Senior Citizen Capital Gains Rate Reduction Act of 1993

Summary: Senior Citizen Capital Gains Rate Reduction Act of 1993 - Amends the Internal Revenue Code to reduce the individual capital gains rate for the sale of retirement assets by a taxpayer who has attained the age of 60 or older.  Allows such reduced rate, in the case of a joint tax return, if either person has attained such age. 
Reduces the alternative minimum tax rate on capital gains for such taxpayers. 
Provides for indexing such retirement assets held for more than five years before their disposition for purposes of determining gain or loss.  Declares that the deduction for depreciation, depletion, and amortization shall be determined without regard to the indexed basis.  Provides for determining the indexed amount based upon the gross national product deflator. 
Provides for indexing the limitation on capital losses of such taxpayers.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Senior Citizen Capital Gains Rate 
Reduction Act of 1993''.

SEC. 2. REDUCTION IN CAPITAL GAINS RATE FOR SENIOR CITIZENS.

    (a) General Rule.--Section 1 of the Internal Revenue Code of 1986 
(relating to tax imposed on individuals) is amended by adding at the 
end thereof the following new subsection:
    ``(i) Reduction in Capital Gains Rate for Senior Citizens.--
            ``(1) In general.--If a taxpayer who has attained age 60 
        before the close of the taxable year has a net capital gain, 
        then the tax imposed by this section shall not exceed the sum 
        of--
                    ``(A) a tax computed at the rates and in the same 
                manner as if this subsection had not been enacted on 
                the taxable income reduced by the net capital gain, 
                plus
                    ``(B) a tax equal to the sum of--
                            ``(i) 7.5 percent of so much of the net 
                        capital gain as does not exceed--
                                    ``(I) the maximum amount of taxable 
                                income to which the 15-percent rate 
                                applies under the table applicable to 
                                the taxpayer, reduced by
                                    ``(II) the taxable income to which 
                                subparagraph (A) applies, plus
                            ``(ii) 15 percent of the net capital gain 
                        in excess of the net capital gain to which 
                        clause (i) applies.
            ``(2) Special rules.--
                    ``(A) Joint returns.--In the case of a joint 
                return, if one spouse meets the age requirement of 
                paragraph (1), both spouses shall be treated as meeting 
                such requirement.
                    ``(B) Coordination with subsection (h).--Subsection 
                (h) shall not apply to any individual to whom paragraph 
                (1) applies.''
    (b) Technical Amendment.--Paragraph (1) of section 170(e) of such 
Code is amended by striking ``the amount of gain'' in the material 
following subparagraph (B)(ii) and inserting ``the amount of gain (or, 
in the case of an individual who meets the age requirement of section 
1(i), \13/28\ of the amount of gain)''.

SEC. 3. REDUCTION IN MINIMUM TAX RATE ON CAPITAL GAINS OF SENIOR 
              CITIZENS.

    Paragraph (1) of section 55(b) of the Internal Revenue Code of 1986 
(relating to tentative minimum tax) is amended by adding at the end 
thereof the following new paragraph:
            ``(3) Reduction in tax on capital gains of senior 
        citizens.--In the case of an individual who meets the age 
        requirement of section 1(i), subparagraph (A) of paragraph (1) 
        shall be applied as if it read as follows:
                    ```(A) the sum of--
                            ```(i) 15 percent of the lesser of--
                                    ```(I) the net capital gain 
                                (determined with the adjustments 
                                provided in this part), or
                                    ```(II) so much of the alternative 
                                minimum taxable income for the taxable 
                                year as exceeds the exemption amount, 
                                plus
                            ```(ii) 24 percent of the amount (if any) 
                        by which the excess referred to in clause 
                        (i)(II) exceeds the net capital gain (as so 
                        determined), reduced by'.''

SEC. 4. INDEXING OF RETIREMENT ASSETS FOR PURPOSES OF DETERMINING GAIN 
              OR LOSS.

    (a) In General.--Part II of subchapter O of chapter 1 of the 
Internal Revenue Code of 1986 (relating to basis rules of general 
application) is amended by inserting after section 1021 the following 
new section:

``SEC. 1022. INDEXING OF RETIREMENT ASSETS FOR PURPOSES OF DETERMINING 
              GAIN OR LOSS.

