I

104TH CONGRESS

1ST SESSION H. R. 1142

To amend the Internal Revenue Code of 1986 to repeal the alternative

minimum tax.

IN THE HOUSE OF REPRESENTATIVES

MARCH 7, 1995

Mr. ENGLISH of Pennsylvania introduced the following bill; which was referred

to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to repeal

the alternative minimum tax.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Alternative Minimum Tax Repeal Act of 1995’’.

6 (b) AMENDMENT OF 1986 CODE.—Except as other7 wise expressly provided, whenever in this Act an amend8 ment or repeal is expressed in terms of an amendment

9 to, or repeal of, a section or other provision, the reference
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1 shall be considered to be made to a section or other provi2 sion of the Internal Revenue Code of 1986.

3 SEC. 2. ALTERNATIVE MINIMUM TAX.

4 (a) IN GENERAL.—Part VI of subchapter A of chap5 ter 1 of the Internal Revenue Code of 1986 (relating to

6 alternative minimum tax) is hereby repealed.

7 (b) CONFORMING AMENDMENTS.—

8 (1) Subparagraph (B) of section 1(g)(7) (relat9 ing to election to claim certain unearned income of

10 child on parent’s return) is amended—

11 (A) by inserting ‘‘and’’ at the end of clause

12 (i),

13 (B) by striking ‘‘and’’ and the end of

14 clause (ii) and inserting a period, and

15 (C) by striking clause (iii).

16 (2) Subsection (d) of section 2 (relating to

17 taxes imposed on nonresident aliens) is amended by

18 striking ‘‘sections 1 and 55’’ and inserting ‘‘section

19 1’’.

20 (3) Subsection (a) of section 5 (relating to cross

21 references relating to tax on individuals) is amended

22 by striking paragraph (4).

23 (4) Subsection (d) of section 11 (relating to

24 taxes imposed on foreign corporations) is amended

25 by striking ‘‘the taxes imposed by subsection (a) and
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1 section 55’’ and inserting ‘‘the tax imposed by sub2 section (a)’’.

3 (5) Section 12 (relating to cross references re4 lating to tax on corporations) is amended by striking

5 paragraph (7).

6 (6) Section 26 (relating to limitation based on

7 tax liability; definition of tax liability) is amended—

8 (A) by amending subsection (a) to read as

9 follows:

10 ‘‘(a) LIMITATION BASED ON AMOUNT OF TAX.—The

11 aggregate amount of credits allowed by this subpart for

12 the taxable year shall not exceed the taxpayer’s regular

13 tax liability for the taxable year.’’,

14 (B) in subsection (b)(2), by striking sub15 paragraph (A) and by redesignating subpara16 graphs (B) through (N) as subparagraphs (A)

17 through (M), respectively, and

18 (C) by striking subsection (c).

19 (7) Paragraph (3) of section 30(b) (relating to

20 credit for qualified electric vehicles) is amended by

21 striking ‘‘the excess’’ and all that follows and insert22 ing ‘‘the regular tax for the taxable year reduced by

23 the sum of the credits allowable under subpart A

24 and sections 27, 28, and 29.’’
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1 (8) Subsection (h) of section 32 (relating to re2 duction of credit to taxpayers subject to alternative

3 minimum tax) is hereby repealed.

4 (9) Subsection (c) of section 38 (relating to

5 business related credits) is amended—

6 (A) by striking paragraphs (1) and (2) and

7 inserting the following new paragraph:

8 ‘‘(1) IN GENERAL.—The credit allowed under

9 subsection (a) for any taxable year shall not exceed

10 25 percent of so much of the taxpayer’s net regular

11 tax liability as exceeds $25,000. For purposes of the

12 preceding sentence, the term ‘net regular tax liabil13 ity’ means the regular tax liability reduced by the

14 sum of the credits allowable under subparts A and

15 B of this part.’’, and

16 (B) by redesignating paragraph (3) as

17 paragraph (2).

18 (10) Subsection (c) of section 53 is amended by

19 striking ‘‘the excess’’ and all that follows and insert20 ing ‘‘the regular tax liability of the taxpayer for such

21 taxable year reduced by the sum of the credits allow22 able under subparts A, B, D, E, and F of this part.’’

23 (11) Subsection (b) of section 59A (relating to

24 environmental tax) is amended by adding at the end

25 the following:
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1 ‘‘For purposes of this subsection, references to sections

2 55 and 56 shall be treated as references to such sections

3 as in effect on the day before the date of the enactment

4 of the Alternative Minimum Tax Repeal Act of 1995.’’.

5 (12)(A) Paragraph (2) of section 148(b) is

6 amended by adding at the end the following new

7 flush sentence:

8 ‘‘Such term shall not include any tax-exempt bond.’’

9 (B) Paragraph (3) of section 148(b) (relating

10 to higher yield investments) is hereby repealed.

11 (13) Subparagraph (B) of section 149(g)(3)

12 (relating to hedge bonds) is amended by striking all

13 that follows ‘‘invested in bonds’’ and inserting ‘‘the

14 interest on which is not includible in gross income

15 under section 103.’’

16 (14) Section 173 (relating to circulation ex17 penditures) is amended by striking ‘‘(a) GENERAL

18 RULE.—’’ and by striking subsection (b).

19 (15) Subsection (f) of section 174 (relating to

20 research and experimental expenditures) is amended

21 to read as follows:
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1 ‘‘(f) CROSS REFERENCE.—

‘‘For adjustments to basis of property for amounts

allowed as deductions as deferred expenses under

subsection (b), see section 1016(a)(14).’’

