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Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. TABLE OF CONTENTS
Sec. 1. Table of contents.
TITLE I-SHORT TITLE AND AMENDMENT OF 1954 CODE
Sec. 101. Short title.
Sec. 102. Amendment of 1954 Code.
TITLE II-AMENDMENTS RELATED TO TAX SHELTERS
Sec. 201. Capitalization and amortization of real property construction period
interest and taxes.
Sec. 202. Recapture of depreciation on real property.
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Sec. 204. Limitations on deductions for expenses.
Sec. 203. Amendment of section 167 (k).
Sec. 205. Gain from disposition of interest in oil and gas property.
Sec. 206. Amendments to farm loss recapture rules.
Sec. 207. Limitations on deductions in case of farming syndicates; capitalization
of certain orchard and vineyard expenses and method of accounting
for corporations engaged in farming.
Sec. 208. Treatment of prepared interest.
Sec. 209. Limitation on interest deduction.
Sec. 210. Amortization of production cost of motion pictures, books, records,
and other similar property.
Sec. 211. Clarification of definition of produced film rents.
Sec. 212. Basis limitation for and recapture of depreciation on player contracts.
Sec. 213. Certain partnership provisions.
Sec. 214. Scope of waiver of statute of limitations in case of activities not en-
gaged in for profit.
TITLE III-MINIMUM TAX AND MAXIMUM TAX
Sec. 301. Minimum tax.
Sec. 302. Maximum tax.
TITLE IV-EXTENSIONS OF INDIVIDUAL INCOME TAX REDUCTIONS
Sec. 401. Extensions of individual income tax reductions.
Sec. 402. Refunds of earned income credit disregarded in the administration of
Federal programs and federally assisted programs.
TITLE V-TAX SIMPLIFICATION IN THE INDIVIDUAL INCOME TAX
Sec. 501. Revision of tax tables for individuals.
Sec. 502. Deduction for alimony allowed in determining adjusted gross income.
Sec. 503. Revision of retirement income credit.
Sec. 504. Credit for child care expenses.
Sec. 505. Changes in exclusions for sick pay and certain military, etc., dis-
ability pensions; certain disability income.
Sec. 506. Moving expenses.
Sec. 507. Tax revision study.
Sec. 508. Effective date.
TITLE VI-BUSINESS RELATED INDIVIDUAL INCOME TAX
PROVISIONS
Sec. 601. Deductions for expenses attributable to business use of homes, rental of
vacation homes, etc.
Sec. 602. Deductions for attending foreign conventions.
Sec. 603. Change in tax treatment of qualified stock options.
Sec. 604. State legislators' travel expenses away from home.
Sec. 605. Deduction for guarantees of business bad debts to guarantors not
involved in business.
Sec. 801. Extension of $100,000 limitation on used property for 4 years.
Sec. 802. Extension of 10 percent credit for 4 years and first-in-first-out treat-
ment of investment credit amounts.
Sec. 803. Employee stock ownership plans; study of expanded stock ownership.
Sec. 804. Investment credit in the case of movie and television films.
Sec. 805. Investment credit in the case of certain ships.
Sec. 806. Additional net operating loss carryover years; limitations on net
operating loss carryovers.
Sec. 807. Small fishing vessel construction reserves.
TITLE IX-SMALL BUSINESS PROVISIONS
Sec. 901. Extension of certain corporate income tax reductions.
Sec. 902. Changes in subchapter S rules.
TITLE X-CHANGES IN THE TREATMENT OF FOREIGN INCOME
PART I-FOREIGN TAX PROVISIONS AFFECTING INDIVIDUALS ABROAD
Sec. 1011. Income earned abroad by United States citizens living or residing
abroad.
Sec. 1012. Income tax treatment of nonresident alien individuals who are
married to citizens or residents of the United States.
Sec. 1013. Foreign trusts having one or more United States beneficiaries to be
taxed currently to grantor.
Sec. 1014. Interest charge on accumulation distributions from foreign trusts.
Sec. 1015. Excise tax on transfers of property to foreign persons to avoid Fed-
eral income tax.
