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Internal Revenue Code, § 56. Adjustments In Computing Alternative Minimum Taxable Income

I.R.C. § 56(a) Adjustments Applicable To All Taxpayers
In determining the amount of the alternative minimum taxable income for any taxable year the following treatment shall apply (in lieu of the treatment applicable for purposes of computing the regular tax):
I.R.C. § 56(a)(1) Depreciation
I.R.C. § 56(a)(1)(A) In General
I.R.C. § 56(a)(1)(A)(i) Property Other Than Certain Personal Property
Except as provided in clause (ii), the depreciation deduction allowable under section 167 with respect to any tangible property placed in service after December 31, 1986, shall be determined under the alternative system of section 168(g). In the case of property placed in service after December 31, 1998, the preceding sentence shall not apply but clause (ii) shall continue to apply.
I.R.C. § 56(a)(1)(A)(ii) 150-Percent Declining Balance Method For Certain Property
The method of depreciation used shall be—
I.R.C. § 56(a)(1)(A)(ii)(I)
the 150 percent declining balance method,
I.R.C. § 56(a)(1)(A)(ii)(II)
switching to the straight line method for the 1st taxable year for which using the straight line method with respect to the adjusted basis as of the beginning of the year will yield a higher allowance.
The preceding sentence shall not apply to any section 1250 property (as defined in section 1250(c)) (and the straight line method shall be used for such section 1250 property) or to any other property if the depreciation deduction determined under section 168 with respect to such other property for purposes of the regular tax is determined by using the straight line method.
I.R.C. § 56(a)(1)(B) Exception For Certain Property
This paragraph shall not apply to property described in paragraph (1), (2), (3), or (4) of section 168(f), or in section 168(e)(3)(C)(iv).
I.R.C. § 56(a)(1)(C) Coordination With Transitional Rules
I.R.C. § 56(a)(1)(C)(i) In General
This paragraph shall not apply to property placed in service after December 31, 1986, to which the amendments made by section 201 of the Tax Reform Act of 1986 do not apply by reason of section 203, 204, or 251(d) of such Act.
I.R.C. § 56(a)(1)(C)(ii) Treatment Of Certain Property Placed In Service Before 1987
This paragraph shall apply to any property to which the amendments made by section 201 of the Tax Reform Act of 1986 apply by reason of an election under section 203(a)(1)(B) of such Act without regard to the requirement of subparagraph (A) that the property be placed in service after December 31, 1986.
I.R.C. § 56(a)(1)(D) Normalization Rules
With respect to public utility property described in section 168(i)(10), the Secretary shall prescribe the requirements of a normalization method of accounting for this section.
I.R.C. § 56(a)(2) Mining Exploration And Development Costs
I.R.C. § 56(a)(2)(A) In General
With respect to each mine or other natural deposit (other than an oil, gas, or geothermal well) of the taxpayer, the amount allowable as a deduction under section 616(a) or 617(a) (determined without regard to section 291(b)) in computing the regular tax for costs paid or incurred after December 31, 1986, shall be capitalized and amortized ratably over the 10-year period beginning with the taxable year in which the expenditures were made.
I.R.C. § 56(a)(2)(B) Loss Allowed
If a loss is sustained with respect to any property described in subparagraph (A), a deduction shall be allowed for the expenditures described in subparagraph (A) for the taxable year in which such loss is sustained in an amount equal to the lesser of—
I.R.C. § 56(a)(2)(B)(i)
the amount allowable under section 165(a) for the expenditures if they had remained capitalized, or
I.R.C. § 56(a)(2)(B)(ii)
the amount of such expenditures which have not previously been amortized under subparagraph (A).
I.R.C. § 56(a)(3) Treatment Of Certain Long-Term Contracts
In the case of any long-term contract entered into by the taxpayer on or after March 1, 1986, the taxable income from such contract shall be determined under the percentage of completion method of accounting (as modified by section 460(b)). For purposes of the preceding sentence, in the case of a contract described in section 460(e)(1), the percentage of the contract completed shall be determined under section 460(b)(1) by using the simplified procedures for allocation of costs prescribed under section 460(b)(3). The first sentence of this paragraph shall not apply to any home construction contract (as defined in section 460(e)(6)).
I.R.C. § 56(a)(4) Alternative Tax Net Operating Loss Deduction
The alternative tax net operating loss deduction shall be allowed in lieu of the net operating loss deduction allowed under section 172.
I.R.C. § 56(a)(5) Pollution Control Facilities
In the case of any certified pollution control facility placed in service after December 31, 1986, the deduction allowable under section 169 (without regard to section 291) shall be determined under the alternative system of section 168(g). In the case of such a facility placed in service after December 31, 1998, such deduction shall be determined under section 168 using the straight line method.
I.R.C. § 56(a)(6) Adjusted Basis
The adjusted basis of any property to which paragraph (1) or (5) applies (or with respect to which there are any expenditures to which paragraph (2) or subsection (b)(2) applies) shall be determined on the basis of the treatment prescribed in paragraph (1), (2), or (5), or subsection (b)(2), whichever applies.
I.R.C. § 56(a)(7) Section 87 Not Applicable
Section 87 (relating to alcohol fuel credit) shall not apply.
I.R.C. § 56(b) Adjustments Applicable To Individuals
In determining the amount of the alternative minimum taxable income of any taxpayer (other than a corporation), the following treatment shall apply (in lieu of the treatment applicable for purposes of computing the regular tax):
I.R.C. § 56(b)(1) Limitation On Deductions
I.R.C. § 56(b)(1)(A) In General
No deduction shall be allowed—
I.R.C. § 56(b)(1)(A)(i)
for any miscellaneous itemized deduction (as defined in section 67(b)), or
I.R.C. § 56(b)(1)(A)(ii)
for any taxes described in paragraph (1), (2), or (3) of section 164(a) or clause (ii) of section 164(b)(5)(A).
Clause (ii) shall not apply to any amount allowable in computing adjusted gross income.
I.R.C. § 56(b)(1)(B) Medical Expenses
In determining the amount allowable as a deduction under section 213, subsection (a) of section 213 shall be applied without regard to subsection (f) of such section. This subparagraph shall not apply to taxable years beginning after December 31, 2016, and ending before January 1, 2019
I.R.C. § 56(b)(1)(C) Interest
In determining the amount allowable as a deduction for interest, subsections (d) and (h) of section 163 shall apply, except that—
I.R.C. § 56(b)(1)(C)(i)
in lieu of the exception under section 163(h)(2)(D), the term “personal interest” shall not include any qualified housing interest (as defined in subsection (e)),
I.R.C. § 56(b)(1)(C)(ii)
interest on any specified private activity bond (and any amount treated as interest on a specified private activity bond under section 57(a)(5)(B)), and any deduction referred to in section 57(a)(5)(A), shall be treated as includible in gross income (or as deductible) for purposes of applying section 163(d),
I.R.C. § 56(b)(1)(C)(iii)
in lieu of the exception under section 163(d)(3)(B)(i), the term “investment interest” shall not include any qualified housing interest (as defined in subsection (e)), and
I.R.C. § 56(b)(1)(C)(iv)
the adjustments of this section and sections 57 and 58 shall apply in determining net investment income under section 163(d).
I.R.C. § 56(b)(1)(D) Treatment Of Certain Recoveries
No recovery of any tax to which subparagraph (A)(ii) applied shall be included in gross income for purposes of determining alternative minimum taxable income.
I.R.C. § 56(b)(1)(E) Standard Deduction And Deduction For Personal Exemptions Not Allowed
The standard deduction under section 63(c), the deduction for personal exemptions under section 151, and the deduction under section 642(b) shall not be allowed.
I.R.C. § 56(b)(1)(F) Section 68 Not Applicable
Section 68 shall not apply.
I.R.C. § 56(b)(2) Circulation And Research And Experimental Expenditures
I.R.C. § 56(b)(2)(A) In General
The amount allowable as a deduction under section 173 or 174(a) in computing the regular tax for amounts paid or incurred after December 31, 1986, shall be capitalized and—
I.R.C. § 56(b)(2)(A)(i)
in the case of circulation expenditures described in section 173, shall be amortized ratably over the 3-year period beginning with the taxable year in which the expenditures were made, or
I.R.C. § 56(b)(2)(A)(ii)
in the case of research and experimental expenditures described in section 174(a), shall be amortized ratably over the 10-year period beginning with the taxable year in which the expenditures were made.
I.R.C. § 56(b)(2)(B) Loss Allowed
If a loss is sustained with respect to any property described in subparagraph (A), a deduction shall be allowed for the expenditures described in subparagraph (A) for the taxable year in which such loss is sustained in an amount equal to the lesser of—
I.R.C. § 56(b)(2)(B)(i)
the amount allowable under section 165(a) for the expenditures if they had remained capitalized, or
I.R.C. § 56(b)(2)(B)(ii)
the amount of such expenditures which have not previously been amortized under subparagraph (A).
I.R.C. § 56(b)(2)(C) Exception for Certain Research and Experimental Expenditures.
If the taxpayer materially participates (within the meaning of section 469(h)) in an activity, this paragraph shall not apply to any amount allowable as a deduction under section 174(a) for expenditures paid or incurred in connection with such activity.
I.R.C. § 56(b)(3) Treatment Of Incentive Stock Options
Section 421 shall not apply to the transfer of stock acquired pursuant to the exercise of an incentive stock option (as defined in section 422). Section 422(c)(2) shall apply in any case where the disposition and the inclusion for purposes of this part are within the same taxable year and such section shall not apply in any other case. The adjusted basis of any stock so acquired shall be determined on the basis of the treatment prescribed by this paragraph.
I.R.C. § 56(c) Repealed
[Repealed. Pub. L. 115-97, Sec. 12001(b)(8)(A), Dec. 22, 2017.]
I.R.C. § 56(d) Alternative Tax Net Operating Loss Deduction Defined
I.R.C. § 56(d)(1) In General
For purposes of subsection (a)(4), the term “alternative tax net operating loss deduction” means the net operating loss deduction allowable for the taxable year under section 172, except that—
I.R.C. § 56(d)(1)(A)
the amount of such deduction shall not exceed the sum of—
I.R.C. § 56(d)(1)(A)(i)
the lesser of—
I.R.C. § 56(d)(1)(A)(i)(I)
the amount of such deduction attributable to net operating losses (other than the deduction described in clause (ii)(I), or
I.R.C. § 56(d)(1)(A)(i)(II)
90 percent of alternative minimum taxable income determined without regard to such deduction and the deduction under section 199, plus
I.R.C. § 56(d)(1)(A)(ii)
the lesser of—
I.R.C. § 56(d)(1)(A)(ii)(I)
the amount of such deduction attributable to an applicable net operating loss with respect to which an election is made under section 172(b)(1)(H) (as in effect before its repeal by the Tax Increase Prevention Act of 2014), or
I.R.C. § 56(d)(1)(A)(ii)(II)
alternative minimum taxable income determined without regard to such deduction and the deduction under section 199 reduced by the amount determined under clause (i), and
I.R.C. § 56(d)(1)(B)
in determining the amount of such deduction—
I.R.C. § 56(d)(1)(B)(i)
the net operating loss (within the meaning of section 172(c)) for any loss year shall be adjusted as provided in paragraph (2), and
I.R.C. § 56(d)(1)(B)(ii)
appropriate adjustments in the application of section 172(b)(2) shall be made to take into account the limitation of subparagraph (A).
I.R.C. § 56(d)(2) Adjustments To Net Operating Loss Computation
I.R.C. § 56(d)(2)(A) Post-1986 Loss Years
In the case of a loss year beginning after December 31, 1986, the net operating loss for such year under section 172(c) shall—
I.R.C. § 56(d)(2)(A)(i)
be determined with the adjustments provided in this section and section 58, and
I.R.C. § 56(d)(2)(A)(ii)
be reduced by the items of tax preference determined under section 57 for such year.
An item of tax preference shall be taken into account under clause (ii) only to the extent such item increased the amount of the net operating loss for the taxable year under section 172(c).
I.R.C. § 56(d)(2)(B) Pre-1987 Years
In the case of loss years beginning before January 1, 1987, the amount of the net operating loss which may be carried over to taxable years beginning after December 31, 1986, for purposes of paragraph (2), shall be equal to the amount which may be carried from the loss year to the first taxable year of the taxpayer beginning after December 31, 1986.
I.R.C. § 56(e) Qualified Housing Interest
For purposes of this part—
I.R.C. § 56(e)(1) In General
The term “qualified housing interest” means interest which is qualified residence interest (as defined in section 163(h)(3)) and is paid or accrued during the taxable year on indebtedness which is incurred in acquiring, constructing, or substantially improving any property which—
I.R.C. § 56(e)(1)(A)
is the principal residence (within the meaning of section 121) of the taxpayer at the time such interest accrues, or
I.R.C. § 56(e)(1)(B)
is a qualified dwelling which is a qualified residence (within the meaning of section 163(h)(4)).
Such term also includes interest on any indebtedness resulting from the refinancing of indebtedness meeting the requirements of the preceding sentence; but only to the extent that the amount of the indebtedness resulting from such refinancing does not exceed the amount of the refinanced indebtedness immediately before the refinancing.
