each amended by striking out "unused investment credit, unused work incentive program credit, unused new employee credit, unused research credit, or unused employee stock ownership credit" each place it appears and inserting in lieu "^ ' '- *''; thereof "unused research credit, or unused business credit". 26 USC 6420, --^' (38) SECTIONS 6420(g)(2), ETC.—Sections 6420(g)(2), 6421(i)(3), 6421. and 6427(i)(3) are each amended by striking out "section 39" and Post, p. 1005. inserting in lieu thereof "section 34". 26 USC 6501. (39) SECTION 6501 (p).—Section 6501 is amended by striking
 * ^ out subsection (p) and by redesignating subsection (q) as subsection (p).

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Page:United States Statutes at Large Volume 98 Part 1.djvu/895

 PUBLIC LAW 98-369—JULY 18, 1984 (40) SECTION 65ii(d)(4)(C).—Subparagraph (C) of section 6511(d)(4) (defining credit carryback) is amended to read as follows: "(C) CREDIT CARRYBACK DEFINED.—For purposes of this paragraph, the term 'credit carryback' means any business carryback under section 39 and any research credit carry^ * '' back under section 30(g)(2)." (41) SECTION 7871.—Subparagraph (A) of section 7871(a)(6) is amended by striking out "section 41(c)(4)" and inserting in lieu thereof "section 24(c)(4)". '(42) SECTION 9502 (d).—Paragraph (3) of section 9502(d) (relating to transfers from the Airport and Airway Trust Fund on account of certain section 39 credits) is amended— (A) by striking out "section 39" and inserting in lieu thereof "section 34", and t (B) by striking out "SECTION 39 CREDITS" in the heading and inserting in lieu thereof "SECTION 34 CREDITS". (43) SECTION 9503 (c).—Clause (ii) of section 9503(c)(2)(A) (relating to transfers' from the Highway Trust Fund for certain repayments and credits) is amended by striking out "section 39" and inserting in lieu thereof "section 34". SEC. 475. EFFECTIVE DATES. (a) GENERAL RULE.—The amendments made by this title shall apply to taxable years beginning after December 31, 1983, and to carrybacks from such years. (b) TAX-FREE COVENANT BONDS.—The amendments made by subsections 0) and (r)(29) of section 474 shall not apply with respect to obligations issued before January 1, 1984. (c) CLARIFICATION OF EFFECT OF AMENDMENTS ON INVESTMENT TAX CREDIT.—Nothing in the amendments made by section 474(o) shall be construed as reducing the amount of any credit allowable for qualified investment in taxable years beginning before January 1, 1984.

98 STAT. 847 26use6511.

Ante, p. 828. Ante, p. 826. 97 Stat. 87. 26 USC 7871. 26 USC 9502.

,,j,

,^ ^

26 USC 9503. ,.^ gi j. -,,»{] ^v 26 USC 2i note. 26 USC 33 note. Ante, p. 830. 26 USC 46 note. Ante, p. 830. Mhj-y^bi

^ Subtitle G—Miscellaneous Simplification Provisions SEC. 481. PREFERRED STOCK ELIGIBLE UNDER SECTION 1244. (a) GENERAL RULE.—Subsections (c)(1) and (d)(2) of section 1244 26 USC 1244. (relating to losses on small business stock) are each amended by striking out "common stock" and inserting in lieu thereof "stock. Ob) EFFECTIVE DATE.—The amendment made by subsection (a) 26 USC 1244 shall apply to stock issued after the date of the enactment of this note. Act in taxable years ending after such date. "v^ a ^m\ SEC. 482. MEDICAL CARE DEDUCTION ALLOWED FOR LODGING AWAY FROM HOME IN CERTAIN CASES. (a) IN GENERAL.—Subsection (d) of section 213 (relating to defini- Ante, p. 800. tions for purposes of the deduction for medical, dental, etc., expenses), as amended by section 423(b), is amended by redesignating paragraphs (2), (3), (4), (5), (6), and (7) as paragraphs (3), (4), (5), (6), '' ' ' '• (7), and (8), respectively, and by inserting after paragraph (1) the following new paragraph:

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Page:United States Statutes at Large Volume 98 Part 1.djvu/896

 98 STAT. 848
 * i.:;,:->.^

J

,.,,,

.,,.

