To amend the Internal Revenue Code of 1986 to repeal the adjusted gross income limitations on itemized deductions, the personal exemption deduction, and the child tax credit and to repeal the alternative minimum tax on individuals.

SECTION 1. SHORT TITLE.

    (a) Short Title.--This Act may be cited as the ``Family Values Tax 
Relief Act of 2001''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.

SEC. 2. REPEAL OF OVERALL LIMITATION ON ITEMIZED DEDUCTIONS.

    (a) In General.--Section 68 (relating to overall limitation on 
itemized deductions) is hereby repealed.
    (b) Technical Amendments.--
            (1) Subparagraph (A) of section 1(f)(6) is amended by 
        striking ``section 68(b)(2)''.
            (2) Paragraph (1) of section 56(b) is amended by striking 
        subparagraph (F).
            (3) Subparagraph (B) of section 773(a)(3) is amended by 
        striking clause (i) and by redesignating clauses (ii), (iii), 
        and (iv) as clauses (i), (ii), and (iii), respectively.
            (4) The table of sections for part I of subchapter B of 
        chapter 1 is amended by striking the item relating to section 
        68.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2000.

SEC. 3. REPEAL OF PHASEOUT OF PERSONAL EXEMPTIONS.

    (a) In General.--Subsection (d) of section 151 (relating to 
exemption amount) is amended by striking paragraph (3).
    (b) Technical Amendments.--
            (1) Paragraph (6) of section 1(f) is amended--
                    (A) by striking ``section 151(d)(4)'' in 
                subparagraph (A) and inserting ``section 151(d)(3)'', 
                and
                    (B) by striking ``section 151(d)(4)(A)'' in 
                subparagraph (B) and inserting ``section 151(d)(3)''.
            (2) Paragraph (4) of section 151(d) is amended to read as 
        follows:
            ``(3) Inflation adjustment.--In the case of any taxable 
        year beginning in a calendar year after 1989, the dollar amount 
        contained in paragraph (1) shall be increased by an amount 
        equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, by substituting `calendar year 
                1988' for `calendar year 1992' in subparagraph (B) 
                thereof.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2000.

SEC. 4. REPEAL OF ADJUSTED GROSS INCOME LIMITATION IN CHILD TAX CREDIT.

    (a) In General.--Section 24 (relating to child tax credit) is 
amended by striking subsection (b) and by redesignating subsections (c) 
through (f) as subsections (b) through (e), respectively.
    (b) Conforming Amendment.--Clause (ii) of section 32(n)(1)(B) is 
amended by striking ``section 24(d)'' and inserting ``section 24(c)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2000.

SEC. 5. REPEAL OF ALTERNATIVE MINIMUM TAX ON INDIVIDUALS.