I.R.C. § 56(e)(2) Qualified Dwelling
The term “qualified dwelling” means any—
I.R.C. § 56(e)(2)(B)
apartment,
I.R.C. § 56(e)(2)(C)
condominium, or
I.R.C. § 56(e)(2)(D)
mobile home not used on a transient basis (within the meaning of section 7701(a)(19)(C)(v)), including all structures or other property appurtenant thereto.
I.R.C. § 56(e)(3) Special Rule For Indebtedness Incurred Before July 1, 1982
The term “qualified housing interest” includes interest which is qualified residence interest (as defined in section 163(h)(3)) and is paid or accrued on indebtedness which—
I.R.C. § 56(e)(3)(A)
was incurred by the taxpayer before July 1, 1982, and
I.R.C. § 56(e)(3)(B)
is secured by property which, at the time such indebtedness was incurred, was—
I.R.C. § 56(e)(3)(B)(i)
the principal residence (within the meaning of section 121) of the taxpayer, or
I.R.C. § 56(e)(3)(B)(ii)
a qualified dwelling used by the taxpayer (or any member of his family (within the meaning of section 267(c)(4))).
I.R.C. § 56(f) Repealed
[Repealed Pub. L. 101-508, Sec. 11801(a)(3), Nov. 5, 1990, 104 Stat. 1388.]
I.R.C. § 56(g) Repealed
[Repealed. Pub. L. 115-97, Sec. 12001(b)(8)(A), Dec. 22, 2017, 131 Stat. 2054.]
(Added by Pub. L. 99-514, title VII, Sec. 701(a), Oct. 22, 1986, 100 Stat. 2322, and amended by Pub. L. 100-203, title X, Sec. 10202(d), 10243(a), Dec. 22, 1987, 101 Stat. 1330-392, 1330-423; Pub. L. 100-647, title I, Sec. 1002(a)(12), 1007(b)(1)-(14)(A), (15)-(19), title II, Sec. 2001(c)(3)(A), 2004(b)(2), (3), title V, Sec. 5041(b)(4), title VI, Sec. 6079(a)(1), 6303(a), Nov. 10, 1988, 102 Stat. 3355, 3428-3432, 3594, 3599, 3674, 3709, 3755; Pub. L. 101-239, title VII, Sec. 7205(b), 7611(a)-(f)(4), 7612(c)(1), (d)(1), 7811(d)(3), 7815(e)(2), (4),7821(a)(5), Dec. 19, 1989, 103 Stat. 2335, 2371-2374, 2408, 2419, 2424; Pub. L. 101-508, title XI, Sec. 11103(b), 11301(b), 11531(a), (b)(1), 11704(a)(1), 11801(a)(3), (c)(2)(A)-(C), (9)(G), 11812(b)(4), Nov. 5, 1990, 104 Stat. 1388-406, 1388-449, 1388-488, 1388-490, 1388-518, 1388-520, 1388-522, 1388-523, 1388-526, 1388-535; Pub. L. 102-486, title XIX, Sec. 1915(b)(2), Oct. 24, 1992, 106 Stat. 2776; 3024; Pub. L. 103-66, title XIII, Sec. 13115(a), 13171(b), 13227(c), Aug. 10, 1993, 107 Stat. 312; Pub. L. 104-188, title I, Aug. 20, 1996, 110 Stat. 1755; Pub. L. 104-188, title XVI, XVII, Sec. 1601(b)(2)(c), (c)(2)-(3), 1702(c)(1), (e)(1)(B), (g)(4), 1704(t)(1), Aug. 20, 1996, 110 Stat 1883; 1869, 1870, 1873, 1887; Pub. L. 105-34, title III, IV, XII, Sec. 312(d)(1), 402, 403(a), 1212(a), Aug. 5, 1997, 111 Stat 788; Pub. L. 105-277, title IV, Sec. 4006(c), Oct. 21, 1998, 112 Stat 2681; Pub. L. 106-519, Sec. 4(1), Nov. 15, 2000; Pub. L. 106-554, Sec. 314, Dec. 21, 2000, 114 Stat. 2763; Pub. L. 107-147, title I, IV, Sec. 102(c)(1), 417(5), Mar. 9, 2002, 116 Stat. 21; Pub. L. 108-173, title XII, Sec. 1202(b), Dec. 8, 2003, 117 Stat. 2066; Pub. L. 108-311, title IV, Sec. 403(b), Oct. 4, 2004, 118 Stat. 1166; Pub. L. 108-357, title 1, IV, 835, Sec. 101(b)(4), 102(b), 422(b), 835(b)(1), Oct. 22, 2004, 118 Stat. 1418; Pub. L. 109-58, title XIII, Sec. 1326(d), Aug. 8, 2005, 119 Stat. 594; Pub. L. 109-135, title IV, Sec. 403(a)(14), 403(r)(2), Dec. 21, 2005, 119 Stat. 2577; Pub. L. 109-304, Sec. 17(e)(1), Oct. 6, 2006, 120 Stat. 1485; Pub. L. 110-172, Sec. 11(g)(1), 11(g)(2), Dec. 29, 2007, 121 Stat. 2473; Pub. L. 110-289, div. C, title I, Sec. 3022(a)(2), July 30, 2008, 122 Stat. 2654; Pub. L. 110-343, div. C, title VII, Sec. 706(b)(3), 708(c), Oct. 3, 2008, 122 Stat. 3765; Pub. L. 111-5, div. B, title I, Sec. 1008(d), 1503(b), Feb. 17, 2009, 123 Stat. 115; Pub. L. 111-92, Sec. 13(b), Nov. 6, 2009, 123 Stat. 2984; Pub. L. 111-148, Sec. 9013(c), Mar. 23, 2010, 124 Stat. 119; Pub. L. 113-295, Div. A, title II, Sec. 215(b), 221(a)(9), 221(a)(25)(B), 221(a)(30)(C), Dec. 19, 2014, 128 Stat. 4010; Pub. L. 115-97, title I, Sec. 11027(b), 12001(b)(7), (8)(A), Dec. 22, 2017, 131 Stat. 2054; Pub. L. 115-141, Div. U, title IV, Sec. 401(b)(7)–(8), Mar. 23, 2018, 132 Stat. 348.)
BACKGROUND NOTES
AMENDMENTS
2018--Subsec. (b)(1)(E). Pub. L. 115-141, Div. U, Sec. 401(b)(7), amended subpar. (E) by striking the last sentence “The preceding sentence shall not apply to so much of the standard deduction as is determined under subparagraphs (D) and (E) of section 63(c)(1).”.
Subsec. (d)(1)(A)(ii)(I). Pub. L. 115-141, Div. U, Sec. 401(b)(8), amended subclause (I) by inserting “(as in effect before its repeal by the Tax Increase Prevention Act of 2014)” after “section 172(b)(1)(H)”.
2017--Subsec. (b)(1)(B). Pub. L. 115-97, Sec. 11027(b), amended subpar. (B) by adding the sentence at the end.
Subsec. (b)(2)(C). Pub. L. 115-97, Sec. 12001(b)(7), amended par. (2) by striking subpar. (C) and by redesignating subpar. (D) as subpar. (C). Before amendment, subpar. (C) read as follows:
“(C) Special Rule For Personal Holding Companies.—In the case of circulation expenditures described in section 173, the adjustments provided in this paragraph shall apply also to a personal holding company (as defined in section 542).”
Subsec. (c). Pub. L. 115-97, Sec. 12001(b)(8)(A), struck subsec. (c). Before amendment, it read as follows:
“(c) Adjustments Applicable To Corporations
“(1) Adjustment For Adjusted Current Earnings.—Alternative minimum taxable income shall be adjusted as provided in subsection (g).
“(2) “Merchant Marine Capital Construction Funds.—In the case of a capital construction fund established under chapter 535 of title 46, United States —
“(A) subparagraphs (A), (B), and (C) of section 7518(c)(1) (and the corresponding provisions of such chapter 535) shall not apply to—
“(i) any amount deposited in such fund after December 31, 1986, or
“(ii) any earnings (including gains and losses) after December 31, 1986, on amounts in such fund, and
“(B) no reduction in basis shall be made under section 7518(f) (or the corresponding provisions of such chapter 535) with respect to the withdrawal from the fund of any amount to which subparagraph (A) applies.
“For purposes of this paragraph, any withdrawal of deposits or earnings from the fund shall be treated as allocable first to deposits made before (and earnings received or accrued before) January 1, 1987.
“(3) Special Deduction For Certain Organizations Not Allowed.—The deduction determined under section 4833(b) shall not be allowed.”
Subsec. (g). Pub. L. 115-97, Sec. 12001(b)(8)(A), struck subsec. (g). Before amendment, it read as follows:
“(g) Adjustments Based On Adjusted Current Earnings
“(1) In General.—The alternative minimum taxable income of any corporation for any taxable year shall be increased by 75 percent of the excess (if any) of—
“(A) the adjusted current earnings of the corporation, over
“(B) the alternative minimum taxable income (determined without regard to this subsection and the alternative tax net operating loss deduction).
“(2) Allowance Of Negative Adjustments
“(A) In General.—The alternative minimum taxable income for any corporation of any taxable year beginning after 1989, shall be reduced by 75 percent of the excess (if any) of—
“(i) the amount referred to in subparagraph (B) of paragraph (1), over
“(ii) the amount referred to in subparagraph (A) of paragraph (1).
“(B) Limitation.—The reduction under subparagraph (A) for any taxable year shall not exceed the excess (if any) of—
“(i) the aggregate increases in alternative minimum taxable income under paragraph (1) for prior taxable years, over
“(ii) the aggregate reductions under subparagraph (A) of this paragraph for prior taxable years.
“(3) Adjusted Current Earnings.—For purposes of this subsection, the term “adjusted current earnings” means the alternative minimum taxable income for the taxable year—
“(A) determined with the adjustments provided in paragraph (4), and
“(B) determined without regard to this subsection and the alternative tax net operating loss deduction.
“(4) Adjustments.—In determining adjusted current earnings, the following adjustments shall apply:
“(A) Depreciation
“(i) Property Placed In Service After 1989.—The depreciation deduction with respect to any property placed in service in a taxable year beginning after 1989 shall be determined under the alternative system of section 168(g). The preceding sentence shall not apply to any property placed in service after December 31, 1993, and the depreciation deduction with respect to such property shall be determined under the rules of subsection (a)(1)(A).
“(ii) Property To Which New ACRS System Applies.—In the case of any property to which the amendments made by section 201 of the Tax Reform Act of 1986 apply and which is placed in service in a taxable year beginning before 1990, the depreciation deduction shall be determined—
“(I) by taking into account the adjusted basis of such property (as determined for purposes of computing alternative minimum taxable income) as of the close of the last taxable year beginning before January 1, 1990, and
“(II) by using the straight-line method over the remainder of the recovery period applicable to such property under the alternative system of section 168(g).
“(iii) Property To Which Original ACRS System Applies.—In the case of any property to which section 168 (as in effect on the day before the date of the enactment of the Tax Reform Act of 1986 and without regard to subsection (d)(1)(A)(ii) thereof) applies and which is placed in service in a taxable year beginning before 1990, the depreciation deduction shall be determined—
“(I) by taking into account the adjusted basis of such property (as determined for purposes of computing the regular tax) as of the close of the last taxable year beginning before January 1, 1990, and
“(II) by using the straight line method over the remainder of the recovery period which would apply to such property under the alternative system of section 168(g).
“(iv) Property Placed In Service Before 1981.—In the case of any property not described in clause (i), (ii), or (iii), the amount allowable as depreciation or amortization with respect to such property shall be determined in the same manner as for purposes of computing taxable income.
“(v) Special Rule For Certain Property.—In the case of any property described in paragraph (1), (2), (3), or (4) of section 168(f), the amount of depreciation allowable for purposes of the regular tax shall be treated as the amount allowable under the alternative system of section 168(g).
“(B) Inclusion Of Items Included For Purposes Of Computing Earnings And Profits
“(i) In General.—In the case of any amount which is excluded from gross income for purposes of computing alternative minimum taxable income but is taken into account in determining the amount of earnings and profits—
“(I) such amount shall be included in income in the same manner as if such amount were includible in gross income for purposes of computing alternative minimum taxable income, and
“(II) the amount of such income shall be reduced by any deduction which would have been allowable in computing alternative minimum taxable income if such amount were includible in gross income.
“The preceding sentence shall not apply in the case of any amount excluded from gross income under section 108 (or the corresponding provisions of prior law). In the case of any insurance company taxable under section 831(b), this clause shall not apply to any amount not described in section 834(b) or under section 139A.
“(ii) Inclusion Of Buildup In Life Insurance Contracts.—In the case of any life insurance contract—
“(I) the income on such contract (as determined under section 7702(g)) for any taxable year shall be treated as includible in gross income for such year, and
“(II) there shall be allowed as a deduction that portion of any premium which is attributable to insurance coverage.
“(iii) Tax Exempt Interest On Certain Housing Bonds.—Clause (i) shall not apply in the case of any interest on a bond to which section 57(a)(5)(C)(iii) applies.
“(iv) Tax Exempt Interest On Bonds Issued In 2009 And 2010
“(I) In General.—Clause (i) shall not apply in the case of any interest on a bond issued after December 31, 2008, and before January 1, 2011.
