I

106TH CONGRESS

1ST SESSION H. R. 1561

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

minimum tax on individuals.

IN THE HOUSE OF REPRESENTATIVES

APRIL 26, 1999

Mr. CRANE 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 on individuals.

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.

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

5 ‘‘Tax Equity Preservation Act of 1999’’.

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. REPEAL OF ALTERNATIVE MINIMUM TAX ON INDI4 VIDUALS.

5 (a) IN GENERAL.—Subsection (a) of section 55 (re6 lating to alternative minimum tax imposed) is amended

7 by adding at the end the following new flush sentence:

8 ‘‘Except in the case of a corporation, no tax shall be im9 posed by this section for any taxable year beginning after

10 December 31, 1998, and the tentative minimum tax of any

11 taxpayer other than a corporation shall be zero for pur12 poses of this title.’’

13 (b) CONFORMING AMENDMENTS.—

14 (1) Subparagraph (B) of section 1(g)(7) is

15 amended by adding ‘‘and’’ at the end of clause (i),

16 by striking ‘‘, and’’ at the end of clause (ii) and in17 serting a period, and by striking clause (iii).

18 (2) Section 2(d) is amended by striking ‘‘sec19 tions 1 and 55’’ and inserting ‘‘section 1’’

20 (3) Section 5(a) is amended by striking para21 graph (4).

22 (4) Subsection (d) of section 24 is amended by

23 striking paragraph (2) and by redesignating para24 graph (3) as paragraph (2).
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1 (5) Subsection (c) of section 26 is amended by

2 inserting before the period ‘‘; except that such

3 amount shall be treated as being zero in the case of

4 a taxpayer other than a corporation.’’

5 (6) Paragraph (6) of section 29(b) is amended

6 to read as follows:

7 ‘‘(6) APPLICATION WITH OTHER CREDITS.—

8 The credit allowed by subsection (a) for any taxable

9 year shall not exceed the regular tax for the taxable

10 year reduced by the sum of the credits allowable

11 under subpart A and section 27. In the case of a

12 corporation, the limitation under the preceding sen13 tence shall be reduced (but not below zero) by the

14 tentative minimum tax for the taxable year.’’.

15 (7) Paragraph (3) of section 30(b) is amended

16 to read as follows:

17 ‘‘(3) APPLICATION WITH OTHER CREDITS.—

18 The credit allowed by subsection (a) for any taxable

19 year shall not exceed the regular tax for the taxable

20 year reduced by the sum of the credits allowable

21 under subpart A and sections 27 and 29. In the case

22 of a corporation, the limitation under the preceding

23 sentence shall be reduced (but not below zero) by the

24 tentative minimum tax for the taxable year.’’.
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1 (8) Section 32 is amended by striking sub2 section (h).

3 (9) Subsection (d) of section 53(d) is amended

4 to read as follows:

5 ‘‘(d) DEFINITIONS.—For purposes of this section—

6 ‘‘(1) NET MINIMUM TAX.—The term ‘net min7 imum tax’ means the tax imposed by section 55 in8 creased by the amount of the credit not allowed

9 under section 29 (relating to credit for producing

10 fuel from a nonconventional source) solely by reason

11 of the application of the last sentence of section

12 29(b)(6), or not allowed under section 30 solely by

13 reason of the application of the last sentence of sec14 tion 30(b)(3).

15 ‘‘(2) TENTATIVE MINIMUM TAX.—The term

16 ‘tentative minimum tax’ has the meaning given to

17 such term by section 55(b); except that such tax

18 shall be treated as being zero in the case of a tax19 payer other than a corporation.’’.

20 (10)(A) Subsection (b) of section 55 (relating

21 to alternative minimum tax imposed) is amended to

22 read as follows:

23 ‘‘(b) TENTATIVE MINIMUM TAX.—For purposes of

24 this part—
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1 ‘‘(1) AMOUNT OF TENTATIVE TAX.—The ten2 tative minimum tax for the taxable year is—

3 ‘‘(A) 20 percent of so much of the alter4 native minimum taxable income for the taxable

5 year as exceeds the exemption amount, reduced

6 by

7 ‘‘(B) the alternative minimum tax foreign

8 tax credit for the taxable year.