PUBLIC LAW 98-369—JULY 18, 1984 "(2) AMOUNTS PAID FOR CERTAIN LODGING AWAY FROM HOME TREATED AS PAID FOR MEDICAL CARE.—Amounts paid for lodging (not lavish or extravagant under the circumstances) while away from home primarily for and essential to medical care referred to in paragraph (1)(A) shall be treated as amounts paid for medical care if— "(A) the medical care referred to in paragraph (1)(A) is provided by a physician in a licensed hospital (or in a medical care facility which is related to, or the equivalent of, a licensed hospital), and "(B) there is no significant element of personal pleasure, recreation, or vacation in the travel away from home. The amount taken into account under the preceding sentence shall not exceed $50 for each night for each individual." (b) TECHNICAL AMENDMENT.—

Ante, p. 847.

(1) Paragraph (7) of section 213(d), as redesignated by subsection (a), is amended by striking out "paragraph (5)" and inserting in lieu thereof "paragraph (6)". Ante, p. 799. (2) Paragraph (6) of section 152(e), as amended by section 423 of this Act, is amended by striking out "section 213(d)(4)" and inserting in lieu thereof "section 213(d)(5)". 26 USC 213 note. (c) EFFECTIVE DATE.—The amendments made by this section shall apply to taxable years beginning after December 31, 1983.

Subtitle H—Repeal of Certain Obsolete Provisions SEC. 491. TERMINATION OF RULES RELATING TO QUALIFIED BOND PURCHASE PLANS AND RETIREMENT BONDS WITH RESPECT TO BONDS ISSUED AFTER DECEMBER 31, 1983. 26 USC 405.

(a) QUALIFIED BOND PURCHASE PLANS.—Section 405 (relating to

26 USC 409.

qualified bond purchase plans) is hereby repealed. (b) RETIREMENT BONDS.—Section 409 (relating to retirement bonds) is hereby repealed. (c) EXISTING BONDS MAY B E ROLLED OVER INTO QUALIFIED E M PLOYER PLANS.—

(1) Subparagraph (A) of section 405(d)(3) (as in effect before its repeal by subsection (a)) is amended to read as follows: "(A) IN GENERAL.—If— .,.., "(i) any qualified bond is redeemed. Jit '^'j: dt i "^ " "(ii) any portion of the excess of the proceeds from such redemption over the basis of such bond is transferred to an individual retirement plan which is mainly, tained for the benefit of the individual redeeming such bond, or to a qualified trust (as defined in section Post, p. 869. 402(a)(5)(D)(iii)) for the benefit of such individual, and "(iii) such transfer is made on or before the 60th day ¥i #A 41 after the individual received the proceeds of such redemption, u > o iSs iv -ism^fl then gross income shall not include the proceeds to the » extent so transferred and the transfer shall be treated as a rollover contribution described in section 408(d)(3)." 26 USC 402. (2) Subsection (e) of section 402 (relating to tax on lump-sum distributions) is amended by adding at the end thereof the following new paragraph:

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Page:United States Statutes at Large Volume 98 Part 1.djvu/897

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 849

"(5) SPECIAL RULE WHERE PORTION OF LUMP-SUM DISTRIBUTION ATTRIBUTABLE TO ROLLOVER OF BOND PURCHASED UNDER QUALI-

FIED BOND PURCHASE PLAN.—If any portion of a lump-sum distribution is attributable to a transfer described in section 405(d)(3)(A)(ii) (as in effect before its repeal by the Tax Reform Act of 1984), paragraphs (1) and (3) of this subsection and Ante, p. 494. paragraph (2) of subsection (a) shall not apply to such portion." (d) TECHNICAL AND CONFORMING AMENDMENTS.—