“(II) Treatment Of Refunding Bonds.—For purposes of subclause (I), a refunding bond (whether a current or advance refunding) shall be treated as issued on the date of the issuance of the refunded bond (or in the case of a series of refundings, the original bond).
“(III) Exception For Certain Refunding Bonds.—Subclause (II) shall not apply to any refunding bond which is issued to refund any bond which was issued after December 31, 2003, and before January 1, 2009.
“(C) Disallowance Of Items Not Deductible In Computing Earnings And Profits
“(i) In General.—A deduction shall not be allowed for any item if such item would not be deductible for any taxable year for purposes of computing earnings and profits.
“(ii) Special Rule For Certain Dividends
“(I) In General.—Clause (i) shall not apply to any deduction allowable under section 243 or 245 for any dividend which is a 100-percent dividend or which is received from a 20-percent owned corporation (as defined in section 243(c)(2)), but only to the extent such dividend is attributable to income of the paying corporation which is subject to tax under this chapter determined after the application of sections 30A, 936 (including subsections (a)(4) and (i) thereof) and 921 (as in effect before its repeal by the FSC Repeal and Extraterritorial Income Exclusion Act of 2000).
“(II) 100-Percent Dividend.—For purposes of subclause (I), the term “100 percent dividend” means any dividend if the percentage used for purposes of determining the amount allowable as a deduction under section 243 or 245 with respect to such dividend is 100 percent.
“(iii) Treatment Of Taxes On Dividends From 936 Corporations
“(I) In General.—For purposes of determining the alternative minimum foreign tax credit, 75 percent of any withholding or income tax paid to a possession of the United States with respect to dividends received from a corporation eligible for the credit provided by section 936 shall be treated as a tax paid to a foreign country by the corporation receiving the dividend.
“(II) Limitation.—If the aggregate amount of the dividends referred to in subclause (I) for any taxable year exceeds the excess referred to in paragraph (1), the amount treated as tax paid to a foreign country under subclause (I) shall not exceed the amount which would be so treated without regard to this subclause multiplied by a fraction the numerator of which is the excess referred to in paragraph (1) and the denominator of which is the aggregate amount of such dividends.
“(III) Treatment Of Taxes Imposed On 936 Corporation.—For purposes of this clause, taxes paid by any corporation eligible for the credit provided by section 936 to a possession of the United States shall be treated as a withholding tax paid with respect to any dividend paid by such corporation to the extend such taxes would be treated as paid by the corporation receiving the dividend under rules similar to the rules of section 902 (and the amount of any such dividend shall be increased by the amount so treated).
“(IV) Separate Application Of Foreign Tax Credit Limitations.—In determining the alternative minimum foreign tax credit, section 904(d) shall be applied as if dividends from a corporation eligible for the credit provided by section 936 were a separate category of income referred to in a subparagraph of section 904(d)(1).
“(V) Coordination With Limitation
“On 936 Credit.—Any reference in this clause to a dividend received from a corporation eligible for the credit provided by section 936 shall be treated as a reference to the portion of any such dividend for which the dividends received deduction is disallowed under clause (i) after the application of clause (ii)(I).
“(VI) Application To Section 30A Corporations.—References in this clause to section 936 shall be treated as including references to section 30A.
“(iv) Special Rule For Certain Dividends Received By Certain Cooperatives.—In the case of an organization to which part I of subchapter T (relating to tax treatment of cooperatives) applies which is engaged in the marketing of agricultural or horticultural products, clause (i) shall not apply to any amount as a deduction under section 245(c).
“(v) Deduction For Domestic Production.—Clause (i) shall not apply to any amount allowable as a deduction under section 199.
“(vi) Special Rule For Certain Distributions
“From Controlled Foreign Corporations.—Clause (i) shall not apply to any deduction allowable under section 965.
“(D) Certain Other Earnings And Profits Adjustments
“(i) Intangible Drilling Costs.—The adjustments provided in section 312(n)(2)(A) shall apply in the case of amounts paid or incurred in taxable years beginning after December 31, 1989. In the case of a taxpayer other than an integrated oil company (as defined in section 291(b)(4)), in the case of any oil or gas well, this clause shall not apply in the case of amounts paid or incurred in taxable years beginning after December 31, 1992.
“(ii) Certain Amortization Provisions Not To Apply.—Sections 173 and 248 shall not apply to expenditures paid or incurred in taxable year beginning after December 31, 1989.
“(iii) LIFO Inventory Adjustments.—The adjustments provided in section 312(n)(4) shall apply, but only with respect to taxable years beginning after December 31, 1989.
“(iv) Installment Sales.—In the case of any installment sale in a taxable year beginning after December 31, 1989, adjusted current earnings shall be computed as if the corporation did not use the installment method. The preceding sentence shall not apply to the applicable percentage (as determined under section 453A) of the gain from any installment sale with respect to which section 453A(a)(1) applies.
“(E) Disallowance Of Loss On Exchange Of Debt Pools.—No loss shall be recognized on the exchange of any pool of debt obligations for another pool of debt obligations having substantially the same effective interest rates and maturities.
“(F) Depletion
“(i) In General.—The allowance for depletion with respect to any property placed in service in a taxable year beginning after December 31, 1989, shall be cost depletion determined under section 611.
“(ii) Exception For Independent Oil And Gas Producers And Royalty Owners.—Clause (i) (and subparagraph (C)(i)) shall not apply to any deduction for depletion computed in accordance with section 613A(c).
“(G) Treatment Of Certain Ownership Changes.—If—
“(i) there is an ownership change (within the meaning of section 382) after the date of the enactment of the Tax Reform Act of 1986 with respect to any corporation, and
“(ii) there is a net unrealized built-in loss (within the meaning of section 382(h)) with respect to such corporation,
“then the adjusted basis of each asset of such corporation (immediately after the ownership change) shall be its proportionate share (determined on the basis of respective fair market values) of the fair market value of the assets of such corporation (determined under section 382(h)) immediately before the ownership change.
“(H) Adjusted Basis.—The adjusted basis of any property with respect to which an adjustment under this paragraph applies shall be determined by applying the treatment prescribed in this paragraph.
“(I) Treatment Of Charitable Contributions.—Notwithstanding subparagraphs (B) and (C), no adjustment related to the earnings and profits effects of any charitable contribution shall be made in computing adjusted current earnings.
“(5) Other Definitions.—For purposes of paragraph (4)—
“(A) Earnings And Profits.—The term “earnings and profits” means earnings and profits computed for purposes of subchapter C.
“(B) Treatment Of Alternative Minimum Taxable Income.—The treatment of any item for purposes of computing alternative minimum taxable income shall be determined without regard to this subsection.
“(6) Exception For Certain Corporations.—This subsection shall not apply to any S corporation, regulated investment company, real estate investment trust, or REMIC.”
2014 — Subsec. (b)(1)(C)(iii)-(v). Pub. L. 113-295, Div. A, title 221(a)(25)(B), amended subpar. (C) by striking clause (ii) and by redesignating clauses (iii)-(v) as clauses (ii)-(iv), respectively. Before being struck, it read as follows:
“(ii) sections 163(d)(6) and 163(h)(5)) (relating to phase-ins) shall not apply,”.
Subsec. (d)(3). Pub. L. 113-295, Div. A, Sec. 221(a)(30)(C), amended subsec. (d) by striking par. (3). Before being struck, it read as follows:
“(3) Net Operating Loss Attributable To Federally Declared Disasters.—In the case of a taxpayer which has a qualified disaster loss (as defined by section 172(b)(1)(J)) for the taxable year, paragraph (1) shall be applied by increasing the amount determined under subparagraph (A)(ii)(I) thereof by the sum of the carrybacks and carryovers of such loss.”
Subsec. (g)(4)(C)(iv). Pub. L. 113-295, Div. A, Sec. 215(b), amended clause (iv) by substituting “an organization to which part I of subchapter T (relating to tax treatment of cooperatives) applies which is engaged in the marketing of agricultural or horticultural products” for “a cooperative described in section 927(a)(4)”.
Subsec. (g)(4)(F)(ii). Pub. L. 113-295, Div. A, Sec. 221(a)(9), amended clause (ii) by substituting “Clause” for “In the case of any taxable year beginning after December 31, 1992, clause”.
2010--Subsec. (b)(1)(B). Pub. L. 111-148, Sec. 9013(c), amended subpar. (B) by substituting “without regard to subsection (f) of such section” for “10 percent” for “7.5 percent”.
2009--Subsec. (d)(1)(A)(ii)(I). Pub. L. 111-92, Sec. 13(b), amended subpar. (I). Before amendment, it read as follows:
“(I) the amount of such deduction attributable to the sum of carrybacks of net operating losses from taxable years ending during 2001 or 2002 and carryovers of net operating losses to taxable years ending during 2001 and 2002, or”.
Subsec. (b)(1)(E). Pub. L. 111-5, Div. B, Sec. 1008(d), amended subpar. (E) by substituting “subparagraphs (D) and (E) of section 63(c)(1)” for “section 63(c)(1)(D)”.
Subsec. (g)(4)(B)(iv). Pub. L. 111-5, Div. B, Sec. 1503(b), amended subpar. (B) by adding clause (iv).
2008--Subsec. (b)(1)(E). Pub. L. 110-343, Div. C, Sec. 706(b)(3), amended subpar. (E) by adding the sentence at the end.
Subsec. (d)(3). Pub. L. 110-343, Div. C, Sec. 708(c), amended subsec. (D) by adding par. (3).
Subsec. (g)(4)(B)(iii). Pub. L. 110-289, Sec. 3022(a)(2), amended subpar. (B) by adding clause (iii).
2007--Subsec. (g)(4)(C)(ii)(I). Pub. L. 110-172, Sec. 11(g)(1), amended subclause (I) by substituting “921 (as in effect before its repeal by the FSC Repeal and Extraterritorial Income Exclusion Act of 2000)” for “921”.
Subsec. (g)(4)(C)(iv). Pub. L. 110-172, Sec. 11(g)(2), amended clause (iv) by substituting “an organization to which part I of subchapter T (relating to tax treatment of cooperatives) applies which is engaged in the marketing of agricultural or horticultural products” for “a cooperative described in section 927(a)(4)”. Note that the instructions in Pub. L. 110-172, Sec. 11(g)(2) directed that this change be made to Sec. 54(g)(4)(C)(iv), but that Sec. 54(g)(4)(C)(iv) does not exist. It appears to be a typographical error.
2006--Subsec. (c)(2). Pub. L. 109-304, Sec. 17(e)(1)(A), amended par. (2) by substituting “chapter 535 of title 46, United States Code” for “section 607 of the Merchant Marine Act, 1936 (46 U.S.C. 1177)”.
Subsec. (c)(2)(A)-(B). Pub. L. 109-304, Sec. 17(e)(1)(B), amended subpar. (A) and (B) by substituting “such chapter 535” for “such section 607”.
2005--Subsec. (b)(1)(A)(ii). Pub. L. 109-135, Sec. 403(r)(2), amended clause (ii) by inserting “or clause (ii) of section 164(b)(5)(A)" before the period at the end.
Subsec. (d)(1)(A)(i)(II). Pub. L. 109-135, Sec. 403(a)(14), amended subclause (II) by substituting “such deduction and the deduction under section 199” for “such deduction”.
Subsec. (d)(1)(A)(ii)(II). Pub. L. 109-135, Sec. 403(a)(14), amended subclause (II) by substituting “such deduction and the deduction under section 199” for “such deduction”.
Subsec. (a)(1)(B). Pub. L. 109-58, Sec. 1326(d), amended subpar. (B) by inserting “, or in section 168(e)(3)(C)(iv)" before the period.
2004--Subsec. (g)(4)(B)(i). Pub. L. 108-357, Sec. 101(b)(4), amended clause (i) by striking “or 114”.
Subsec. (g)(4)(C)(v). Pub. L. 108-357, Sec. 102(b), amended subpar. (C) by adding clause (v).
Subsec. (g)(4)(C)(vi). Pub. L. 108-357, Sec. 422(b), amended subpar. (C) by adding clause (vi).
Subsec. (g)(6). Pub. L. 108-357, Sec. 835(b)(1), amended par. (6) by substituting “or REMIC” for “REMIC, or FASIT”.
Subsec. (d)(1)(A)(i)(I). Pub. L. 108-311, Sec. 403(b)(4)(A), amended subclause (I) by striking “attributable to carryovers” after “other than the deduction”.
Subsec. (d)(1)(A)(ii)(I). Pub. L. 108-311, Sec. 403(b)(4)(B), amended subclause (I) by substituting “from taxable years” for “for taxable years” and by substituting “carryovers” for “carryforwards”.
2003--Subsec. (g)(4)(B). Pub. L. 108-173, Sec. 1202(b), amended subpar. (B) by inserting “or 139A” after “section 114”.
2002--Subsec. (a)(1)(A). Pub. L. 107-147, Sec. 417(5), amended subpar. (A) by substituting “such section 1250” for “such 1250” in the flush sentence after clause (ii).
