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Internal Revenue Code, § 68. Overall Limitation On Itemized Deductions

I.R.C. § 68(a) General Rule
In the case of an individual whose adjusted gross income exceeds the applicable amount, the amount of the itemized deductions otherwise allowable for the taxable year shall be reduced by the lesser of—
I.R.C. § 68(a)(1)
3 percent of the excess of adjusted gross income over the applicable amount, or
I.R.C. § 68(a)(2)
80 percent of the amount of the itemized deductions otherwise allowable for such taxable year.
I.R.C. § 68(b) Applicable Amount
I.R.C. § 68(b)(1) In General
For purposes of this section, the term “applicable amount” means—
I.R.C. § 68(b)(1)(A)
$300,000 in the case of a joint return or a surviving spouse (as defined in section 2(a)),
I.R.C. § 68(b)(1)(B)
$275,000 in the case of a head of household (as defined in section 2(b)),
I.R.C. § 68(b)(1)(C)
$250,000 in the case of an individual who is not married and who is not a surviving spouse or head of household, and
I.R.C. § 68(b)(1)(D)
1/2 the amount applicable under subparagraph (A) (after adjustment, if any, under paragraph (2)) in the case of a married individual filing a separate return.
For purposes of this paragraph, marital status shall be determined under section 7703.
I.R.C. § 68(b)(2) Inflation Adjustment
In the case of any taxable year beginning in calendar years after 2013, each of the dollar amounts under subparagraphs (A), (B) and (C) of paragraph (1) shall be increased by an amount equal to—
I.R.C. § 68(b)(2)(A)
such dollar amount, multiplied by
I.R.C. § 68(b)(2)(B)
the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, except that section 1(f)(3)(A)(ii) shall be applied by substituting “2012” for “2016”.
If any amount after adjustment under the preceding sentence is not a multiple of $50, such amount shall be rounded to the next lowest multiple of $50.
I.R.C. § 68(c) Exception For Certain Itemized Deductions
For purposes of this section, the term “itemized deductions” does not include—
I.R.C. § 68(c)(1)
the deduction under section 213 (relating to medical, etc. expenses),
I.R.C. § 68(c)(2)
any deduction for investment interest (as defined in section 163(d)), and
I.R.C. § 68(c)(3)
the deduction under section 165(a) for casualty or theft losses described in paragraph (2) or (3) of section 165(c) or for losses described in section 165(d).
I.R.C. § 68(d) Coordination With Other Limitations
This section shall be applied after the application of any other limitation on the allowance of any itemized deduction.
I.R.C. § 68(e) Exception For Estates And Trusts
This section shall not apply to any estate or trust.
I.R.C. § 68(f) Section Not To Apply
This section shall not apply to any taxable year beginning after December 31, 2017, and before January 1, 2026.
(Added by Pub. L. 101-508, title XI, Sec. 11103(a), Nov. 5, 1990, 104 Stat. 1388-406; Pub. L. 103-66, title XIII, Sec. 13201(b)(3)(E), 13204, Aug. 10, 1993, 107 Stat. 312; Pub. L. 105-277, title IV, Sec. 4004(b), Oct. 21, 1998, 112 Stat 2681; Pub. L. 107-16, title I, Sec. 103(a), June 7, 2001, 115 Stat. 38; Pub. L. 112-240, Sec. 101(b)(2)(A), Jan. 2, 2013, 126 Stat. 2313; Pub. L. 115-97, title I, Sec. 11002(d)(2), 11046(a), Dec. 22, 2017, 131 Stat. 2054; Pub. L. 115-141, Div. U, title IV, Sec. 401(a)(33), Mar. 23, 2018, 132 Stat. 348.)
BACKGROUND NOTES
AMENDMENTS
2018--Subsec. (b)(2). Pub. L. 115-141, Div. U, Sec. 401(a)(33), amended par. (2) by substituting ‘‘shall be’’ for ‘‘shall be shall be’’.