    (a) In General.--Subsection (a) of section 55 (relating to 
alternative minimum tax imposed) is amended by adding at the end the 
following new flush sentence:
``Except in the case of a corporation, no tax shall be imposed by this 
section for any taxable year beginning after December 31, 2000, and the 
tentative minimum tax of any taxpayer other than a corporation shall be 
zero for purposes of this title.''
    (b) Conforming Amendments.--
            (1) Subparagraph (B) of section 1(g)(7) is amended by 
        adding ``and'' at the end of clause (i), by striking ``, and'' 
        at the end of clause (ii) and inserting a period, and by 
        striking clause (iii).
            (2) Section 2(d) is amended by striking ``sections 1 and 
        55'' and inserting ``section 1''.
            (3) Section 5(a) is amended by striking paragraph (4).
            (4) Subsection (c) of section 24, as redesignated by 
        section 4, is amended by striking paragraph (2) and by 
        redesignating paragraph (3) as paragraph (2).
            (5)(A) Subsection (a) of section 26 is amended to read as 
        follows:
    ``(a) Limitation Based on Amount of Tax.--The aggregate amount of 
credits allowed by this subpart for the taxable year shall not exceed 
the taxpayer's regular tax liability for the taxable year.''
            (B) Subsection (c) of section 26 is amended by inserting 
        before the period ``; except that such amount shall be treated 
        as being zero in the case of a taxpayer other than a 
        corporation.''
            (6) Paragraph (6) of section 29(b) is amended to read as 
        follows:
            ``(6) Application with other credits.--The credit allowed 
        by subsection (a) for any taxable year shall not exceed the 
        regular tax for the taxable year reduced by the sum of the 
        credits allowable under subpart A and section 27. In the case 
        of a corporation, the limitation under the preceding sentence 
        shall be reduced (but not below zero) by the tentative minimum 
        tax for the taxable year.''.
            (7) Paragraph (3) of section 30(b) is amended to read as 
        follows:
            ``(3) Application with other credits.--The credit allowed 
        by subsection (a) for any taxable year shall not exceed the 
        regular tax for the taxable year reduced by the sum of the 
        credits allowable under subpart A and sections 27 and 29. In 
        the case of a corporation, the limitation under the preceding 
        sentence shall be reduced (but not below zero) by the tentative 
        minimum tax for the taxable year.''.
            (8) Section 32 is amended by striking subsection (h).
            (9) Subsection (d) of section 53(d) is amended to read as 
        follows:
    ``(d) Definitions.--For purposes of this section--
            ``(1) Net minimum tax.--The term `net minimum tax' means 
        the tax imposed by section 55 increased by the amount of the 
        credit not allowed under section 29 (relating to credit for 
        producing fuel from a nonconventional source) solely by reason 
        of the application of the last sentence of section 29(b)(6), or 
        not allowed under section 30 solely by reason of the 
        application of the last sentence of section 30(b)(3).
            ``(2) Tentative minimum tax.--The term `tentative minimum 
        tax' has the meaning given to such term by section 55(b); 
        except that such tax shall be treated as being zero in the case 
        of a taxpayer other than a corporation.''.
            (10)(A) Subsection (b) of section 55 (relating to 
        alternative minimum tax imposed) is amended to read as follows:
    ``(b) Tentative Minimum Tax.--For purposes of this part--
            ``(1) Amount of tentative tax.--The tentative minimum tax 
        for the taxable year is--
                    ``(A) 20 percent of so much of the alternative 
                minimum taxable income for the taxable year as exceeds 
                the exemption amount, reduced by
                    ``(B) the alternative minimum tax foreign tax 
                credit for the taxable year.
            ``(2) Alternative minimum taxable income.--The term 
        `alternative minimum taxable income' means the taxable income 
        of the taxpayer for the taxable year--
                    ``(A) determined with the adjustments provided in 
                section 56, and
                    ``(B) increased by the amount of the items of tax 
                preference described in section 57.
        If a taxpayer is subject to the regular tax, such taxpayer 
        shall be subject to the tax imposed by this section (and, if 
        the regular tax is determined by reference to an amount other 
        than taxable income, such amount shall be treated as the 
        taxable income of such taxpayer for purposes of the preceding 
        sentence).''.
            (B) Subsection (d) of section 55 is amended to read as 
        follows:
    ``(d) Exemption Amount.--For purposes of this section--
            ``(1) In general.--The term `exemption amount' means 
        $40,000.
            ``(2) Phase-out of exemption amount.--The exemption amount 
        of any taxpayer shall be reduced (but not below zero) by an 
        amount equal to 25 percent of the amount by which the 
        alternative minimum taxable income of the taxpayer exceeds 
$150,000.''.
            (11)(A) Paragraph (6) of section 56(a) is amended to read 
        as follows:
            ``(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) applies) 
        shall be determined on the basis of the treatment prescribed in 
        paragraph (1), (2), or (5), whichever applies.''.
            (B) Section 56 is amended by striking subsection (b).
            (C) Subsection (c) of section 56 is amended by striking so 
        much of the subsection as precedes paragraph (1), by 
        redesignating paragraphs (1), (2), and (3) as paragraphs (8), 
        (9), and (10), respectively, and moving them to the end of 
        subsection (a).
            (D) Paragraph (8) of section 56(a), as redesignated by 
        subparagraph (C), is amended by striking ``subsection (g)'' and 
        inserting ``subsection (c)''.
            (E) Section 56 is amended by striking subsection (e) and by 
        redesignating subsections (d) and (g) as subsections (b) and 
        (c), respectively.
            (12)(A) Section 58 is hereby repealed.
            (B) Clause (i) of section 56(b)(2)(A) (as redesignated by 
        paragraph (11)(E)), is amended by inserting ``, in the case of 
        taxable years beginning before January 1, 2001,'' before 
        ``section 58''.
            (C) Subsection (h) of section 59 is amended--
                    (i) by striking ``, 465, and 1366(d)'' and 
                inserting ``and 465'', and
                    (ii) by striking ``56, 57, and 58'' and inserting 
                ``56 and 57''.
            (13)(A) Subparagraph (C) of section 59(a)(1) is amended by 
        striking ``subparagraph (A)(i) or (B)(i) of section 55(b)(1) 
        (whichever applies)'' and inserting ``section 55(b)(1)(A)''.
            (B) Paragraph (3) of section 59(a) is amended to read as 
        follows:
            ``(3) Pre-credit tentative minimum tax.--For purposes of 
        this subsection, the term `pre-credit tentative minimum tax' 
        means the amount determined under section 55(b)(1)(A).''.
            (C) Section 59 is amended by striking subsection (c).
            (D) Section 59 is amended by striking subsection (j).
            (14) Paragraph (7) of section 382(l) is amended by striking 
        ``section 56(d)'' and inserting ``section 56(b)''.
            (15) Paragraph (2) of section 641(c) is amended by striking 
        subparagraph (B) and by redesignating subparagraphs (C) and (D) 
        as subparagraphs (B) and (C), respectively.
            (16) Subsections (b) and (c) of section 666 are each 
        amended by striking ``(other than the tax imposed by section 
        55)''.
            (17) Subsections (c)(5) and (d)(3)(B) of section 772 are 
        each amended by striking ``56, 57, and 58'' and inserting ``56 
        and 57''.
            (18) Sections 847 and 848(i) are each amended by striking 
        ``section 56(g)'' and inserting ``section 56(c)''.
            (19) Sections 871(b)(1) and 877(b) are each amended by 
        striking ``or 55''.
            (20) Subsection (a) of section 897 is amended to read as 
        follows:
    ``(a) General Rule.--For purposes of this title, gain or loss of a 
nonresident alien individual or a foreign corporation from the 
disposition of a United States real property interest shall be taken 
into account--
            ``(1) in the case of a nonresident alien individual, under 
        section 871(b)(1), or
            ``(2) in the case of a foreign corporation, under section 
        882(a)(1),
as if the taxpayer were engaged in a trade or business within the 
United States during the taxable year and as if such gain or loss were 
effectively connected with such trade or business.''.
            (21) Paragraph (1) of section 962(a) is amended by striking 
        ``sections 1 and 55'' and inserting ``section 1''.
            (22) Paragraph (1) of section 1397E(c) is amended to read 
        as follows:
            ``(1) the regular tax liability (as defined in section 
        26(b), over''.
            (23) The last sentence of section 1563(a) is amended by 
        striking ``section 55(d)(3)'' and inserting ``section 
        55(d)(2)''.
            (24) Subparagraph (B) of section 6015(d)(2) is amended by 
        striking ``or 55''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2000.

Summary: Family Values Tax Relief Act of 2001 - Amends the Internal Revenue Code to repeal the: (1) overall limitation on itemized deductions, (2) phaseout of personal exemptions. And (3) adjusted gross income limitation on the child tax credit, and (4) alternative minimum tax on individuals.