Subsec. (d)(1)(A). Pub. L. 107-147, Sec. 102(c)(1), amended subpar. (A). Before amendment it read as follows:
“(A) the amount of such deduction shall not exceed 90 percent of alternate minimum taxable income determined without regard to such deduction, and”.
2000--Subsec. (a)(1)(A)(ii). Pub. L. 106-554, Sec. 314(d), amended clause (ii) by inserting the parenthetical language immediately before “or to any other property”.
2000--Subsec. (g)(4)(B)(i). Pub. L. 106-519, Sec. 4(1), amended clause (i) by adding “or under section 114” before the period.
1998--Subsec. (a)(3). Pub. L 105-277, Sec. 4006(c)(2), amended par. (3) by substituting “section 460(b)(1)” for “section 460(b)(2)” and “section 460(b)(3)” for “section 460(b)(4)”.
1997--Subsec. (a)(1)(A)(i). Pub. L. 105-34, Sec. 402(a), amended clause (I) by adding a sentence at the end.
Subsec. (a)(5). Pub. L. 105-34, Sec. 402(b), amended par. (5) by adding a sentence at the end.
Subsecs. (a)(6)-(8). Pub. L. 105-34, Sec. 403(a), struck par. (6) and redesignated pars. (7) and (8) as pars. (6) and (7) respectively. Prior to amendment it read as follows:
“(6) Installment sales of certain property
In the case of any disposition after March 1, 1986, of any property described in section 1221(1), income from such disposition shall be determined without regard to the installment method under section 453. This paragraph shall not apply to any disposition with respect to which an election is in effect under section 453(l)(2)(B).”
Subsec. (e)(1)(A). Pub. L. 105-34, Sec. 312(d)(1), amended subpar. (A) by substituting “section 121” for “section 1034”.
Subsec. (e)(3)(B)(i). Pub. L. 105-34, Sec. 312(d)(1), amended clause (I) by substituting “section 121” for “section 1034”.
Subsec. (g)(4)(B)(i). Pub. L. 105-34, Sec. 1212(a), amended clause (I) by adding a sentence at the end.
1996--Subsec. (d)(1)(B)(ii). Pub. L. 104-188, Sec. 1702(e)(1)(A), amended clause (ii). Before amendment, clause (ii) read as follows: “(ii) in the case of taxable years beginning after December 31, 1986, section 172(b)(2) shall be applied by substituting “90 percent of alternative minimum taxable income determined without regard to the alternative tax net operating loss deduction” for “taxable income" each place it appears.”
Subsec. (g)(4)(C)(ii). Pub. L. 104-188, Sec. 1601(b)(2)(B), amended clause (ii) by adding “30A” before “936”. Sec. 1601(b)(2)(C), added a new clause (IV) to read as above. Sec. 1702(g)(4), amended subclause (D)(iii) by adding before the period at the end thereof “, but only with respect to taxable years beginning after December 31, 1989”.
Subsec. (g)(4)(C)(iii). Pub. L. 104-188, Sec. 1601(b)(2)(C), Added at the end a new subclause (VI).
Subsec. (g)(6). Pub. L. 104-188, Sec. 1621(b)(2), struck “or REMIC” in subsec. (g)(6), and inserted “REMIC, or FASIT”,
Subsec. (g)(4). Pub. L. 104-188, Sec. 1702(c)(1), redesignated subparagraphs (I) and (J) as subparagraphs (H) and (I).
Subsec. (g)(4)(D)(iii). Pub. L. 104-188, Sec. 1702(g)(4), inserted “, but only with respect to taxable years beginning after December 31. 1989” before the period at the end thereof.
Sec. (g)(4)(C)(ii)(II). Pub. L. 104-188, Sec. 1704(t)(1), struck “of the subclause” and inserted “of subclause”.
1993--Subsec. (g)(4)(A)(i). Pub. L. 103-66, Section 13115(a) amended clause (i) by adding at the end thereof the following new sentence: “The preceding sentence shall not apply to any property placed in service after December 31, 1993, and the depreciation deduction with respect to such property shall be determined under the rules of subsection (a)(1)(A).”.
Subsec. (g)(4)(C)(ii)(I). Pub. L. 103-66, Section 13227(c)(1), amended subclause (I) by striking “sections 936 and 921” and inserting “sections 936 (including subsections (a)(4) and (i) thereof) and 921”.
Subsec. (g)(4)(C)(iii). Pub. L. 103-66, Section 13227(c)(2), amended clause (iii) by adding at the end thereof new subclauses (IV) and (V).
Subsec. (g)(4)(J). Pub. L. 103-66, Section 13171(b), amended paragraph (4) by adding at the end thereof a new subparagraph (J).
1992--Subsec. (d)(1)(A). Pub. L. 102-486, Section 1915(c) amended and revised section 56(d)(1)(A), which prior to amendment read as follows:
“(A) the amount of such deduction shall not exceed the excess (if any) of --
“(i) 90 percent of alternative minimum taxable income determined without regard to such deduction and the deduction under subsection (h), over
“(ii) the deduction under subsection (h), and”
Subsec. (g)(4)(D)(i). Pub. L. 102-486, Section 1915(b), amended clause (i) by adding at the end a new sentence.
Subsec. (g)(4)(D)(i). Pub. L. 102-486, Sec. 1915(b)(2), added at the end a new sentence.
Subsec. (g)(4)(F). Pub. L. 102-486, Section 1915(a) amended subparagraph (F) by revising the format and adding clause (ii). Prior to amendment subparagraph (F) read as follows:
“(F) DEPLETION. The allowance for depletion with respect to any property placed in service in a taxable year beginning after 1989 shall be cost depletion determined under section 611.”
Subsec. (h). Pub. L. 102-486, Section 1915(c)(1), struck subsection (h), which prior to being stricken read as follows:
“(h) ADJUSTMENT BASED ON ENERGY PREFERENCES.
“(1) In general.
“In computing the alternative minimum taxable income of any taxpayer other than an integrated oil company for any taxable year beginning after 1990, there shall be allowed as a deduction an amount equal to the lesser of--
“(A) the alternative tax energy preference deduction, or
“(B) 40 percent of alternative minimum taxable income.
“(2) Phase-out of deduction as oil prices increase.
“The amount of the deduction under paragraph (1) (determined without regard to this paragraph) shall be reduced (but not below zero) by the amount which bears the same ratio to such amount as--
“(A) the excess of the reference price of crude oil for the calendar year preceding the calendar year in which the taxable year begins over $28, bears to
“(B) $6.
“For purposes of this paragraph, the reference price for any calendar year shall be determined under section 29(d)(2)(C) and the $28 amount under subparagraph (A) shall be adjusted at the same time and in the same manner as under section 43(b)(3).
“(3) Alternative tax energy preference deduction.
“For purposes of paragraph (1), the term “alternative tax energy preference deduction” means an amount equal to the sum of--
“(A) in the case of the intangible drilling cost preference, an amount equal to the sum of--
“(i) 75 percent of the portion of the intangible drilling cost preference attributable to qualified exploratory costs, plus
“(ii) 15 percent of the excess (if any) of--
“(I) the intangible drilling cost preference, over
“(II) the portion of the intangible drilling cost preference attributable to qualified exploratory costs, plus
“(B) 50 percent of the marginal production depletion preference.
“(4) Intangible drilling cost preference.
“For purposes of this subsection--
“(A) In general.
“The term “intangible drilling cost preference” means the amount by which alternative minimum taxable income would be reduced if it were computed without regard to section 57(a)(2) and subsection (g)(4)(D)(i).
“(B) Portion attributable to qualified exploratory costs.
“For purposes of subparagraph (A), the portion of the intangible drilling cost preference attributable to qualified exploratory costs is an amount which bears the same ratio to the intangible drilling cost preference as--
“(i) the qualified exploratory costs of the taxpayer for the taxable year, bear to
“(ii) the total intangible drilling and development costs with respect to which the taxpayer may make an election under section 263(c) for the taxable year.
“(5) Marginal production depletion preference.
“For purposes of this subsection, the term “marginal production depletion preference” means the amount by which alternative minimum taxable income would be reduced if it were computed as if section 57(a)(1) and subsection (g)(4)(G) did not apply to any allowance for depletion determined under section 613A(c)(6).
“(6) Qualified exploratory costs.
“For purposes of this subsection--
“(A) In general.
“The term “qualified exploratory costs” means intangible drilling and development costs of a taxpayer other than an integrated oil company which--
“(i) the taxpayer may elect to deduct as expenses under section 263(c), and
“(ii) are paid or incurred in connection with the drilling of an exploratory well located in the United States (within the meaning of section 638(l)).
“(B) Exploratory well.
“The term “exploratory well" means any of the following oil or gas wells:
“(i) An oil or gas well which is completed (or if not completed, with respect to which drilling operations cease) before the completion of any other well which--
“(I) is located within 1.25 miles from the well, and
“(II) is capable of production in commercial quantities.
“(ii) An oil or gas well which is not described in clause (i) but which has a total depth which is at least 800 feet below the deepest completion depth of any well within 1.25 miles which is capable of production in commercial quantities.
“(iii) An oil or gas well capable of production in commercial quantities which is not described in clause (i) or (ii) but which is completed into a new reservoir, except that this clause shall not apply to a gas well if the gas is produced (or to be produced) from Devonian shale, coal seams, or a tight formation (determined in a manner similar to the manner under section 29(c)(2)).
“A well shall not treated as an exploratory well unless the operator submits to the Secretary (at such time and in such manner as the Secretary may provide) a certification from a petroleum engineer that the well is described in one of the preceding clauses.
“(C) Certain costs not included.
“The term “qualified exploratory costs” shall not include any cost paid or incurred--
“(i) in constructing, acquiring, transporting, erecting, or installing an offshore platform, or
“(ii) with respect to the drilling of a well from an offshore platform unless it is the first well which penetrates a reservoir.
“(D) Integrated oil company.
“For purposes of this paragraph, the term “integrated oil company” means, with respect to any taxable year, any producer of crude oil to whom subsection (c) of section 613A does not apply by reason of paragraph (2) or (4) of section 613A(d).
“(7) Special rules.
“(A) Alternative minimum taxable income.
“For purposes of paragraphs (1)(B), (4)(A), and (5), alternative minimum taxable income shall be determined without regard to the deduction allowable under this subsection and the alternative tax net operating loss deduction under subsection (a)(4).
“(B) Geothermal deposits.
“For purposes of this subsection, intangible drilling and development costs shall not include costs with respect to wells drilled for any geothermal deposits (as defined in section 613(e)(3)).
“(8) Regulations
“The Secretary may by regulation provide for appropriate adjustments in computing alternative minimum taxable income or adjusted current earnings for any taxable year following a taxable year for which a deduction was allowed under this subsection to ensure that no double benefit is allowed by reason of such deduction.”
1990--Subsec. (a)(1)(D). Pub. L. 101-508, Sec. 11812(b)(4), substituted ‘section 168(i)(10)’ for ‘section 167(l)(3)(A)’.
Subsec. (b)(1)(F). Pub. L. 101-508, Sec. 11103(b), added subpar. (F). Sec. 1704(t)(1), struck “of the subclause”, and inserted “of subclause” in subclause (ii)(II).
Subsec. (b)(3). Pub. L. 101-508, Sec. 11801(c)(9)(G), as amended by Pub. L. 104-188, Sec. 1702(h)(12), substituted ‘section 422’ for ‘section 422A’ and ‘Section 422(c)(2)’ for ‘Section 422A(c)(2)’.
Subsec. (c)(1). Pub. L. 101-508, Sec. 11801(c)(2)(A), substituted heading for one which read: ‘Adjustment for book income or adjusted current earnings’ and amended text generally. Prior to amendment, text read as follows:
‘(A) Book income adjustment. — For taxable years beginning in 1987, 1988, and 1989, alternative minimum taxable income shall be adjusted as provided under subsection (f).
‘(B) Adjusted current earnings. — For taxable years beginning after 1989, alternative minimum taxable income shall be adjusted as provided under subsection (g).’
Subsec. (d)(1)(A). Pub. L. 101-508, Sec. 11531(b)(1), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: ‘the amount of such deduction shall not exceed 90 percent of alternative minimum taxable income determined without regard to such deduction, and’.
Subsec. (f). Pub. L. 101-508, Sec. 11801(a)(3), struck out subsec. (f) which related to adjustments for book income of corporations with respect to minimum taxable income, adjusted net book income, adjustments for certain taxes, special rules for related corporations for consolidated returns, treatment of dividends, statements covering different periods, special rule for cooperatives, treatment and limitation of taxes on dividends from 936 corporations, rules for Alaska native corporations, special rules for life insurance companies, exclusion of certain income from transfer of stock for debt, secretarial authority to adjust items, applicable financial statements, earnings and profits used, special rules for more than one statement and exception for certain corporations.
Subsec. (g)(1), (2)(A). Pub. L. 101-508, Sec. 11801(c)(2)(B), as amended by Pub. L. 104-188, Sec. 1704(t)(48), struck ‘beginning after 1989’ in pars. (1) and (2)(A).
Subsec. (g)(4). Pub. L. 101-508, Sec. 11301(b), struck paragraph (F) and redesignated subparagraphs (G) and (H) as subparagraphs (F) and (G).