(1) Paragraph (2) of section 55(f) (defining regular tax) is amended by striking "409(c),". (2) Paragraph (7) of section 62 (defining adjusted gross income) is amended— (A) by striking out "the deductions allowed by section 404 and section 405(c)" and inserting in lieu thereof "the deduction allowed by section 404", and (B) by striking out "ANNUITY, AND BOND PURCHASE" in the heading and inserting in lieu thereof "AND ANNUITY". (3) Paragraph (1) of section 72(o) is amended by striking out "402, 403, and 405" and inserting in lieu thereof "402 and 403". (4) Paragraph (4) of section 72(o) is amended by striking out "408(d)(3), and 409(b)(3)(C)" and inserting in lieu thereof "and 408(d)(3)". (5) Subparagraph (D) of section 172(d)(4) is amended by striking out "or section 405(c)". (6) Paragraph (2) of section 219(d) is amended by striking out "405(d)(3), 408(d)(3), or 409(b)(3)(C)" and inserting in lieu thereof "or 408(d)(3)". (7) Paragraph (1) of section 219(e) is amended by striking out the last sentence. (8) Paragraph (3) of section 219(e) is amended by striking out subparagraph (C), by adding "and" at the end of subparagraph (B) and by redesignating subparagraph (D) as subparagraph (C). (9) Clause (iv) of section 402(a)(5)(D) is amended by striking out subclause (III) and by redesignating subclauses (IV) and (V) as subclauses (III) and (IV), respectively. (10) Clause (i) of section 402(a)(5)(F), as amended by this Act, is amended by striking out ", (II), or (III)" and inserting in lieu thereof "or (II)". (11) Clause (ii) of section 402(a)(5)(F), as amended by this Act, is amended by striking out "(IV) or (V)" and inserting in lieu thereof "(III) or (IV)". (12) The last sentence of section 403(b)(1) is amended by striking out "or 409a))(3)(C)". (13) Subsection (a) of section 406 is amended by striking out ", an annuity plan described in section 403(a), or a bond purchase plan described in section 405(a)" and inserting in lieu thereof "or an annuity plan described in section 403(a)". (14) Paragraph (3) of section 406(a) is amended by striking out ", 403(a), or 405(a)" and inserting in lieu thereof "or 403(a)". (15) Subsection (d) of section 406 is amended— (A) by striking out "sections 404 and 405(c)" and inserting in lieu thereof "section 404", (B) by striking out "annuity, or bond purchase" and inserting in lieu thereof "or annuity", and (C) by striking out "(or section 405(c))" in paragraph (2) thereof.

31-194 0 - 86 - 29: QL. 3 Part 1

26 USC 55. 26 USC 62.

26 USC 72.

26 USC 172. 26 USC 219.

Post, p. 869.

26 USC 403. 26 USC 406.

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Page:United States Statutes at Large Volume 98 Part 1.djvu/898