    ``(a) General Rule.--
            ``(1) Indexed basis substituted for adjusted basis.--Except 
        as provided in paragraph (2), if an indexed retirement asset 
        which has been held for more than 5 years is sold or otherwise 
        disposed of by an individual who meets the age requirement of 
        section 1(i), for purposes of this title the indexed basis of 
        the asset shall be substituted for its adjusted basis.
            ``(2) Exception for depreciation, etc.--The deduction for 
        depreciation, depletion, and amortization shall be determined 
        without regard to the application of paragraph (1) to the 
        taxpayer or any other person.
    ``(b) Indexed Retirement Asset.--For purposes of this section, the 
term `indexed retirement asset' means--
            ``(1) stock in a corporation, and
            ``(2) tangible property (or any interest therein), which is 
        a capital asset or property used in the trade or business (as 
        defined in section 1231(b)).
    ``(c) Indexed Basis.--For purposes of this section--
            ``(1) Indexed basis.--The indexed basis for any retirement 
        asset is--
                    ``(A) the adjusted basis of the retirement asset, 
                multiplied by
                    ``(B) the applicable inflation ratio.
            ``(2) Applicable inflation ratio.--The applicable inflation 
        ratio for any retirement asset is the percentage arrived at by 
        dividing--
                    ``(A) the gross national product deflator for the 
                calendar quarter in which the disposition takes place, 
                by
                    ``(B) the gross national product deflator for the 
                calendar quarter in which the retirement asset was 
                acquired by the taxpayer (or, if later, the calendar 
                quarter ending December 31, 1992).
        The applicable inflation ratio shall not be taken into account 
        unless it is greater than 1. The applicable inflation ratio for 
        any retirement asset shall be rounded to the nearest one-tenth 
        of 1 percent.
            ``(3) Gross national product deflator.--The gross national 
        product deflator for any calendar quarter is the implicit price 
        deflator for the gross national product for such quarter (as 
        shown in the first revision thereof).
            ``(4) Secretary to publish tables.--The Secretary shall 
        publish tables specifying the applicable inflation ratios for 
        each calendar quarter.
    ``(d) Special Rules.--For purposes of this section--
            ``(1) Treatment as separate retirement asset.--In the case 
        of any retirement asset, the following shall be treated as a 
        separate asset:
                    ``(A) a substantial improvement to property,
                    ``(B) in the case of stock of a corporation, a 
                substantial contribution to capital, and
                    ``(C) any other portion of a retirement asset to 
                the extent that separate treatment of such portion is 
                appropriate to carry out the purposes of this section.
            ``(2) Retirement assets which are not indexed assets 
        throughout holding period.--The applicable inflation ratio 
        shall be appropriately reduced for calendar months at any time 
        during which the retirement asset was not an indexed retirement 
        asset.''.

SEC. 5. INDEXING OF LIMITATION ON CAPITAL LOSSES OF SENIOR CITIZENS.

    Section 1211 of the Internal Revenue Code of 1986 (relating to 
limitation on capital losses) is amended by adding at the end thereof 
the following new subsection:
    ``(c) Indexation of Limitation on Senior Citizen Taxpayers.--
            ``(1) In general.--In applying subsection (b) to an 
        individual who meets the age requirement of section 1(i), the 
        $3,000 and $1,500 amounts under subsection (b)(1) shall be 
        increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the applicable inflation adjustment for the 
                calendar year in which the taxable year begins.
            ``(2) Applicable inflation adjustment.--For purposes of 
        paragraph (1), the applicable inflation adjustment for any 
        calendar year is the percentage (if any) by which--
                    ``(A) the gross national product deflator for the 
                last calendar quarter of the preceding calendar year, 
                exceeds
                    ``(B) the gross national product deflator for the 
                last calendar quarter of 1991.
        For purposes of this paragraph, the term `gross national 
        product deflator' has the meaning given such term by section 
        1022(c)(3).''.

SEC. 6. EFFECTIVE DATE.

    The amendments made by this Act shall apply to taxable years 
beginning after December 31, 1992.