Subsec. (g)(4)(C)(iii). Pub. L. 101-508, Sec. 11801(c)(2)(C), substituted heading for one which read: ‘Special rule for dividends from section 936 companies’ and amended text generally. Prior to amendment, text read as follows: ‘In the case of any dividend received from a corporation eligible for the credit provided by section 936, rules similar to the rules of subparagraph (F) of subsection (f)(1) shall apply, except that ‘75 percent’ shall be substituted for ‘50 percent’ in clause (i) thereof.'
Subsec. (g)(4)(D)(ii). Pub. L. 101-508, Sec. 11704(a)(1), substituted ‘years’ for ‘year’.
Subsec. (g)(4)(F) to (H). Pub. L. 101-508, Sec. 11301(b), redesignated subpars. (G) and (H) as (F) and (G), respectively, and struck out former subpar. (F) which provided that acquisition expenses for life insurance companies be capitalized and amortized in accordance with the treatment generally required under generally accepted accounting principles as if this subparagraph applied to all taxable years.
Subsec. (h). Pub. L. 101-508, Sec. 11531(a), added subsec. (h).
1989--Subsec. (a)(3). Pub. L. 101-239, Sec. 7815(e)(2)(B), substituted ‘The first sentence of this paragraph shall not’ for ‘The preceding sentence shall not’.
Pub. L. 101-239, Sec. 7815(e)(2)(A), made clarifying amendment to directory language of Pub. L. 100-647, Sec. 5041(b)(4), see 1988 Amendment note below.
Pub. L. 101-239, Sec. 7612(c)(1), struck out ‘with respect to which the requirements of clauses (i) and (ii) of section 460(e)(1)(B) are met’ after ‘section 460(e)(6))’.
Subsec. (b)(2)(D). Pub. L. 101-239, Sec. 7612(d)(1), added subpar. (D).
Subsec. (b)(3). Pub. L. 101-239, Sec. 7811(d)(3), inserted after first sentence ‘Section 422A(c)(2) shall apply in any case where the disposition and the inclusion for purposes of this part are within the same taxable year and such section shall not apply in any other case.’ and substituted ‘this paragraph’ for ‘the preceding sentence’ in last sentence.
Subsec. (g)(4)(A)(i). Pub. L. 101-239, Sec. 7611(a)(1)(A), amended cl. (i) generally. Prior to amendment cl. (i) read as follows: ‘The depreciation deduction with respect to any property placed in service in a taxable year beginning after 1989 shall be determined under whichever of the following methods yields deductions with a smaller present value:
‘(I) The alternative system of section 168(g), or
‘(II) The method used for book purposes.’
Subsec. (g)(4)(A)(iii). Pub. L. 101-239, Sec. 7611(a)(2), inserted ‘and which is placed in service in a taxable year beginning before 1990’ after ‘thereof) applies’.
Subsec. (g)(4)(A)(v) to (vii). Pub. L. 101-239, Sec. 7611(a)(1)(B), redesignated cl. (vii) as (v), and struck out former cl. (v), which related to use of slower method if used for book purposes, and cl. (vi), which related to election to have cumulative limitation.
Subsec. (g)(4)(B)(i). Pub. L. 101-239, Sec. 7611(f)(2), inserted at end ‘The preceding sentence shall not apply in the case of any amount excluded from gross income under section 108 (or the corresponding provisions of prior law).’
Subsec. (g)(4)(B)(iii). Pub. L. 101-239, Sec. 7611(f)(3), repealed cl. (iii) which read as follows: ‘In the case of any annuity contract, the income on such contract (as determined under section 72(u)(2)) shall be treated as includible in gross income for such year. The preceding sentence shall not apply to any annuity contract which is held under a plan described in section 403(a) or which is described in section 72(u)(3)(C).’
Subsec. (g)(4)(C)(ii). Pub. L. 101-239, Sec. 7611(d), amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: ‘Clause (i) shall not apply to any deduction allowable under section 243 or 245 for a 100-percent dividend -
‘(I) if the corporation receiving such dividend and the corporation paying such dividend could not be members of the same affiliated group under section 1504 by reason of section 1504(b),
‘(II) but only to the extent such dividend is attributable to income of the paying corporation which is subject to tax under this chapter (determined after the application of sections 936 and 921).
For purposes of the preceding sentence, the term ‘100 percent dividend’ means any dividend if the percentage used for purposes of determining the amount allowable as a deduction under section 243 or 245 with respect to such dividend is 100 percent.'
Subsec. (g)(4)(C)(iv). Pub. L. 101-239, Sec. 7611(e), added cl. (iv).
Subsec. (g)(4)(D). Pub. L. 101-239, Sec. 7611(b), amended subpar. (D) generally, in cl. (i), substituting provisions directing that adjustments in section 312(n)(2)(A) be applied, for provisions directing adjustments in section 312(n) be applied, with certain exceptions, in cl. (ii), substituting provisions directing that sections 173 and 248 not apply to expenditures paid or incurred in taxable years beginning after December 31, 1989, for material relating to special rule for intangible drilling costs and mineral exploration and development costs, and adding cls. (iii) and (iv).
Subsec. (g)(4)(D)(i)(IV), (V). Pub. L. 101-239, Sec. 7815(e)(4), added subcl. (IV) relating to inapplicability of pars. (6) to (8) and struck out former subcls. (IV) and (V), which read as follows:
‘(IV) paragraph (6) shall apply only to contracts entered into on or after March 1, 1986, and
‘(V) paragraphs (7) and (8) shall not apply.’
Subsec. (g)(4)(G). Pub. L. 101-239, Sec. 7611(c), amended subpar. (G) generally. Prior to amendment, subpar. (G) read as follows: ‘The allowances for depletion with respect to any property placed in service in a taxable year beginning after 1989, shall be determined under whichever of the following methods yields deductions with a smaller present value:
‘(i) cost depletion determined under section 611, or
‘(ii) the method used for book purposes.’
Subsec. (g)(4)(H). Pub. L. 101-239, Sec. 7205(b), added cl. (ii) and concluding provision and struck out former cl. (ii) and concluding provision which read as follows:
‘(ii)(I) the aggregate adjusted bases of the assets of such corporation (immediately after the change), exceed
‘(II) the value of the stock of such corporation (as determined for purposes of section 382), properly adjusted for liabilities and other relevant items, then the adjusted basis of each asset of such corporation (as of such time) shall be its proportionate share (determined on the basis of respective fair market values) of the amount referred to in clause (ii)(II).’
Subsec. (g)(4)(H)(i). Pub. L. 101-239, Sec. 7611(f)(1), substituted ‘in a taxable year beginning after 1989’ for ‘after the date of the enactment of the Tax Reform Act of 1986’.
Subsec. (g)(5)(A). Pub. L. 101-239, Sec. 7611(f)(4), redesignated subpar. (B) as (A) and struck out former subpar. (A) which defined ‘book purposes’.
Subsec. (g)(5)(B). Pub. L. 101-239, Sec. 7611(f)(4), redesignated subpar. (D) as (B). Former subpar. (B) redesignated (A).
Subsec. (g)(5)(C). Pub. L. 101-239, Sec. 7611(f)(4), struck out subpar. (C) which read as follows: ‘Present value. - Present value shall be determined as of the time the property is placed in service (or, if later, as of the beginning of the first taxable year beginning after 1989) and under regulations prescribed by the Secretary.’
Subsec. (g)(5)(D). Pub. L. 101-239, Sec. 7611(f)(4), redesignated subpar. (D) as (B).
1988--Subsec. (a)(1)(A)(i). Pub. L. 100-647, Sec. 1007(b)(15), substituted ‘personal’ for ‘real’ in heading.
Subsec. (a)(1)(C)(i). Pub. L. 100-647, Sec. 1002(a)(12), inserted ‘by reason of section 203, 204, or 251(d) of such Act’ after ‘do not apply’.
Subsec. (a)(3). Pub. L. 100-647, Sec. 5041(b)(4), as amended by Pub. L. 101-239, Sec. 7815(e)(2)(A), inserted at end ‘The preceding sentence shall not apply to any home construction contract (as defined in section 460(e)(6)) with respect to which the requirements of clauses (i) and (ii) of section 460(e)(1)(B) are met.’
Pub. L. 100-647, Sec. 1007(b)(1), inserted at end ‘For purposes of the preceding sentence, in the case of a contract described in section 460(e)(1), the percentage of the contract completed shall be determined under section 460(b)(2) by using the simplified procedures for allocation of costs prescribed under section 460(b)(4).’
Subsec. (a)(8). Pub. L. 100-647, Sec. 1007(b)(19), added par. (8).
Subsec. (b)(1). Pub. L. 100-647, Sec. 1007(b)(16), struck out ‘itemized’ after ‘Limitation on’ in heading.
Subsec. (b)(1)(C)(ii). Pub. L. 100-647, Sec. 2004(b)(2), substituted ‘163(h)(5)’ for ‘163(h)(6)’.
Subsec. (b)(1)(C)(iii). Pub. L. 100-647, Sec. 1007(b)(4), substituted ‘specified private activity bond’ for ‘specified activity bond’ before ‘under’, and ‘57(a)(5)(B)’ for ‘56(a)(5)(B)’.
Subsec. (b)(1)(C)(iv), (v). Pub. L. 100-647, Sec. 1007(b)(3), added cls. (iv) and (v).
Subsec. (b)(1)(E). Pub. L. 100-647, Sec. 1007(b)(2), substituted ‘and deduction for personal exemptions not allowed’ for ‘not allowed’ in heading and amended text generally. Prior to amendment, text read as follows: ‘The standard deduction provided in section 63(c) shall not be allowed.’
Subsec. (b)(3). Pub. L. 100-647, Sec. 1007(b)(14)(A), added par. (3).
Subsec. (c)(1). Pub. L. 100-647, Sec. 1007(b)(13)(A), substituted ‘adjusted current earnings’ for ‘adjusted earnings and profits’ in heading.
Subsec. (c)(1)(B). Pub. L. 100-647, Sec. 1007(b)(13)(B), substituted ‘Adjusted current earnings’ for ‘Adjusted earnings and profits’ in heading.
Subsec. (d)(2)(A). Pub. L. 100-647, Sec. 1007(b)(5), struck out ‘(other than subsection (a)(6) thereof)’ after ‘for such year’ in cl. (ii) and inserted sentence at end providing that an item of tax preference shall be taken into account under clause (ii).
Subsec. (e)(1). Pub. L. 100-647, Sec. 2004(b)(3)(A), substituted ‘improving’ for ‘rehabilitating’ in introductory text.
Pub. L. 100-647, Sec. 1007(b)(6)(A)(i), inserted ‘qualified residence interest (as defined in section 163(h)(3)) and is’ after ‘interest which is’ in introductory text.
Subsec. (e)(1)(A). Pub. L. 100-647, Sec. 2004(b)(3)(B), struck out ‘or is paid’ after ‘accrues’.
Subsec. (e)(1)(B). Pub. L. 100-647, Sec. 1007(b)(6)(A)(ii), substituted ‘section 163(h)(4)’ for ‘section 163(h)(3)’.
Subsec. (e)(3). Pub. L. 100-647, Sec. 1007(b)(6)(B), substituted ‘interest which is qualified residence interest (as defined in section 163(h)(3)) and is paid or accrued’ for ‘interest paid or accrued’.
Subsec. (f)(2)(B). Pub. L. 100-647, Sec. 2001(c)(3)(A), inserted at end ‘No adjustment shall be made under this subparagraph for the tax imposed by section 59A.’
Pub. L. 100-647, Sec. 1007(b)(7), inserted ‘(otherwise eligible for the credit provided by section 901 without regard to section 901(j))’ after ‘any such taxes’.
Subsec. (f)(2)(F). Pub. L. 100-647, Sec. 1007(b)(11)(A), substituted ‘Treatment of taxes on dividends from 936 corporations’ for ‘Treatment of dividends from 936 corporations’ in heading and amended text generally, substituting cls. (i) to (iii) for former cls. (i) and (ii).
Subsec. (f)(2)(I), (J). Pub. L. 100-647, Sec. 6303(a), added subpar. (I) and redesignated former subpar. (I) as (J).
Subsec. (f)(3)(A)(iii). Pub. L. 100-647, Sec. 1007(b)(8), inserted ‘for a substantial nontax purpose’ after ‘an income statement’.
Subsec. (f)(3)(B). Pub. L. 100-647, Sec. 1007(b)(9), substituted ‘this subsection’ for ‘paragraph (3)(A)’ in penultimate sentence.
Subsec. (f)(3)(C). Pub. L. 100-647, Sec. 1007(b)(10), inserted at end ‘If the taxpayer has 2 or more statements described in the clause (or subclause) with the lowest number designation, the applicable financial statement shall be the one of such statements specified in regulations.’
Subsec. (g)(4)(A)(vi), (vii). Pub. L. 100-647, Sec. 1007(b)(17), added cls. (vi) and (vii).
Subsec. (g)(4)(B)(iii). Pub. L. 100-647, Sec. 6079(a)(1), amended last sentence generally, inserting ‘which is’ after ‘any annuity contract’ and ‘or which is described in section 72(u)(3)(C)’ after ‘in section 403(a)’.