 98 STAT. 850 26 USC 407.

26 USC 408.

26 USC 412. 26 USC 414.

26 USC 415.

PUBLIC LAW 98-369—JULY 18, 1984 (16) Paragraph (1) of section 407(a) is amended by striking out ", an annuity plan described in section 403(a), or a bond purchase plan described in section 405(a)" and inserting in lieu thereof "or an annuity plan described in section 403(a)". (17) Subparagraph (B) of section 407(a)(1) is amended by striking out ", 403(a), or 405(a)" and inserting in lieu thereof "or 403(a)". (18) Subsection (d) of section 407 is amended— (A) by striking out "sections 404 and 405(c)" and inserting in lieu thereof "section 404", (B) by striking out "annuity, or bond purchase" and inserting in lieu thereof "or annuity", and (C) by striking out "(or section 405(c))" in paragraph (2) thereof. (19) Paragraph (1) of section 408(a) is amended by striking out "403(b)(8), 405(d)(3), or 409(b)(3)(C)" and inserting in lieu thereof "or403a))(8)". (20) Clause (i) of section 408(d)(3)(A) is amended by striking out "or retirement bond". (21) Subparagraph (B) of section 408(d)(3) is amended by striking out ", individual retirement annuity, or a retirement bond" and inserting in lieu thereof "or an individual retirement annuity". (22) Clause (ii) of section 408(d)(3)(D) (relating to partial rollovers) is amended by striking out "bond,". (23) Paragraph (6) of section 408(d) is amended— (A) by striking out ", individual retirement annuity, or retirement bond and inserting in lieu thereof "or an individual retirement annuity", and (B) by striking out ", annuity, or bond" and inserting in lieu thereof "or annuity". (24) Subparagraph (E) of section 408(k)(3) is amended by striking out ", 403(a), or 405(a)" and inserting in lieu thereof "or 403(a)". (25) Paragraph (2) of section 412(a) is amended by striking out "or 405(a)". (26) Subsection (h) of section 414 is amended by striking out "or 405(a)". (27) Subsection (1) of section 414 is amended by striking out "or 405". (28) Paragraph (2) of section 415(a) is amended by striking out subparagraph (D), by striking out "or" at the end of subparagraph (C), by adding "or" at the end of subparagraph (B), and by striking out "405(a),". (29) Subparagraph (A) of section 415(b)(2) is amended by striking out "408(d)(3), and 409(b)(3)(C)" and inserting in lieu thereof "and 408(d)(3)". (30) Subparagraph (B) of section 415(b)(2) is amended by striking out "408(d)(3) and 409(b)(3)(C)" and inserting in lieu thereof "and 408(d)(3)". (31) Paragraph (2) of section 415(c) is amended by striking out "405(d)(3), 408(d)(3), and 4090t))(3)(C)" and inserting in lieu thereof "and 408(d)(3)". (32) Paragraph (1) of section 415(k) is amended by striking out subparagraphs (C) and (H), by redesignating subparagraphs (D), (E), (F), and (G) as subparagraphs (C), (D), (E), and (F), respectively, by striking out, or' at the end of subparagraph (F) (as

I

t2EB? Z. J C

 * ?:;. - <^ii " '•'

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Page:United States Statutes at Large Volume 98 Part 1.djvu/899

 PUBLIC LAW 98-369—JULY 18, 1984 so redesignated) and inserting in lieu thereof a period, and by adding "or" at the end of subparagraph (E) (as so redesignated). (33) Paragraph (2) of section 457(e) is amended by striking out subparagraph (C) and by redesignating subparagraphs (D) and (E) as subparagraphs (C) and (D), respectively. (34) Subsection (e) of section 2039 is amended— (A) by striking out paragraph (3), (B) by striking out ", or" at the end of paragraph (2) and inserting in lieu thereof a period, (C) by adding "or" at the end of paragraph (1), (D) by striking out "405(d)(3), 408(d)(3), or 409(b)(3)(C)" and inserting in lieu thereof "or 408(d)(3)", and (E) by striking out ", annuity, or bond" each place it appears and inserting in lieu thereof "or annuity". (35) Paragraph (5) of section 2517(a) is amended by striking out ", an individual retirement annuity described in section 408(b), or a retirement bond described in section 409(a)" and inserting in lieu tl\ereof "or an individual retirement annuity described in section 408(b)". (36) Paragraph (5) of section 3121(a) is amended by striking out subparagraph (C) and by redesignating subparagraphs (D) through (G) as subparagraphs (C) through (F), respectively. (37) Paragraph (5) of section 3306(b) is amended by striking out subparagraph (C) and by redesignating subparagraphs (D) through (G) as subparagraphs (C) through (F), respectively. (38) Paragraph (12) of section 3401(a) is amended by striking out subparagraph (C) and by redesignating subparagraph (D) as subparagraph (C). (39) Subsection (e) of section 209 of the Social Security Act is amended by inserting "(as in effect before the enactment of the Tax Reform Act of 1984)" after "Internal Revenue Code of 1954" in paragraph (4) thereof. (40) Subsection (a) of section 4972 is amended by striking out the last sentence and inserting in lieu thereof "This section applies only to plans which include a trust described in section 401(a) or which are described in section 403(a)." (41) Subsection (a) of section 4973 is amended— (A) by striking out paragraph (3), (B) by striking out "or" at the end of paragraph (2), (C) by adding "or" at the end of paragraph (1), (D) by striking out ", annuities, or bonds" and inserting in lieu thereof "or annuities", and (E) by striking out ", annuity, or bond" and inserting in lieu thereof "or annuity". (42) Subparagraph (A) of section 49730t))(l) is amended by striking out "408(d)(3), and 409(b)(3)(C)" and inserting in lieu thereof "and 408(d)(3)". (43) The last sentence of section 4973(b) is amended by striking out ", individual retirement annuity, or bond" and inserting in lieu thereof "or the individual retirement annuity". (44) Paragraph (1) of section 4973(c) is amended by striking out ", 408(d)(3)(A)(iii), or 409(b)(3)(C)" and inserting in lieu thereof "or 408(d)(3)(A)(iii)". (45) The last sentence of section 4975(d) is amended by striking out ", individual retirement annuity, or an individual retirement bond (as defined in section 408 or 409)" and inserting in