PART II-AMENDMENTS AFFECTING TAX TREATMENT OF CONTROLLED FOREIGN
CORPORATIONS AND THEIR SHAREHOLDERS
Sec. 1021. Amendment of provision relating to investment in United States
property by controlled foreign corporations.
Sec. 1022. Repeal of exclusion for earnings of less developed country corpora- tions for purposes of section 1248.
Sec. 1023. Exclusion from subpart F of certain earnings of insurance companies.
Sec. 1024. Shipping profits of foreign corporations.
PART III-AMENDMENTS AFFECTING TREATMENT OF FOREIGN TAXES
Sec. 1031. Requirement that foreign tax credit be determined on overall basis.
Sec. 1032. Recapture of foreign losses.
Sec. 1033. Dividends from less developed country corporations to be grossed up
for purposes of determining United States income and foreign tax
credit against that income.
Sec. 1034. Treatment of capital gains for purposes of foreign tax credit.
Sec. 1035. Foreign oil and gas extraction income.
Sec. 1036. Underwriting income.
Sec. 1037. Third tier foreign tax credit when section 951 applies.
PART IV-MONEY OR OTHER PROPERTY MOVING OUT OF OR INTO THE UNITED STATES
Sec. 1041. Portfolio debt investments in United States of nonresident aliens and
foreign corporations.
Sec. 1042. Changes in ruling requirements under section 367; certain changes
in section 1248.
Sec. 1043. Contiguous country branches of domestic life insurance companies.
Sec. 1044. Transitional rule for bond, etc., losses of foreign banks.
PART V-SPECIAL CATEGORIES OF FOREIGN TAX TREATMENT
Sec. 1051. Tax treatment of corporations conducting trade or business in Puerto
Rico and possessions of the United States.
Sec. 1052. Western Hemisphere trade corporations.
Sec. 1053. Repeal of provisions relating to China Trade Act corporations.
90 STAT. 1521
TABLE OF CONTENTS-Continued
TITLE X-CHANGES IN THE TREATMENT OF FOREIGN INCOME,
Continued
PART VI-DENIAL OF CERTAIN TAX BENEFITS FOR COOPERATION WITH OR PARTICI-
PATION IN INTERNATIONAL BOYCOTTS AND IN CONNECTION WITH THE
PAYMENT OF CERTAIN BRIBES
Sec. 1061. Denial of foreign tax credit.
Sec. 1062. Denial of deferral of international boycott amounts.
Sec. 1063. Denial of DISC benefits.
Sec. 1064. Determinations as to participation in or cooperation with an inter-
national boycott.
Sec. 1065. Foreign bribes.
Sec. 1066. Effective dates.
Sec. 1067. Reports by Secretary.
TITLE XI-AMENDMENTS AFFECTING DISC
Sec. 1101. Amendments affecting DISC.
TITLE XII-ADMINISTRATIVE PROVISIONS
Sec. 1201. Public inspection of written determinations by Internal Revenue
Service.
Sec. 1202. Confidentiality and disclosure of returns and return information.
Sec. 1203. Income tax return preparers.
Sec. 1204. Jeopardy and termination assessments.
Sec. 1205. Administrative summons.
Sec. 1206. Assessments in case of mathematical or clerical errors.
Sec. 1207. Withholding.
Sec. 1208. State-conducted lotteries.
Sec. 1209. Minimum exemption from levy for wages, salary, and other income.
Sec. 1210. Joint committee refund cases.
Sec. 1211. Social security account numbers.
Sec. 1212. Abatement of interest on errors when return is prepared for taxpayer
by the Internal Revenue Service.
TITLE XIII-TAX EXEMPT ORGANIZATIONS
Sec. 1301. Disposition of private foundation property under transition rules of
Tax Reform Act of 1969.
Sec. 1302. New private foundation set-asides.
Sec. 1303. Minimum distribution amount for private foundations.
Sec. 1304. Extension of time to amend charitable remainder trust governing
instrument.
Sec. 1305. Unrelated trade or business income of trade shows, State fairs, etc.