Pub. L. 100-647, Sec. 1007(b)(12), inserted at end ‘The preceding sentence shall not apply to any annuity contract held under a plan described in section 403(a).’
Subsec. (g)(4)(C)(iii). Pub. L. 100-647, Sec. 1007(b)(11)(B), substituted ‘clause (i)’ for ‘clause (ii)(I)’.
Subsec. (g)(4)(I). Pub. L. 100-647, Sec. 1007(b)(18), added subpar. (I).
1987--Subsec. (a)(6). Pub. L. 100-203, Sec. 10202(d), amended par. (6) generally. Prior to amendment, par. (6) read as follows: ‘In the case of any —
‘(A) disposition after March 1, 1986, of property described in section 1221(1), or
‘(B) other disposition if an obligation arising from such disposition would be an applicable installment obligation (as defined in section 453C(e)) to which section 453C applies, income from such disposition shall be determined without regard to the installment method under section 453 or 453A and all payments to be received for the disposition shall be deemed received in the taxable year of the disposition. This paragraph shall not apply to any disposition with respect to which an election is in effect under section 453C(e)(4).’
Subsec. (f)(2)(H), (I). Pub. L. 100-203, Sec. 10243(a), added subpar. (H) and redesignated former subpar. (H) as (I).
EFFECTIVE DATE OF 2018 AMENDMENTS
Amendments by Pub. L. 115-141, Sec. 401(b)(7)–(8), effective March 23, 2018.
Sec. 401(e) of Pub. L. 115-141, Div. U, provided the following savings provision:
“(e) General Savings Provision With Respect To Deadwood Provisions.—If—
“(1) any provision amended or repealed by the amendments made by subsection (b) or (d) applied to—
“(A) any transaction occurring before the date of the enactment of this Act,
“(B) any property acquired before such date of enactment, or
“(C) any item of income, loss, deduction, or credit taken into account before such date of enactment, and
“(2) the treatment of such transaction, property, or item under such provision would (without regard to the amendments or repeals made by such subsection) affect the liability for tax for periods ending after such date of enactment,
“nothing in the amendments or repeals made by this section shall be construed to affect the treatment of such transaction, property, or item for purposes of determining liability for tax for periods ending after such date of enactment.”
EFFECTIVE DATE OF 2017 AMENDMENTS
Amendment by Pub. L. 115-97, Sec. 11027(b), effective taxable years beginning after December 31, 2017.
Amendments by Pub. L. 115-97, Sec. 12001(b), effective taxable years beginning after December 31, 2017.
EFFECTIVE DATE OF 2014 AMENDMENTS
Amendments by Pub. L. 113-295, Div. A, Sec. 221(a), effective on the date of the enactment of this Act [Enacted: Dec. 19, 2014].
Section 221(b)(2) of Pub. L. 113-295, Div. A, provided the following Savings Provision:
“(2) SAVINGS PROVISION.—If—
“(A) any provision amended or repealed by the amendments made by this section applied to—
“(i) any transaction occurring before the date of the enactment of this Act [Enacted: Dec. 19, 2014],
“(ii) any property acquired before such date of enactment, or
“(iii) any item of income, loss, deduction, or credit taken into account before such date of enactment, and
“(B) the treatment of such transaction, property, or item under such provision would (without regard to the amendments or repeals made by this section) affect the liability for tax for periods ending after date of enactment, nothing in the amendments or repeals made by this section shall be construed to affect the treatment of such transaction, property, or item for purposes of determining liability for tax for periods ending after such date of enactment.”
Amendment by Pub. L. 113-295, Div. A, Sec. 215(b), effective as if included in the provision of the Tax Technical Corrections Act of 2007 to which it relates.
EFFECTIVE DATE OF 2010 AMENDMENTS
Amendment by Sec. 9013(c) of Pub. L. 111-148 effective for taxable years beginning after December 31, 2012.
EFFECTIVE DATE OF 2009 AMENDMENTS
Amendment by Sec. 13(b) of Pub. L. 111-92 effective for taxable years ending after December 31, 2002.
Sec. 13(e)(4) of Pub. L. 111-92 provided the following transitional rule:
“(4) TRANSITIONAL RULE.—In the case of any net operating loss (or, in the case of a life insurance company, any loss from operations) for a taxable year ending before the date of the enactment of this Act—
“(A) any election made under section 172(b)(3) or 810(b)(3) of the Internal Revenue Code of 1986 with respect to such loss may (notwithstanding such section) be revoked before the due date (including extension of time) for filing the return for the taxpayer's last taxable year beginning in 2009, and
“(B) any application under section 6411(a) of such Code with respect to such loss shall be treated as timely filed if filed before such due date.”
Sec. 13(f) of Pub. L. 111-92 provided the following exception:
“(f) EXCEPTION FOR TARP RECIPIENTS.—The amendments made by this section shall not apply to—
“ (1) any taxpayer if—
“(A) the Federal Government acquired before the date of the enactment of this Act an equity interest in the taxpayer pursuant to the Emergency Economic Stabilization Act of 2008,
“(B) the Federal Government acquired before such date of enactment any warrant (or other right) to acquire any equity interest with respect to the taxpayer pursuant to the Emergency Economic Stabilization Act of 2008, or
“(C) such taxpayer receives after such date of enactment funds from the Federal Government in exchange for an interest described in subparagraph (A) or (B) pursuant to a program established under title I of division A of the Emergency Economic Stabilization Act of 2008 (unless such taxpayer is a financial institution (as defined in section 3 of such Act) and the funds are received pursuant to a program established by the Secretary of the Treasury for the stated purpose of increasing the availability of credit to small businesses using funding made available under such Act), or
“(2) the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, and
“(3) any taxpayer which at any time in 2008 or 2009 was or is a member of the same affiliated group (as defined in section 1504 of the Internal Revenue Code of 1986, determined without regard to subsection (b) thereof) as a taxpayer described in paragraph (1) or (2).”
Amendment by Div. B, Sec. 1008(d), of Pub. L. 111-5 effective for purchases on or after the date of the enactment of this Act [Enacted: Feb. 17, 2009] in taxable years ending after such date.
Amendment by Div. B, Sec. 1503(b) of Pub. L. 111-5 effective obligations issued after December 31, 2008.
EFFECTIVE DATE OF 2008 AMENDMENTS
Amendment by Div. C, Sec. 706(b)(3) of Pub. L. 110-343 effective for disasters declared in taxable years beginning after December 31, 2007.
Amendment by Div. C, Sec. 708(c) of Pub. L. 110-343 effective for losses arising in taxable years beginning after December 31, 2007, in connection with disasters declared after such date.
Amendment by Section 3022(a)(2) of Pub. L. 110-289 effective for bonds issued after the date of the enactment of this Act [Enacted: July 30, 2008].
EFFECTIVE DATE OF 2007 AMENDMENTS
Amendments by Section 11(g)(1)-(2) of Pub. L. 110-172 effective on the date of the enactment of this Act [Enacted: Dec. 29, 2007].
EFFECTIVE DATE OF 2006 AMENDMENTS
Amendments by Section 17(e)(1) of Pub. L. 109-135 effective on the date of the enactment of this Act [Enacted: Oct. 6, 2006].
EFFECTIVE DATE OF 2005 AMENDMENTS
Amendment by Section 403(r)(2) of Pub. L. 109-135 effective as if included in the provisions of the American Jobs Creation Act of 2004 [Pub. L. 108-357, Sec. 501] to which it relates.
Amendments by Section 403(a)(14) of Pub. L. 109-135 effective as if included in the provisions of the American Jobs Creation Act of 2004 [Pub. L. 108-357, Sec. 102] to which they relate.
Amendment by Section 1326(d) of Pub. L. 109-58 effective for property placed in service after April 11, 2005. Sec. 1326(e)(2) of Pub. L. 109-58 provided the following exception:
“(2) EXCEPTION. — The amendments made by this section shall not apply to any property with respect to which the taxpayer or a related party has entered into a binding contract for the construction thereof on or before April 11, 2005, or, in the case of self-constructed property, has started construction on or before such date.”
EFFECTIVE DATE OF 2004 AMENDMENTS
Amendment by Section 101(b)(4) of Pub. L. 108-357 effective for transactions after December 31, 2004. Section 101(d)-(f), as amended by Pub. L. 113-295, Div. A, Sec. 219(a), provided the following rules:
“(d) TRANSITIONAL RULE FOR 2005 AND 2006—
“(1) IN GENERAL— In the case of transactions during 2005 or 2006, the amount includible in gross income by reason of the amendments made by this section shall not exceed the applicable percentage of the amount which would have been so included but for this subsection.
“(2) APPLICABLE PERCENTAGE— For purposes of paragraph (1), the applicable percentage shall be as follows:
“(A) For 2005, the applicable percentage shall be 20 percent.
“(B) For 2006, the applicable percentage shall be 40 percent.
“(3) COORDINATION WITH SECTION 199.—This subsection shall be applied without regard to any deduction allowable under section 199.
“(e) REVOCATION OF ELECTION TO BE TREATED AS DOMESTIC CORPORATION— If, during the 1-year period beginning on the date of the enactment of this Act, a corporation for which an election is in effect under section 943(e) of the Internal Revenue Code of 1986 revokes such election, no gain or loss shall be recognized with respect to property treated as transferred under clause (ii) of section 943(e)(4)(B) of such Code to the extent such property—
“(1) was treated as transferred under clause (i) thereof, or
“(2) was acquired during a taxable year to which such election applies and before May 1, 2003, in the ordinary course of its trade or business.
“The Secretary of the Treasury (or such Secretary's delegate) may prescribe such regulations as may be necessary to prevent the abuse of the purposes of this subsection.
“(f) BINDING CONTRACTS— The amendments made by this section shall not apply to any transaction in the ordinary course of a trade or business which occurs pursuant to a binding contract—
“(1) which is between the taxpayer and a person who is not a related person (as defined in section 943(b)(3) of such Code, as in effect on the day before the date of the enactment of this Act), and
“(2) which is in effect on September 17, 2003, and at all times thereafter.
“For purposes of this subsection, a binding contract shall include a purchase option, renewal option, or replacement option which is included in such contract and which is enforceable against the seller or lessor.”
Amendment by Section 102(b) of Pub. L. 108-357 effective for taxable years beginning after December 31, 2004.
Amendment by Section 422(b) of Pub. L. 108-357 effective for taxable years ending on or after the date of the enactment of this Act [Enacted: Oct. 22, 2004].
Amendment by Section 835(b)(1) of Pub. L. 108-357 effective on January 1, 2005. Section 835(c)(2) of Pub. L. 108-357 provided the following rule:
(2) EXCEPTION FOR EXISTING FASITS— Paragraph (1) shall not apply to any FASIT in existence on the date of the enactment of this Act to the extent that regular interests issued by the FASIT before such date continue to remain outstanding in accordance with the original terms of issuance.”
Amendments by Section 403(b)(4) of Pub. L. 108-311 effective as if included in the provisions [Sec. 102(c)] of the Job Creation and Worker Assistance Act of 2002 to which they relate [net operating losses for taxable years beginning after December 31, 1990].
EFFECTIVE DATE OF 2003 AMENDMENT
Amendment by Section 1202(b) of Pub. L. 108-173 effective for taxable years ending after the date of the enactment of this Act [Enacted: Dec. 8, 2003].
EFFECTIVE DATE OF 2002 AMENDMENTS
Section 102(c)(2) of Pub. L. 107-147, as amended by Pub. L. 108-311, Sec. 403(b)(3), provided that the amendment made by this section shall be applicable to taxable years ending after December 31, 1990.
Amendment by Section 417(5) of Pub. L. 107-147 effective on the date of the enactment of this Act [enacted: Mar. 9, 2002].
EFFECTIVE DATE OF 2000 AMENDMENTS
Amendment by section 4(1) of Pub. L. 106-519 effective generally for transactions after September 30, 2000.
Amendment by section 314(d) of Pub. L. 106-554 effective as if included in the provisions of the 1997 Taxpayer Relief Act to which it relates.
EFFECTIVE DATE OF 1998 AMENDMENTS
Amendments by section 4006(c)(2) of Pub. L. 105-277 effective on the date of the enactment of this Act [enacted: Oct. 21, 1998].
EFFECTIVE DATE OF 1997 AMENDMENTS
Amendment by section 312(d)(1) of Pub. L. 105-34 effective for sales and exchanges after May 6, 1997. For special rules, see section 312(d)[e] as set out in section 121.
Amendment by section 403(a) of Pub. L. 105-34 effective for dispositions in taxable years beginning after December 31, 1987. Section 403(b) of Pub. L. 105-34 provided the following special rule:
“(2) Special rule for 1987—
In the case of taxable years beginning in 1987, the last sentence of section 56(a)(6) of the Internal Revenue Codeof 1986 (as in effect for such taxable years) shall be applied by inserting “or in the case of a taxpayer using the cash receipts and disbursements method of accounting, any disposition described in section 453C(e)(1)(B)(ii)” after “section 453C(e)(4)”.”
Amendment by section 1212(a) of Pub. L. 105-34 effective for taxable years beginning after December 31, 1997.
