I

103D CONGRESS

1ST SESSION H. R. 579

To amend the Internal Revenue Code of 1986 to provide that the disallowance

of deductions for personal interest shall not apply to interest on loans

used to buy highway vehicles.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 26, 1993

Mr. CARR 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 provide

that the disallowance of deductions for personal interest

shall not apply to interest on loans used to buy highway

vehicles.

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

3 SECTION 1. DEDUCTION FOR INTEREST ON LOANS FOR

4 CERTAIN HIGHWAY VEHICLES.

5 (a) IN GENERAL.—Paragraph (2) of section 163(h)

6 of the Internal Revenue Code of 1986 (relating to dis7 allowance of deduction for personal interest) is amended

8 by striking ‘‘and’’ at the end of subparagraph (D), by re-
2

•HR 579 IH

1 designating subparagraph (E) as subparagraph (F), and

2 by inserting after subparagraph (D) the following new

3 subparagraph:

4 ‘‘(E) any qualified vehicle interest (as de5 fined in paragraph (5)), and’’.

6 (b) QUALIFIED VEHICLE INTEREST.—Section 163(h)

7 of such Code is amended by redesignating paragraph (5)

8 as paragraph (6) and by inserting after paragraph (4) the

9 following new paragraph:

10 ‘‘(5) QUALIFIED VEHICLE INTEREST DE11 FINED.—

12 ‘‘(A) IN GENERAL.—For purposes of para13 graph (2)(E), the term ‘qualified vehicle inter14 est’ means any interest on indebtedness secured

15 by qualified vehicle which is incurred in acquir16 ing such vehicle.

17 ‘‘(B) QUALIFIED VEHICLE.—

18 ‘‘(i) IN GENERAL.—For purposes of

19 this paragraph, the term ‘qualified vehicle’

20 means any 4-wheeled vehicle propelled by

21 fuel if—

22 ‘‘(I) such vehicle is manufactured

23 primarily for use on public streets,

24 roads, and highways (except any vehi-
3

•HR 579 IH

1 cle operated exclusively on a rail or

2 rails),

3 ‘‘(II) such vehicle is of a model

4 year not earlier than the second model

5 year preceding the model year during

6 which the vehicle is purchased by the

7 taxpayer, and

8 ‘‘(III) such vehicle is designated

9 by the taxpayer for purposes of this

10 paragraph.

11 ‘‘(ii) LIMITATION ON NUMBER OF VE12 HICLES WHICH MAY BE DESIGNATED.—A

13 vehicle may be designated under clause

14 (i)(III) only if such a designation by the

15 taxpayer is not in effect with respect to—

16 ‘‘(I) any other vehicle, or

17 ‘‘(II) in the case of a joint re18 turn, more than 1 other vehicle.

19 ‘‘(C) REDUCTION OF INTEREST DEDUC20 TION FOR VEHICLES COSTING MORE THAN

21 $20,000.—If the purchase price of the des22 ignated vehicle exceeds $20,000, the amount

23 which would (but for this subparagraph) be

24 treated as qualified vehicle interest for any tax25 able year with respect to indebtedness secured
4

•HR 579 IH

1 by such vehicle shall be reduced by the amount

2 which bears the same ratio to such interest for

3 such year as such excess bears to the purchase

4 price of the vehicle.’’

5 (c) EFFECTIVE DATE.—The amendments made by

6 this section shall apply to vehicles purchased after Janu7 ary 26, 1993.

Æ