Sec. 1306. Declaratory judgments with respect to section 501(c)(3) status and
classification.
Sec. 1307. Lobbying by public charities.
Sec. 1308. Tax liens, etc., not to constitute acquisition indebtedness.
Sec. 1309. Extension of self-dealing transition rules for private foundations.
Sec. 1310. Imputed interest.
Sec. 1311. Certain hospital services.
Sec. 1312. Clinical services of cooperative hospitals.
Sec. 1313. Exemption of certain amateur athletic organizations from tax.
TITLE XIV-CAPITAL GAINS
Sec. 1401. Increase in amount of ordinary income against which capital loss may
be offset.
Sec. 1402. Increase in holding period required for capital gain or loss to be long
term.
Sec. 1403. Allowance of 8-year capital loss carryover in case of regulated invest-
ment companies.
Sec. 1404. Sale of residence by elderly.
TITLE XV-PENSION AND INSURANCE TAXATION
Sec. 1501. Retirement savings for certain married individuals.
Sec. 1502. Limitation on contributions to certain pension, etc., plans.
Sec. 1503. Participation by members of reserves or National Guard in individual
retirement accounts; participation by volunteer firefighters in
individual retirement accounts, etc.
Sec. 1504. Certain investments by annuity plans.
Sec. 1505. Segregated asset accounts.
Sec. 1506. Study of salary reduction pension plans.
Sec. 1507. Consolidated returns for life and other insurance companies.
Sec. 1508. Treatment of certain life insurance contracts guaranteed renewable.
Sec. 1509. Study of expanded participation in individual retirement accounts.
Sec. 1510. Taxable status of pension benefits guaranty corporation.
Sec. 1511. Level premium plans covering owner-employees.
Sec. 1512. Lump-sum distributions from qualified pension, etc., plans.
TITLE XVI-REAL ESTATE INVESTMENT TRUSTS
Sec. 1601. Deficiency dividend procedure.
Sec. 1602. Trust not disqualified in certain cases where income tests were not
met.
Sec. 1603. Treatment of property held for sale to customers.
Sec. 1604. Other changes in limitations and requirements.
Sec. 1605. Excise tax.
Sec. 1606. Allowance of net operating loss carryover.
Sec. 1607. Alternative tax in case of capital gains.
Sec. 1608. Effective date for title.
TITLE XVII-RAILROAD AND AIRLINE PROVISIONS
Sec. 1701. Certain provisions relating to railroads.
Sec. 1702. Amortization over 50-year period of railroad grading and tunnel bores
placed in service before 1969.
Sec. 1703. Certain provisions relating to airlines.
TITLE XVIII-INTERNATIONAL TRADE AMENDMENTS
Sec. 1801. United States International Trade Commission.
Sec. 1802. Trade Act of 1974 amendments.
TITLE XIX-REPEAL AND REVISION OF OBSOLETE, RARELY USED,
ETC., PROVISIONS OF INTERNAL REVENUE CODE OF 1954
SUBTITLE A-AMENDMENTS OF INTERNAL REVENUE CODE GENERALLY
Sec. 1901. Amendments of subtitle A; income taxes.
Sec. 1902. Amendments of subtitle B; estate and gift taxes.
Sec. 1903. Amendments of subtitle C; employment taxes.
Sec. 1904. Amendments of subtitle D; miscellaneous excise taxes.
Sec. 1905. Amendments of subtitle E; alcohol, tobacco, and certain other excise
taxes.
Sec. 1906. Amendments of subtitle F; procedure and administration.
Sec. 1907. Amendments of subtitle G; the Joint Committee on Internal Revenue
Taxation.
Sec. 1908. Effective date of certain definitions and designations.
SUBTITLE B-AMENDMENTS OF CODE PROVISIONS WITH LIMITED CURRENT
APPLICATION: REPEALS AND SAVINGS PROVISIONS
Sec. 1951. Provisions of subtitle A; income taxes.
Sec. 1952. Provisions of subchapter D of chapter 39; cotton futures.