EFFECTIVE DATE OF 1996 AMENDMENTS
Sec. 1601(c) of Pub. L. 104-188, provided that:
“In general.—Except as provided in paragraph (2), the amendments made by this section shall apply to taxable years beginning after December 31, 1995.
(2) Special rule for qualified possession source investment income.—The amendments made by this section shall not apply to qualified possession source investment income received or accrued before July 1, 1996, without regard to the taxable year in which received or accrued.
(3) Special transition rule for payment of estimated tax installment.—In determining the amount of any installment due under section 6655 of the Internal Revenue Code of 1986 after the date of the enactment of this Act [Aug. 20, 1996] and before October 1, 1996, only 1/2 of any increase in tax (for the taxable year for which such installment is made) by reason of the amendments made by subsections (a) and (b) shall be taken into account. Any reduction in such installment by reason of the preceding sentence shall be recaptured by increasing the next required installment for such year by the amount of such reduction.”
Sec. 1601(c)(2)-(3) of Pub. L. 104-188, provided that:
“(2) Special Rule for Qualified Possession Source Investment Income. The amendments made by this section shall not apply to qualified possession source investment income received or accrued before July 1, 11996, without regard to the taxable year in which received or accrued.
(3) Special Transition Rule for Payment of Estimated Tax Installment. In determining the amount of any installment due under section 6655 of the Internal Revenue Code of 1986 after the date of the enactment of this Act [Aug. 20, 1996] and before October 1, 1996, only 1/2 of any increase in tax (for the taxable year for which such installment is made) by reason of the amendments made by subsections (a) and (b) shall be taken into account. Any reduction in such installment by reason of the preceding sentence shall be recaptured by increasing the next required installment for such year by the amount of such reduction.”
Sec. 1621(e) of Pub. L. 104-188, provided that: “The amendments made by this section shall take effect on September 1, 1997.”
Sec. 1702(e)(1)(B) of Pub. L. 104-188, provided that: “(B) For purposes of applying sections 56(g)(1) and 56(g)(3) of the Internal Revenue Code of 1986 with respect to taxable years beginning in 1991 and 1992, the references in such sections to the alternative tax net operating loss deduction shall be treated as including a reference to the deduction under section 56(h) of such Code as in effect before the amendments made by section 1915 of the Energy Policy Act of 1992.”
Sec. 1702(i) of Pub. L. 104-188, provided that: “Except as otherwise expressly provided, any amendment made by this section shall take effect as if included in the provision of the Revenue Reconciliation Act of 1990 to which such amendment relates.”
EFFECTIVE DATE OF 1993 AMENDMENTS
Sec. 13115(b) of Pub. L. 103-66, provided that:
“(1) In general. —
“Except as provided in paragraph (2), the amendments made by this section shall apply to property placed in service after December 31, 1993.
“(2) Coordination with transitional rules. —
“The amendments made by this section shall not apply to any property to which paragraph (1) of section 56(a) of the Internal Revenue Code of 1986 does not apply by reason of subparagraph (C)(i) thereof.”
Sec. 13171(d) of Pub. L. 103-66, provided that: “The amendments made by this section shall apply to contributions made after June 30, 1992, except that in the case of any contribution of capital gain property which is not tangible personal property, such amendments shall apply only if the contribution is made after December 31, 1992.”
Amendment by Sec. 13227(c) of Pub. L. 103-66 applicable to taxable years beginning after December 31, 1993.
EFFECTIVE DATE OF 1992 AMENDMENTS
Amendment by Sec. 1915 of Pub. L. 102-486 applicable to taxable years beginning after December 31, 1992.
EFFECTIVE DATE OF 1990 AMENDMENTS
Amendment by section 11103(b) of Pub. L. 101-508 applicable to taxable years beginning after Dec. 31, 1990, see section 11103(e) of Pub. L. 101-508, set out as a note under section 1 of this title.
Section 11301(d)(2) of Pub. L. 101-508 provided that:
‘(A) In general. — The amendment made by subsection (b) (amending this section) shall apply to taxable years beginning on or after September 30, 1990, except that, in the case of a small insurance company, such amendment shall apply to taxable years beginning after December 31, 1989. For purposes of this paragraph, the term ‘small insurance company’ means any insurance company which meets the requirements of section 806(a)(3) of the Internal Revenue Code of 1986; except that paragraph (2) of section 806(c) of such Code shall not apply.
‘(B) Special rules for year which includes September 30, 1990. — In the case of any taxable year which includes September 30, 1990, the amount of acquisition expenses which is required to be capitalized under section 56(g)(4)(F) of the Internal Revenue Codeof 1986 (as in effect before the amendment made by subsection (b)) by a company which is not a small insurance company shall be the amount which bears the same ratio to the amount which (but for this subparagraph) would be so required to be capitalized as the number of days in such taxable year before September 30, 1990, bears to the total number of days in such taxable year. A similar reduction shall be made in the amount amortized for such taxable year under such section 56(g)(4)(F).'
Section 11531(c) of Pub. L. 101-508 provided that: ‘The amendments made by this section (amending this section and sections 59 and 59A of this title) shall apply to taxable years beginning after December 31, 1990.’
Section 11704(b) of Pub. L. 101-508 provided that: ‘The amendments made by this section (amending this section, sections 172, 351, 413, 461, 469, 597, 857, 860D, 860G, 892, 927, 936, 1017, 1245, 1441, 2056A, 2642, 3231, 4091, 4093, 5061, 6013, 6038A, 6039D, 6045, 6323, 6332, 6655, 7519, 7522, 7608, and 7701 of this title, and provisions set out as a note under section 231n of Title 45, Railroads) shall take effect on the date of the enactment of this Act.’
Amendment by section 11812(b)(4) of Pub. L. 101-508 applicable to property placed in service after Nov. 5, 1990, but not applicable to any property to which section 168 of this title does not apply by reason of subsec. (f)(5) of section 168, and not applicable to rehabilitation expenditures described in section 252(f)(5) of Pub. L. 99-514, see section 11812(c) of Pub. L. 101-508, set out as a note under section 42 of this title.
EFFECTIVE DATE OF 1989 AMENDMENTS
Section 7205(c) of Pub. L. 101-239 provided that:
‘(1) In general. — Except as otherwise provided in this subsection, the amendments made by this section (amending this section and section 382 of this title) shall apply to ownership changes and acquisitions after October 2, 1989, in taxable years ending after such date.
‘(2) Binding contract. — The amendments made by this section shall not apply to any ownership change or acquisition pursuant to a written binding contract in effect on October 2, 1989, and at all times thereafter before such change or acquisition.
‘(3) Bankruptcy proceedings. — In the case of a reorganization described in section 368(a)(1)(G) of the Internal Revenue Code of 1986, or an exchange of debt for stock in a title 11 or similar case (as defined in section 368(a)(3) of such Code), the amendments made by this section shall not apply to any ownership change resulting from such a reorganization or proceeding if a petition in such case was filed with the court before October 3, 1989.
‘(4) Subsidiaries of bankrupt parent. — The amendments made by this section shall not apply to any built-in loss of a corporation which is a member (on October 2, 1989) of an affiliated group the common parent of which (on such date) was subject to title 11 or similar case (as defined in section 368(a)(3) of such Code). The preceding sentence shall apply only if the ownership change or acquisition is pursuant to the plan approved in such proceeding and is before the date 2 years after the date on which the petition which commenced such proceeding was filed.’
Section 7611(g) of Pub. L. 101-239 provided that:
‘(1) In general. — Except as otherwise provided in this subsection, the amendments made by this section (amending this section and sections 59 and 312 of this title) shall apply to taxable years beginning after December 31, 1989.
‘(2) Intangible drilling costs. — The amendments made by subsection (f)(5) (amending sections 59 and 312 of this title) shall apply to costs paid or incurred in taxable years beginning after December 31, 1989.
‘(3) Regulations on earnings and profits rules. — Not later than March 15, 1991, the Secretary of the Treasury or his delegate shall prescribe initial regulations providing guidance as to which items of income are included in adjusted current earnings under section 56(g)(4)(B)(i) of the Internal Revenue Code of 1986 and which items of deduction are disallowed under section 56(g)(4)(C) of such Code.'
Section 7612(c)(2) of Pub. L. 101-239 provided that: ‘The amendment made by paragraph (1) (amending this section) shall apply to contracts entered into in taxable years beginning after September 30, 1990.’
Section 7612(d)(2) of Pub. L. 101-239 provided that: ‘The amendment made by paragraph (1) (amending this section) shall apply to taxable years beginning after December 31, 1990.’
Amendment by sections 7811(d)(3) and 7815(e)(2), (4) of Pub. L. 101-239 effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-647, to which such amendment relates, see section 7817 of Pub. L. 101-239, set out as a note under section 1 of this title.
Section 7821(c)(5) of Pub. L. 101-239 provided that: “(5) In the case of taxable years beginning in 1987, the reference to section 453 contained in section 56(a)(6) of the Internal Revenue Code of 1986 shall be treated as including a reference to section 453A.
EFFECTIVE DATE OF 1988 AMENDMENTS
Section 1007(b)(14)(C) of Pub. L. 100-647 provided that: ‘The amendments made by this paragraph (amending this section and section 57 of this title) shall apply with respect to options exercised after December 31, 1987.’
Amendment by sections 1002(a)(12) and 1007(b)(1)-(13), (15)-(19) of Pub. L. 100-647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99-514, to which such amendment relates, see section 1019(a) of Pub. L. 100-647, set out as a note under section 1 of this title.
Section 2001(e) of Pub. L. 100-647 provided that: ‘Except as otherwise provided in this section, the amendments made by this section (amending this section, sections 59A, 882, 4041, 4081, 4091, 4662, 4672, 6416, 6421, and 6427 of this title, and provisions set out as a note under section 4081 of this title) shall take effect as if included in the provision of the Superfund Revenue Act of 1986 (Pub. L. 99-499, title V) to which it relates.'
Section 2004(u) of Pub. L. 100-647 provided that: ‘Except as otherwise provided in this section, any amendment made by this section (amending this section, sections 163, 244, 280H, 301, 304, 355, 384, 444, 453, 453A, 469, 514, 811, 812, 816, 842, 904, 1201, 1363, 1503, 1561, 4093, 5113, 5123, 5276, 5881, 6427, 6655, 7519, and 7704 of this title, and provisions set out as notes under sections 21, 219, 243, 301, 304, 444, 453, 1503, and 7704 of this title) shall take effect as if included in the provisions of the Revenue Act of 1987 (Pub. L. 100-203, title X) to which such amendment relates.'
Amendment by section 5041(b)(4) of Pub. L. 100-647 applicable to contracts entered into on or after June 21, 1988, but not applicable to any contract resulting from the acceptance of a bid made before June 21, 1988, if the bid could not have been revoked or altered at any time on or after June 21, 1988, and not applicable in the case of a qualified ship contract (as defined in section 10203(b)(2)(B) of Pub. L. 100-203, set out as a note under section 460 of this title), see section 5041(e) of Pub. L. 100-647, set out as a note under section 460 of this title.
Section 6079(a)(2) of Pub. L. 100-647 provided that: ‘The amendment made by paragraph (1) (amending this section) shall take effect as if included in the amendments made by section 701 of the Reform Act (Pub. L. 99-514).'
Section 6303(b) of Pub. L. 100-647 provided that: ‘The amendment made by subsection (a) (amending this section) shall apply to taxable years beginning after December 31, 1986.’
EFFECTIVE DATE OF 1987 AMENDMENTS
Amendment by section 10202(d) of Pub. L. 100-203 applicable to dispositions in taxable years beginning after Dec. 31, 1986, with coordination with Tax Reform Act of 1986, see section 10202(e)(4), (5) of Pub. L. 100-203, set out as a note under section 453 of this title.
Section 10243(b) of Pub. L. 100-203 provided that: ‘The amendment made by subsection (a) (amending this section) shall apply to taxable years beginning after December 31, 1987.’
EFFECTIVE DATE
Section applicable to taxable years beginning after Dec. 31, 1986, with certain exceptions and qualifications, see section 701(f) of Pub. L. 99-514, set out as a note under section 55 of this title.
RELIEF FOR 2016 DISASTER AREAS
Section 11028 of Pub. L. 115-97 provided that:
“(a) IN GENERAL.—For purposes of this section, the term ‘2016 disaster area’ means any area with respect to which a major disaster has been declared by the President under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act during calendar year 2016.
“(b) SPECIAL RULES FOR USE OF RETIREMENT FUNDS WITH RESPECT TO AREAS DAMAGED BY 2016 DISASTERS.—
“(1) TAX-FAVORED WITHDRAWALS FROM RETIREMENT PLANS.—
“(A) IN GENERAL.—Section 72(t) of the Internal Revenue Code of 1986 shall not apply to any qualified 2016 disaster distribution.
“(B) AGGREGATE DOLLAR LIMITATION.—
“(i) IN GENERAL.—For purposes of this subsection, the aggregate amount of distributions received by an individual which may be treated as qualified 2016 disaster distributions for any taxable year shall not exceed the excess (if any) of—
“(I) $100,000, over (II) the aggregate amounts treated as qualified 2016 disaster distributions received by such individual for all prior taxable years.