2017--Subsec. (b)(2)(b). Pub. L. 115-97, Sec. 11002(d)(2), amended clause (ii) by substituting “(f)(3)(A)(ii)” for “1(f)(3)(B)”, and substituting “2016” for “1992”
Subsec. 68(f). Pub. L. 115-97, Sec. 11046(a), added subsec. (f).
2013--Subsec. (b). Pub. L. 112-240, Section 101(b)(2)(A)(i), amended subsection (b). Prior to being amended, it read as follows:
“(b) Applicable Amount.—
“(1) In General.—For purposes of this section, the term “applicable amount” means $100,000 ($50,000 in the case of a separate return by a married individual within the meaning of section 7703).
“(2) Inflation Adjustments.—In the case of any taxable year beginning in a calendar year after 1991, each dollar amount contained in paragraph (1) shall be increased by an amount equal to—
“(A) such dollar amount, multiplied by
“(B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, by substituting “calendar year 1990” for “calendar year 1992" in subparagraph (B) thereof.”
Subsec. (f). Pub. L. 112-240, Section 101(b)(2)(A)(ii), struck subsection (f). Prior to being struck, it read as follows:
“(f) Phaseout Of Limitation.—
“(1) In General.—In the case of taxable years beginning after December 31, 2005, and before January 1, 2010, the reduction under subsection (a) shall be equal to the applicable fraction of the amount which would (but for this subsection) be the amount of such reduction.
“(2) Applicable Fraction.—For purposes of paragraph (1), the applicable fraction shall be determined in accordance with the following table:
 

For taxable years             
beginning in calendar year--        The applicable fraction is--    

2006 and 2007                       2/3 
2008 and 2009                       1/3”
Subsec. (g). Pub. L. 112-240, Section 101(b)(2)(A)(ii), struck subsection (g). Prior to being struck, it read as follows:
“(g) Termination.—This section shall not apply to any taxable year beginning after December 31, 2009.”
2001--Subsec. (f). Pub. L. 107-16, Section 103(a), added subsection (f).
Subsec. (g). Pub. L. 107-16, Section 103(a), added subsection (g).
1998--Subsec. (c)(3). Pub. L. 105-277, Section 4004(b)(2), substituted “for casualty or theft losses described in paragraph (2) or (3) of section 165(c) or for losses described in section 165(d)" for “for losses described in subsection (c)(3) or (d) of section 165”.
1993 - Subsec. (b)(2)(B). Pub. L. 103-66, Section 13201(b)(3)(E) substituted “1992” for “1989”.
Subsec. (f). Pub. L. 103-66, Section 13204, repealed subsection (f). Subsection (f) formerly read:
“(f) TERMINATION. — This section shall not apply to any taxable year beginning after December 31, 1995.”
EFFECTIVE DATE OF 2018 AMENDMENTS
Amendment by Pub. L. 115-141, Div. U, Sec. 401(a)(33), effective March 23, 2018.
EFFECTIVE DATE OF 2017 AMENDMENTS
Amendments made Pub. L. 115-97, Sec. 11002(d)(2), effective for taxable years beginning after December 31, 2017.
Amendment made Pub. L. 115-97, Sec. 11046(a), effective for taxable years beginning after December 31, 2017.
EFFECTIVE DATE OF 2013 AMENDMENTS
Amendments made by Sec. 101(b) of Pub. L. 112-240 effective for taxable years beginning after December 31, 2012.
EFFECTIVE DATE OF 2001 AMENDMENTS
Amendment made by Sec. 103(a) of Pub. L. 107-16 effective for taxable years beginning after December 31, 2005.
Section 901 (Sunset of Provisions of Act) of Pub. L. 107-16, as amended by Pub. L. 107-358 and Pub. L. 111-312, Sec. 101(a), and struck by Pub. L. 112-240, Sec. 101(a)(1) (effective for taxable, plan, or limitation years beginning after Dec. 31, 2012, and estates of decedents dying, gifts made, or generation skipping transfers after Dec. 31, 2012), provided that:
“(a) IN GENERAL.—All provisions of, and amendments made by, this Act shall not apply—
“(1) to taxable, plan, or limitation years beginning after December 31, 2012, or
“(2) in the case of title V, to estates of decedents dying, gifts made, or generation skipping transfers, after December 31, 2012.