98 STAT. 851

26 USC 457. 26 USC 2039.

- - '^^ <'^

26 USC 2517.

26 USC 3i2i. 26 USC 3306. 26 USC 3401. 26 USC 409.

26 USC 4972. -

26 USC 4973.

- •' '

26 USC 4975.

'-'

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Page:United States Statutes at Large Volume 98 Part 1.djvu/900

 98 STAT. 852

26 USC 4975.

26 USC 6047. 26 USC 6058. 26 USC 6104. 26 USC 6652. 26 USC 7207. 26 USC 7476.

26 USC 7701.

26 USC 4973.

26 USC 6047.

26 USC 409, 409A. Ante, p. 848. 26 USC 41. Ante, p. 826.

PUBLIC LAW 98-369—JULY 18, 1984 lieu thereof "or an individual retirement annuity (as defined in section 408)". (46) Paragraph (1) of section 4975(e) is amended— (A) by striking out "or 405(a)", (B) by striking out "or a retirement bond described in section 409", (C) by striking out "annuity, or bond" and inserting in lieu thereof "or annuity", and (D) by striking out "account, or bond" and inserting in lieu thereof "or account". (47) Section 6047 is amended by striking out subsection (c) and by redesignating subsections (d), (e), and (0 as subsections (c), (d), and (e), respectively. (48) Subsection (e) of section 6058 is amended by striking out paragraph (2) and by redesignating paragraphs (3) and (4) as paragraphs (2) and (3), respectively. (49) Clause (i) of section 6104(a)(1)(B) is amended by striking out ", 403(a), or 405(a)" and inserting in lieu thereof "or 403(a)". (50) Subsection (f) of section 6652 is amended by striking out "and bond purchase". (51) Section 7207 is amended by striking out "or (c)". (52) Subsection (c) of section 7476 is amended by striking out paragraph (3), by striking out ", or" at the end of paragraph (2) and inserting in lieu thereof a period, and by adding ", or" at the end of paragraph (1). (53) Paragraph (37) of section 7701(a) is amended by striking out subparagraph (C), by striking out ", and" at the end of subparagraph (B) and inserting in lieu thereof a period, and by adding "and" at the end of subparagraph (A). (54) The table of sections of subpart A of part I of subchapter D of chapter 1 is amended by striking out the items relating to sections 405 and 409. (55) The section heading for section 4973 is amended by striking out "CERTAIN INDIVIDUAL RETIREMENT ANNUITIES, AND CERTAIN RETIREMENT BONDS" and inserting in lieu thereof "AND CERTAIN INDIVIDUAL RETIREMENT ANNUITIES". (56) The table of sections for chapter 43 is amended by striking out "certain individual retirement annuities, and certain retirement bonds" in the item relating to section 4973 and inserting in lieu thereof "and certain individual retirement annuities". (57) The section heading for section 6047 is amended by striking out "AND BOND PURCHASE". (58) The table of sections for subpart B of part III of subchapter A of chapter 61 is amended by striking out "and bond purchase" in the item relating to section 6047. (59) The first sentence of section 3107 of title 31, United States Code, is amended by inserting before the period ", as in effect before the enactment of the Tax Reform Act of 1984". (e) SECTION 409A REDESIGNATED AS SECTION 409.— (1) The section heading for section 409A is amended by strikj^g out "SEC. 409A." and inserting in lieu thereof "SEC. 409.". (2) Subsection (c)(l)(A)(i) of old section 44G is amended by striking out "section 409A" and inserting in lieu thereof "section 409".