“(ii) TREATMENT OF PLAN DISTRIBUTIONS.—If a distribution to an individual would (without regard to clause (i)) be a qualified 2016 disaster distribution, a plan shall not be treated as violating any requirement of this title merely because the plan treats such distribution as a qualified 2016 disaster distribution, unless the aggregate amount of such distributions from all plans maintained by the employer (and any member of any controlled group which includes the employer) to such individual exceeds $100,000.
“(iii) CONTROLLED GROUP.—For purposes of clause (ii), the term ‘‘controlled group’’ means any group treated as a single employer under subsection (b), (c), (m), or (o) of section 414 of the Internal Revenue Code of 1986.
“(C) AMOUNT DISTRIBUTED MAY BE REPAID.—
“(i) IN GENERAL.—Any individual who receives a qualified 2016 disaster distribution may, at any time during the 3-year period beginning on the day after the date on which such distribution was received, make one or more contributions in an aggregate amount not to exceed the amount of such distribution to an eligible retirement plan of which such individual is a beneficiary and to which a rollover contribution of such distribution could be made under section 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16) of the Internal Revenue Code of 1986, as the case may be.
“(ii) TREATMENT OF REPAYMENTS OF DISTRIBUTIONS FROM ELIGIBLE RETIREMENT PLANS OTHER THAN IRAS.— For purposes of the Internal Revenue Code of 1986, if a contribution is made pursuant to clause (i) with respect to a qualified 2016 disaster distribution from an eligible retirement plan other than an individual retirement plan, then the taxpayer shall, to the extent of the amount of the contribution, be treated as having received the qualified 2016 disaster distribution in an eligible rollover distribution (as defined in section 402(c)(4) of the Internal Revenue Code of 1986) and as having transferred the amount to the eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution.
“(iii) TREATMENT OF REPAYMENTS FOR DISTRIBUTIONS FROM IRAS.—For purposes of the Internal Revenue Code of 1986, if a contribution is made pursuant to clause (i) with respect to a qualified 2016 disaster distribution from an individual retirement plan (as defined by section 7701(a)(37) of the Internal Revenue Code of 1986), then, to the extent of the amount of the contribution, the qualified 2016 disaster distribution shall be treated as a distribution described in section 408(d)(3) of such Code and as having been transferred to the eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution.
“(D) DEFINITIONS.—For purposes of this paragraph—
“(i) QUALIFIED 2016 DISASTER DISTRIBUTION.—Except as provided in subparagraph (B), the term ‘qualified 2016 disaster distribution’ means any distribution from an eligible retirement plan made on or after January 1, 2016, and before January 1, 2018, to an individual whose principal place of abode at any time during calendar year 2016 was located in a disaster area described in subsection (a) and who has sustained an economic loss by reason of the events giving rise to the Presidential declaration described in subsection (a) which was applicable to such area.
“(ii) ELIGIBLE RETIREMENT PLAN.—The term ‘eligible retirement plan’ shall have the meaning given such term by section 402(c)(8)(B) of the Internal Revenue Code of 1986.
“(E) INCOME INCLUSION SPREAD OVER 3-YEAR PERIOD.—
“(i) IN GENERAL.—In the case of any qualified 2016 disaster distribution, unless the taxpayer elects not to have this subparagraph apply for any taxable year, any amount required to be included in gross income for such taxable year shall be so included ratably over the 3-taxable-year period beginning with such taxable year.
“(ii) SPECIAL RULE.—For purposes of clause (i), rules similar to the rules of subparagraph (E) of section 408A(d)(3) of the Internal Revenue Code of 1986 shall apply.
“(F) SPECIAL RULES.—
“(i) EXEMPTION OF DISTRIBUTIONS FROM TRUSTEE TO TRUSTEE TRANSFER AND WITHHOLDING RULES.—For purposes of sections 401(a)(31), 402(f), and 3405 of the Internal Revenue Code of 1986, qualified 2016 disaster distribution shall not be treated as eligible rollover distributions.
“(ii) QUALIFIED 2016 DISASTER DISTRIBUTIONS TREATED AS MEETING PLAN DISTRIBUTION REQUIREMENTS.—For purposes of the Internal Revenue Code of 1986, a qualified 2016 disaster distribution shall be treated as meeting the requirements of sections 401(k)(2)(B)(i), 403(b)(7)(A)(ii), 403(b)(11), and 457(d)(1)(A) of the Internal Revenue Code of 1986. (2) PROVISIONS RELATING TO PLAN AMENDMENTS.—
“(A) IN GENERAL.—If this paragraph applies to any amendment to any plan or annuity contract, such plan or contract shall be treated as being operated in accordance with the terms of the plan during the period described in subparagraph (B)(ii)(I).
“(B) AMENDMENTS TO WHICH SUBSECTION APPLIES.—
“(i) IN GENERAL.—This paragraph shall apply to any amendment to any plan or annuity contract which is made—
“(I) pursuant to any provision of this section, or pursuant to any regulation under any provision of this section, and
“(II) on or before the last day of the first plan year beginning on or after January 1, 2018, or such later date as the Secretary prescribes. In the case of a governmental plan (as defined in section 414(d) of the Internal Revenue Code of 1986), subclause (II) shall be applied by substituting the date which is 2 years after the date otherwise applied under subclause (II).
“(ii) CONDITIONS.—This paragraph shall not apply to any amendment to a plan or contract unless such amendment applies retroactively for such period, and shall not apply to any such amendment unless the plan or contract is operated as if such amendment were in effect during the period—
“(I) beginning on the date that this section or the regulation described in clause (i)(I) takes effect (or in the case of a plan or contract amendment not required by this section or such regulation, the effective date specified by the plan), and
“(II) ending on the date described in clause (i)(II) (or, if earlier, the date the plan or contract amendment is adopted).
“(c) SPECIAL RULES FOR PERSONAL CASUALTY LOSSES RELATED TO 2016 MAJOR DISASTER.—
“(1) IN GENERAL.—If an individual has a net disaster loss for any taxable year beginning after December 31, 2015, and before January 1, 2018—
“(A) the amount determined under section 165(h)(2)(A)(ii) of the Internal Revenue Code of 1986 shall be equal to the sum of—
“(i) such net disaster loss, and
“(ii) so much of the excess referred to in the matter preceding clause (i) of section 165(h)(2)(A) of such Code (reduced by the amount in clause (i) of this subparagraph) as exceeds 10 percent of the adjusted gross income of the individual,
“(B) section 165(h)(1) of such Code shall be applied by substituting ‘$500’ for ‘$500 ($100 for taxable years beginning after December 31, 2009)’,
“(C) the standard deduction determined under section 63(c) of such Code shall be increased by the net disaster loss,
“(D) section 56(b)(1)(E) of such Code shall not apply to so much of the standard deduction as is attributable to the increase under subparagraph (C) of this paragraph.
“(2) NET DISASTER LOSS.—For purposes of this subsection, the term ‘‘net disaster loss’’ means the excess of qualified disaster-related personal casualty losses over personal casualty gains (as defined in section 165(h)(3)(A) of the Internal Revenue Code of 1986).
“(3) QUALIFIED DISASTER-RELATED PERSONAL CASUALTY LOSSES.—For purposes of this paragraph, the term ‘qualified disaster-related personal casualty losses’ means losses described in section 165(c)(3) of the Internal Revenue Code of 1986 which arise in a disaster area described in subsection (a) on or after January 1, 2016, and which are attributable to the events giving rise to the Presidential declaration described in subsection (a) which was applicable to such area.”
SPECIAL RULES FOR QUALIFIED DISASTER-RELATED PERSONAL CASUALTY LOSSES
Section 504(b)(1) of Pub. L. 115-63 provided:
“(1) IN GENERAL.—If an individual has a net disaster loss for any taxable year—
“(A) the amount determined under section 165(h)(2)(A)(ii) of the Internal Revenue Code of 1986 shall be equal to the sum of—
“(i) such net disaster loss, and
“(ii) so much of the excess referred to in the matter preceding clause (i) of section 165(h)(2)(A) of such Code (reduced by the amount in clause (i) of this subparagraph) as exceeds 10 percent of the adjusted gross income of the individual,
“(B) section 165(h)(1) of such Code shall be applied by substituting “$500” for “$500 ($100 for taxable years beginning after December 31, 2009)”,
“(C) the standard deduction determined under section 63(c) of such Code shall be increased by the net disaster loss, and
“(D) section 56(b)(1)(E) of such Code shall not apply to so much of the standard deduction as is attributable to the increase under subparagraph (C) of this paragraph.”
ANTI-ABUSE RULES
Sec. 13(d) of Pub. L. 111-92 provided:
“(d) ANTI-ABUSE RULES.—The Secretary of Treasury or the Secretary's designee shall prescribe such rules as are necessary to prevent the abuse of the purposes of the amendments made by this section, including anti-stuffing rules, anti-churning rules (including rules relating to sale-leasebacks), and rules similar to the rules under section 1091 of the Internal Revenue Code of 1986 relating to losses from wash sales.”
SECTION 56(g)(1) AND (3); TAXABLE YEARS BEGINNING IN 1991 AND 1992
Section 1702(e)(1)(B) of Pub. L. 104-188 provided that: ‘For purposes of applying sections 56(g)(1) and 56(g)(3) of the Internal Revenue Code of 1986 with respect to taxable years beginning in 1991 and 1992, the reference in such sections to the alternative tax net operating loss deduction shall be treated as including a reference to the deduction under section 56(h) of such Code as in effect before the amendments made by section 1915 of the Energy Policy Act of 1992.'
SAVINGS PROVISION
For provisions that nothing in amendment by sections 11801 and 11812 of Pub. L. 101-508 be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to Nov. 5, 1990, for purposes of determining liability for tax for periods ending after Nov. 5, 1990, see section 11821(b) of Pub. L. 101-508, set out as a note under section 29 of this title.
INSTALLMENT SALES; TAXABLE YEARS BEGINNING IN 1987
Section 7821(a)(5) of Pub. L. 101-239 provided that: ‘In the case of taxable years beginning in 1987, the reference to section 453 contained in section 56(a)(6) of the Internal Revenue Code of 1986 shall be treated as including a reference to section 453A.'
APPLICABILITY OF CERTAIN AMENDMENTS BY PUB. L. 99-514 IN RELATION TO TREATY OBLIGATIONS OF UNITED STATES
For applicability of amendment by section 701(a) of Pub. L. 99-514 (enacting this section) notwithstanding any treaty obligation of the United States in effect on Oct. 22, 1986, with provision that for such purposes any amendment by title I of Pub. L. 100-647 be treated as if it had been included in the provision of Pub. L. 99-514 to which such amendment relates, see section 1012(aa)(2), (4) of Pub. L. 100-647, set out as a note under section 861 of this title.
STUDY OF BOOK AND EARNINGS AND PROFITS ADJUSTMENTS
Section 702 of Pub. L. 99-514, which required Secretary of the Treasury or his delegate to conduct a study of operation and effect of provisions of sections 56(f) and 56(g) of the Internal Revenue Code of 1986, was repealed by Pub. L. 101-508, title XI, Sec. 11832(4), Nov. 5, 1990, 104 Stat. 1388-559.
PRIOR PROVISIONS
A prior section 56, added Pub. L. 91-172, title III, Sec. 301(a), Dec. 30, 1969, 83 Stat. 580, and amended Pub. L. 91-614, title V, Sec. 501(a), Dec. 31, 1970, 84 Stat. 1846; Pub. L. 92-178, title VI, Sec. 601(c)(4), (5), Dec. 10, 1971, 85 Stat. 558; Pub. L. 93-406, title II, Sec. 2001(g)(2)(D), 2002(g)(4), 2005(c)(7), Sept. 2, 1974, 88 Stat. 957, 968, 991; Pub. L. 94-12, title II, Sec. 203(b)(2), (3), 208(d)(2), (3), Mar. 29, 1975, 89 Stat. 30, 35; Pub. L. 94-455, title III, Sec. 301(a), (b), (c)(4)(B), Oct. 4, 1976, 90 Stat. 1549, 1552; Pub. L. 95-30, title II, Sec. 202(d)(2), May 23, 1977, 91 Stat. 148; Pub. L. 95-600, title I, Sec. 141(d), Nov. 6, 1978, 92 Stat. 2794; Pub. L. 95-618, title I, Sec. 101(b)(2), Nov. 9, 1978, 92 Stat. 3179; Pub. L. 96-222, title I, Sec. 101(a)(7)(L)(iii)(IV), Apr. 1, 1980, 94 Stat. 200; Pub. L. 97-34, title III, Sec. 331(c)(2), Aug. 13, 1981, 95 Stat. 293; Pub. L. 97-248, title II, Sec. 201(d)(1), formerly Sec. 201(c)(1), Sept. 3, 1982, 96 Stat. 419, redesignated Pub. L. 97-448, title III, Sec. 306(a)(1)(A)(i), Jan. 12, 1983, 96 Stat. 2400; Pub. L. 98-369, div. A, title IV, Sec. 474(r)(1), July 18, 1984, 98 Stat. 839; Pub. L. 99-514, title XI, Sec. 1171(b)(3), Oct. 22, 1986, 100 Stat. 2513, related to a corporate minimum tax, prior to the general revision of this part by Pub. L. 99-514, Sec. 701(a).