“(b) APPLICATION OF CERTAIN LAWS.—The Internal Revenue Code of 1986 and the Employee Retirement Income Security Act of 1974 shall be applied and administered to years, estates, gifts, and transfers described in subsection (a) as if the provisions and amendments described in subsection (a) had never been enacted.
“(c) EXCEPTION.—Subsection (a) shall not apply to section 803 (relating to no federal income tax on restitution received by victims of the Nazi regime or their heirs or estates).”
EFFECTIVE DATE OF 1998 AMENDMENTS
Amendment made by section 4004(b)(2) of Pub. L. 105-277 applicable to taxable years beginning after December 31, 1990.
EFFECTIVE DATE OF 1993 AMENDMENTS
Amendment made by section 13201(b)(3)(E) of Pub. L. 103-66, shall apply to taxable years beginning after December 31, 1992.
Amendment by section 13204 of Pub. L. 103-66, effective August 10, 1993.
EFFECTIVE DATE
Section applicable to taxable years beginning after Dec. 31, 1990, see section 11103(e) of Pub. L. 101-508, set out as an Effective Date of 1990 Amendment note under section 1 of this title.
DISASTER TAX RELIEF AND AIRPORT AND AIRWAY EXTENSION ACT OF 2017
Section 504(a) of Pub. L. 115-63 provided:
“(1) IN GENERAL.—Except as otherwise provided in paragraph (2), subsection (b) of section 170 of the Internal Revenue Code of 1986 shall not apply to qualified contributions and such contributions shall not be taken into account for purposes of applying subsections (b) and (d) of such section to other contributions.”
“(2) TREATMENT OF EXCESS CONTRIBUTIONS.—For purposes of section 170 of the Internal Revenue Code of 1986—
“(A) INDIVIDUALS.—In the case of an individual—
“(i) LIMITATION.—Any qualified contribution shall be allowed only to the extent that the aggregate of such contributions does not exceed the excess of the taxpayer's contribution base (as defined in subparagraph (G) of section 170(b)(1) of such Code) over the amount of all other charitable contributions allowed under section 170(b)(1) of such Code.
“(ii) CARRYOVER.—If the aggregate amount of qualified contributions made in the contribution year (within the meaning of section 170(d)(1) of such Code) exceeds the limitation of clause (i), such excess shall be added to the excess described in the portion of subparagraph (A) of such section which precedes clause (i) thereof for purposes of applying such section.
“(B) CORPORATIONS.—In the case of a corporation—
“(i) LIMITATION.—Any qualified contribution shall be allowed only to the extent that the aggregate of such contributions does not exceed the excess of the taxpayer's taxable income (as determined under paragraph (2) of section 170(b) of such Code) over the amount of all other charitable contributions allowed under such paragraph.
“(ii) CARRYOVER.—Rules similar to the rules of subparagraph (A)(ii) shall apply for purposes of this subparagraph.”
“(3) EXCEPTION TO OVERALL LIMITATION ON ITEMIZED DEDUCTIONS.—So much of any deduction allowed under section 170 of the Internal Revenue Code of 1986 as does not exceed the qualified contributions paid during the taxable year shall not be treated as an itemized deduction for purposes of section 68 of such Code.
“(4) QUALIFIED CONTRIBUTIONS.—
“(A) IN GENERAL.—For purposes of this subsection, the term ‘‘qualified contribution’’ means any charitable contribution (as defined in section 170(c) of the Internal Revenue Code of 1986) if—
“(i) such contribution—
“(I) is paid during the period beginning on August 23, 2017, and ending on December 31, 2017, in cash to an organization described in section 170(b)(1)(A) of such Code, and
“(II) is made for relief efforts in the Hurricane Harvey disaster area, the Hurricane Irma disaster area, or the Hurricane Maria disaster area,
“(ii) the taxpayer obtains from such organization contemporaneous written acknowledgment (within the meaning of section 170(f)(8) of such Code) that such contribution was used (or is to be used) for relief efforts described in clause (i)(II), and
“(iii) the taxpayer has elected the application of this subsection with respect to such contribution.