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 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 853

(3) Paragraph (6) of old section 44G(c) is amended by striking 26 USC 41. out "section 409A(1)" and inserting in lieu thereof "section ^"^e, p. 826. 409(1)". (4) Paragraph (22) of section 401(a) is amended by striking out 26 USC 401. "section 409A" and inserting in lieu thereof "section 409". (5) Paragraph (23) of section 401(a) is amended by striking out "section 409A(h)" each place it appears and inserting in lieu thereof "section 409(h)". (6) Clause (ii) of section 415(c)(6)(B) is amended by striking out 26 USC 415. "section 409A" and inserting in lieu thereof section 409". (7) Paragraph (7) of section 4975(e) is amended— 26 USC 4975. (A) by striking out "section 409A(h)" and inserting in lieu thereof "section 409(h)", (B) by striking out "section 409A(e)(4)" and inserting in lieu thereof "section 409(e)(4)", and (C) by striking out "section 409A(e)" and inserting in lieu thereof "section 409(e)". (8) Paragraph (8) of section 4975(e) is amended by striking out "section 409A(1)" and inserting in lieu thereof "section 409(1)". (9) Paragraphs (1) and (3) of section 6699(a) are each amended 26 USC 6699. by striking out "section 409A" and inserting in lieu thereof "section 409". (10) The table of sections for subpart A of part I of subchapter D of chapter 1 is amended by striking out "Sec. 409A" and inserting in lieu thereof "Sec. 409", (f) EFFECTIVE DATES.—

(1) IN GENERAL.—The amendments and repeals made by sub- 26 USC 55 note, sections (a), (b), and (d) shall apply to obligations issued after December 31, 1983. (2) SUBSECTION (C).—The amendment made by subsection (c) 26 USC 402 note, shall apply to redemptions after the date of the enactment of this Act in taxable years ending after such date. (3) SUBSECTION (e).—The amendments made by subsection (e) 26 USC 41 note. shall take effect on January 1, 1984. (4) BONDS UNDER QUALIFIED BOND PURCHASE PLANS MAY BE 26 USC 405 note. REDEEMED AT ANY TIME.—Notwithstanding—

(A) subparagraph (D) of section 405(b)(1) of the Internal Revenue Code of 1954 (as in effect before its repeal by this section), and (B) the terms of any bond described in subsection O> of t) such section 405, such a bond may be redeemed at any time after the date of the enactment of this Act in the same manner as if the individual redeeming the bond had attained age 59^2. (5) TREATMENT OF TAX IMPOSED UNDER SECTION 409 (c).—For 26 USC 26 note. purposes of section 260t>) of the Internal Revenue Code of 1954 (as amended by this Act), any tax imposed by section 409(c) of such Code (as in effect before its repeal by this section) shall be treated as a tax imposed by section 408(f) of such Code. SEC. 492. REPEAL OF RULES RELATING TO GAINS FROM DISPOSITION OF PROPERTY USED IN FARMING WHERE FARM LOSSES OFFSET NONFARM INCOME. (a) IN GENERAL.—Section 1251 (relating to gain from disposition of 26 USC 1251. property used in farming w h e r e farm losses offset nonfarm income) is hereby repealed. (b) TECHNICAL AND CONFORMING AMENDMENTS.—