2 (16) Subsection (c) of section 263 (relating to

3 capital expenditures) is amended by striking ‘‘59(e)

4 or’’.

5 (17) Subsection (c) of section 263A (relating to

6 capitalization and inclusion in inventory costs of cer7 tain expenses) is amended by striking paragraph (6).

8 (18) Section 382(l) (relating to net operating

9 loss carryforwards and certain built-in losses follow10 ing ownership change) is amended by striking para11 graph (7).

12 (19) Section 443 (relating to adjustment in

13 computing minimum tax and tax preferences) is

14 amended by striking subsection (d) and by redesig15 nating subsection (e) as subsection (d).

16 (20) Section 617 (relating to deduction and re17 capture of certain mining exploration expenditures)

18 is amended by striking subsection (i).

19 (21) Subsections (b) and (c) of section 666 (re20 lating to accumulation distribution of trust allocated

21 to preceding years) are each amended by striking

22 ‘‘(other than the tax imposed by section 55)’’.

23 (22) Section 847 (relating to special estimated

24 tax payments) is amended—
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1 (A) in paragraph (9), by striking the last

2 sentence;

3 (B) in paragraph (10), by inserting ‘‘and’’

4 at the end of subparagraph (A) and by striking

5 subparagraph (B) and redesignating subpara6 graph (C) as subparagraph (B).

7 (23) Section 848 (relating to capitalization of

8 certain policy acquisition expenses) is amended by

9 striking subsection (i) and by redesignating sub10 section (j) as subsection (i).

11 (24) Paragraph (1) of section 871(b) (relating

12 to tax on nonresident alien individuals) is amended

13 by striking ‘‘, 55,’’.

14 (25) Subsection (b) of section 877 (relating to

15 expatriation to avoid tax) is amended by striking

16 ‘‘, 55,’’.

17 (26) Paragraph (1) of section 882(a) is amend18 ed by striking ‘‘55,’’.

19 (27) Subsection (a) of section 897 (relating to

20 disposition of investment in United States real prop21 erty) is amended to read as follows:

22 ‘‘(a) TREATMENT AS EFFECTIVELY CONNECTED

23 WITH UNITED STATES TRADE OR BUSINESS.—For pur24 poses of this title, gain or loss of a nonresident alien indi25 vidual or a foreign corporation from the disposition of a
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1 United States real property interest shall be taken into

2 account—

3 ‘‘(1) in the case of a nonresident alien individ4 ual, under section 871(b)(1), or

5 ‘‘(2) in the case of a foreign corporation, under

6 section 8872(a)(1),

7 as if the taxpayer were engaged in a trade or business

8 within the United States during the taxable year and as

9 if such gain or loss were effectively connected with such

10 trade or business.’’

11 (28) Subsection (j) of section 904 (relating to

12 limitation on credit) is amended to read as follows:

13 ‘‘(j) CROSS REFERENCE.—

‘‘For increase of limitation under subsection (a)

for taxes paid with respect to amounts received

which were included in the gross income of the taxpayer for a prior taxable year as a United States

shareholder with respect to a controlled foreign corporation, see section 960(b).’’

14 (29) Paragraph (1) of section 962(a) (relating

15 to election by individuals to be subject to tax at cor16 porate rates) is amended—

17 (A) by striking ‘‘sections 1 and 55’’ and

18 inserting ‘‘section 1’’, and

19 (B) by striking ‘‘sections 11 and 55’’ and

20 inserting ‘‘section 11’’.

21 (30) Paragraph (20) of section 1016(a) (relat22 ing to adjustments to basis) is amended by inserting
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1 ‘‘, as in effect on the day before the date of the en2 actment of the Alternative Minimum Tax Repeal Act

3 of 1995’’ after ‘‘preferences)’’.

4 (31) Subsection (a) of section 1561 (relating to

5 limitations on certain multiple tax benefits in the

6 case of certain controlled corporations) is amended

7 by striking the last sentence.

8 (32) Subparagraph (A) of section 6425(c)(1)

9 (defining income tax liability) is amended—

10 (A) by inserting ‘‘plus’’ at the end of

11 clause (i), and

12 (B) by striking clause (ii) and by redesig13 nating clause (iii) as clause (ii).

14 (33) Section 6654(d)(2) (relating to failure by

15 individual to pay estimated income tax) is amend16 ed—

17 (A) in clause (i) of subparagraph (B), by

18 striking ‘‘, alternative minimum taxable in19 come,’’, and

20 (B) in clause (i) of subparagraph (C), by

21 striking ‘‘, alternative minimum taxable in22 come,’’.

23 (34) Subparagraph (C) of section 6662(e)(3)

24 (relating to accuracy-related penalty) is amended by

25 inserting ‘‘, as in effect on the day before the date
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1 of the enactment of the Alternative Minimum Tax

2 Repeal Act of 1995’’ after ‘‘55(c)’’.

3 (c) CLERICAL AMENDMENTS.—The table of parts for

4 subchapter A of chapter 1 is amended by striking the item

5 relating to part VI.

6 (d) EFFECTIVE DATE.—The amendments made by

7 this section shall take effect in taxable years beginning

8 after December 31, 1994.

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