“(B) EXCEPTION.—Such term shall not include a contribution by a donor if the contribution is—
“(i) to an organization described in section 509(a)(3) of the Internal Revenue Code of 1986, or
“(ii) for the establishment of a new, or maintenance of an existing, donor advised fund (as defined in section 4966(d)(2) of such Code).
“(C) APPLICATION OF ELECTION TO PARTNERSHIPS AND S CORPORATIONS.—In the case of a partnership or S corporation, the election under subparagraph (A)(iii) shall be made separately by each partner or shareholder.”
EXCEPTION TO OVERALL LIMITATION ON ITEMIZED DEDUCTIONS
Section 301(c) of Pub. L. 109-73 provided that:
“So much of any deduction allowed under section 170 of such Code as does not exceed the qualified contributions paid during the taxable year shall not be treated as an itemized deduction for purposes of section 68 of such Code.”
ELECTION TO PAY ADDITIONAL 1993 TAXES IN INSTALLMENTS
Section 13201(d) of the Revenue Reconciliation Act of 1993 provides:
“(1) In general. —
“At the election of the taxpayer, the additional 1993 taxes may be paid in 3 equal installments.
“(2) Dates for paying installments. —
“In the case of any tax payable in installments by reason of paragraph (1) —
“(A) the first installment shall be paid on or before the due date for the taxpayer's taxable year beginning in calendar year 1993,
“(B) the second installment shall be paid on or before the date 1 year after the date determined under subparagraph (A), and
“(C) the third installment shall be paid on or before the date 2 years after the date determined under subparagraph (A).
“For purposes of the preceding sentence, the term ‘due date’ means the date prescribed for filing the taxpayer's return determined without regard to extensions.
“(3) Extension without interest. —
“For purposes of section 6601 of the Internal Revenue Code of 1986, the date prescribed for the payment of any tax payable in installments under paragraph (1) shall be determined with regard to the extension under paragraph (1).
“(4) Additional 1993 taxes. —
“(A) In general. —
“For purposes of this subsection, the term ‘additional 1993 taxes’ means the excess of —
“(i) the taxpayer's net chapter 1 liability as shown on the taxpayer's return for the taxpayer's taxable year beginning in calendar year 1993, over
“(ii) the amount which would have been the taxpayer's net chapter 1 liability for such taxable year if such liability had been determined using the rates which would have been in effect under section 1 of the Internal Revenue Code of 1986 for taxable years beginning in calendar year 1993 but for the amendments made by this section and section 13202 and such liability had otherwise been determined on the basis of the amounts shown on the taxpayer's return.
“(B) Net chapter 1 liability. —
“For purposes of subparagraph (A), the term ‘net chapter 1 liability’ means the liability for tax under chapter 1 of the Internal Revenue Code of 1986 determined —
“(i) after the application of any credit against such tax other than the credits under sections 31 and 34, and
“(ii) before crediting any payment of estimated tax for the taxable year.
“(5) Acceleration of payments. —
“If the taxpayer does not pay any Installment under this section on or before the date prescribed for its payment or if the Secretary of the Treasury or his delegate believes that the collection of any amount payable in installments under this section is in jeopardy, the Secretary shall immediately terminate the extension under paragraph (1) and the whole of the unpaid tax shall be paid on notice and demand from the Secretary.
“(6) Election on return. —
“An election under paragraph (1) shall be made on the taxpayer's return for the taxpayer's taxable year beginning in calendar year 1993.
“(7) Exception for estates and trusts. —
“This subsection shall not apply in the case of an estate or trust.”