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Page:United States Statutes at Large Volume 98 Part 1.djvu/902

 98 STAT. 854 26 USC 170.

PUBLIC LAW 98-369—JULY 18, 1984 (1) SECTION I70.—

(A) The second sentence of section 170(e)(1) (relating to certain contributions of ordinary income and capital gain property) is amended by striking out "1251(c),". (B) Subparagraph (C) of section 170(e)(3) (relating to special rule for certain contributions of inventory and other property) is amended by striking out "1251,". 26 USC 341. (2) SECTION 341.—Paragraph (12) of section 341(e) (relating to nonapplication of section 1245(a)) is amended by striking out "1251(c),". 26 USC 453B. (3) SECTION 453B.—The second sentence of section 453B(d)(2) (relating to liquidations to which section 337 applies) is amended by striking out "1251(c),". 26 USC 751. (4) SECTION 751.—The second sentence of subsection (c) of section 751 (defining unrealized receivables) is amended— (A) by striking out "farm recapture property (as defined in section 1251(e)(l)),", and (B) by striking out "1251(c),". 26 USC 1252. (5) SECTION 1252.—The second sentence of section 1252(a)(1) (relating to gains from disposition of farm land) is amended by striking out ", except that this section shall not apply to the extent section 1251 applies to such gain". (c) CLERICAL AMENDMENT.—The table of sections for part IV of subchapter P of chapter 1 is amended by striking out the item relating to section 1251. 26 USC 170 note. (d) EFFECTIVE DATE.—The amendments made by this section shall apply to taxable years beginning after December 31, 1983.

TITLE V—EMPLOYEE BENEFIT PROVISIONS Subtitle A—Welfare Benefit Plans SEC. 511. TREATMENT OF FUNDED WELFARE BENEFIT PLANS.

(a) GENERAL RULE.—Part I of subchapter D of chapter 1 (relating to pension, profit sharing, stock bonus plans, etc.) is amended by adding at the end thereof the following new subpart:

"Subpart D—Treatment of Welfare Benefit Funds "Sec. 419. Treatment of funded welfare benefit plans. "Sec. 419A. Qualified asset account; limitation on additions to account. 26 USC 419.

"SEC. 419. TREATMENT OF FUNDED WELFARE BENEFIT PLANS.

"(a) GENERAL RULE.—Contributions paid or accrued by an employer to a welfare benefit fund— "(1) shall not be deductible under section 162 or 212, but "(2) if they satisfy the requirements of either of such sections, shall (subject to the limitation of subsection (b)) be deductible under this section for the taxable year in which paid. "(b) LIMITATION.—The amount of the deduction allowable under subsection (a)(2) for any taxable year shall not exceed the welfare benefit fund's qualified cost for the taxable year. "(c) QUALIFIED COST.—For purposes of this section—

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Page:United States Statutes at Large Volume 98 Part 1.djvu/903

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 855

"(1) IN GENERAL.—Except as otherwise provided in this subsection, the term 'qualified cost' means, with respect to any taxable year, the sum of— "(A) the qualified direct cost for such taxable year, and "(B) subject to the limitation of section 419A(b), any Post, p. 856. addition to a qualified asset account for the taxable year. "(2) REDUCTION FOR FUNDS AFTER-TAX INCOME.—In the case of any welfare benefit fund, the qualified cost for any taxable year shall be reduced by such fund's after-tax income for such taxable year. "(3) QUALIFIED DIRECT COST.—

"(A) IN GENERAL.—The term 'qualified direct cost' means, with respect to any taxable year, the aggregate amount (including administrative expenses) which would have been allowable as a deduction to the employer with respect to the benefits provided during the taxable year, if— "(i) such benefits were provided directly by the employer, and "(ii) the employer used the cash receipts and disbursements method of accounting. "(B)

TIME WHEN BENEFITS PROVIDED.—For purposes of

subparagraph (A), a benefit shall be treated as provided when such benefit would be includible in the gross income of the employee if provided directly by the employer (or would be so includible but for any provision of this chapter excluding such benefit from gross income). "(C) 60-MONTH AMORTIZATION OF CHILD CARE FACILITIES.—

"(i) IN GENERAL.—In determining qualified direct costs with respect to any child care facility for purposes of subparagraph (A), in lieu of depreciation the adjusted basis of such facility shall be allowable as a deduction ratably over a period of 60 months beginning with the month in which the facility is placed in service. "(ii) CHILD CARE FACILITY.—The term 'child care facility' means any tangible property which qualifies under regulations prescribed by the Secretary as a child care center primarily for children of employees of the employer; except that such term shall not include any property— "(I) not of a character subject to depreciation; or "(II) located outside the United States. "(4) AFTER-TAX INCOME.—

"(A) IN GENERAL.—The term 'after-tax income' means, with respect to any taxable year, the gross income of the welfare benefit fund reduced by the sum of— "(i) the deductions allowed by this chapter which are directly connected with the production of such gross income, and "(ii) the tax imposed by this chapter on the fund for the taxable year. "(B) TREATMENT OF CERTAIN AMOUNTS.—In determining the gross income of any welfare benefit fund— "(i) contributions and other amounts received from employees shall be taken into account, but taken into account.
 * (ii) contributions from the employer shall not be

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Page:United States Statutes at Large Volume 98 Part 1.djvu/904

 98 STAT. 856

PUBLIC LAW 98-369—JULY 18, 1984 "(5) ITEM ONLY TAKEN INTO ACCOUNT ONCE.—No item may be taken into account more than once in determining the qualified cost of any welfare benefit fund. "(d) CARRYOVER OF EXCESS CONTRIBUTIONS.—If—

"(1) the amount of the contributions paid (or deemed paid under this subsection) by the employer during any taxable year to a welfare benefit fund, exceeds "(2) the limitation of subsection (b), such excess shall be treated as an amount paid by the employer to such fund during the succeeding taxable year. "(e) WELFARE BENEFIT FUND.—For purposes of this section— "(1) IN GENERAL.—The term 'welfare benefit fund' means any fund— "(A) which is part of a plan of an employer, and "(B) through which the employer provides welfare benefits to employees or their beneficiaries. "(2) WELFARE BENEFIT.—The term 'welfare benefit' means any benefit other than a benefit with respect to which— "(A) section 83(h) applies, "(B) section 404 applies (determined without regard to section 404(b)(2)), "(C) section 404A applies, or "(D) an election under section 463 applies. "(3) FUND.—The term 'fund' means— "(A) any organization described in paragraph (7), (9), (17), or (20) of section 501(c), "(B) any trust, corporation, or other organization not exempt from the tax imposed by this chapter, and "(C) to the extent provided in regulations, any account held for an employer by any person. "(f) METHOD OF CONTRIBUTIONS, ETC., HAVING THE EFFECT OF A PLAN.—If—

"(1) there is no plan, but "(2) there is a method or arrangement of employer contributions or benefits which has the effect of a plan, this section shall apply as if there were a plan. "(g) EXTENSION TO PLANS FOR INDEPENDENT CONTRACTORS.—If any

fund would be a welfare benefit fund (as modified by subsection (f)) but for the fact that there is no employee-employer relationship— "(1) this section shall apply as if there were such a plan, and "(2) any reference in this section to the employer shall be treated as a reference to the person for whom services are provided, and any reference in this section to an employee shall be treated as a reference to the person providing the services. 26 USC 419A.

"SEC. 419A. QUALIFIED ASSET ACCOUNT; LIMITATION ON ADDITIONS TO ACCOUNT.

"(a) GENERAL RULE.—For purposes of this subpart, the term 'qualified asset account' means any account consisting of assets set aside to provide for the payment of— "(1) disability benefits, "(2) medical benefits, "(3) SUB or severance pay benefits, or "(4) life insurance benefits. "(b) LIMITATION ON ADDITIONS TO ACCOUNT.—No addition to any qualified asset account may be taken into account under section

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