9 ‘‘(2) ALTERNATIVE MINIMUM TAXABLE IN10 COME.—The term ‘alternative minimum taxable in11 come’ means the taxable income of the taxpayer for

12 the taxable year—

13 ‘‘(A) determined with the adjustments pro14 vided in section 56, and

15 ‘‘(B) increased by the amount of the items

16 of tax preference described in section 57.

17 If a taxpayer is subject to the regular tax, such tax18 payer shall be subject to the tax imposed by this sec19 tion (and, if the regular tax is determined by ref20 erence to an amount other than taxable income, such

21 amount shall be treated as the taxable income of

22 such taxpayer for purposes of the preceding sen23 tence).’’.

24 (B) Subsection (d) of section 55 is amended to

25 read as follows:
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1 ‘‘(d) EXEMPTION AMOUNT.—For purposes of this

2 section—

3 ‘‘(1) IN GENERAL.—The term ‘exemption

4 amount’ means $40,000.

5 ‘‘(2) PHASE-OUT OF EXEMPTION AMOUNT.—

6 The exemption amount of any taxpayer shall be re7 duced (but not below zero) by an amount equal to

8 25 percent of the amount by which the alternative

9 minimum taxable income of the taxpayer exceeds

10 $150,000.’’.

11 (11)(A) Paragraph (6) of section 56(a) is

12 amended to read as follows:

13 ‘‘(6) ADJUSTED BASIS.—The adjusted basis of

14 any property to which paragraph (1) or (5) applies

15 (or with respect to which there are any expenditures

16 to which paragraph (2) applies) shall be determined

17 on the basis of the treatment prescribed in para18 graph (1), (2), or (5), whichever applies.’’.

19 (B) Section 56 is amended by striking sub20 section (b).

21 (C) Subsection (c) of section 56 is amended by

22 striking so much of the subsection as precedes para23 graph (1), by redesignating paragraphs (1), (2), and

24 (3) as paragraphs (8), (9), and (10), respectively,

25 and moving them to the end of subsection (a).
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1 (D) Paragraph (8) of section 56(a), as redesig2 nated by subparagraph (C), is amended by striking

3 ‘‘subsection (g)’’ and inserting ‘‘subsection (c)’’.

4 (E) Section 56 is amended by striking sub5 section (e) and by redesignating subsections (d) and

6 (g) as subsections (b) and (c), respectively.

7 (12)(A) Section 58 is hereby repealed.

8 (B) Clause (i) of section 56(b)(2)(A) (as redes9 ignated by paragraph (11)(E)), is amended by in10 serting ‘‘, in the case of taxable years beginning be11 fore January 1, 1999,’’ before ‘‘section 58’’.

12 (C) Subsection (h) of section 59 is amended—

13 (i) by striking ‘‘, 465, and 1366(d)’’ and

14 inserting ‘‘and 465’’, and

15 (ii) by striking ‘‘56, 57, and 58’’ and in16 serting ‘‘56 and 57’’.

17 (13)(A) Subparagraph (C) of section 59(a)(1)

18 is amended by striking ‘‘subparagraph (A)(i) or

19 (B)(i) of section 55(b)(1) (whichever applies)’’ and

20 inserting ‘‘section 55(b)(1)(A)’’.

21 (B) Paragraph (3) of section 59(a) is amended

22 to read as follows:

23 ‘‘(3) PRE-CREDIT TENTATIVE MINIMUM TAX.—

24 For purposes of this subsection, the term ‘pre-credit
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1 tentative minimum tax’ means the amount deter2 mined under section 55(b)(1)(A).’’.

3 (C) Section 59 is amended by striking sub4 section (c).

5 (D) Section 59 is amended by striking sub6 section (j).

7 (14) Paragraph (7) of section 382(l) is amend8 ed by striking ‘‘section 56(d)’’ and inserting ‘‘section

9 56(b)’’.

10 (15) Paragraph (2) of section 641(c) is amend11 ed by striking subparagraph (B) and by redesig12 nating subparagraphs (C) and (D) as subparagraphs

13 (B) and (C), respectively.

14 (16) Subsections (b) and (c) of section 666 are

15 each amended by striking ‘‘(other than the tax im16 posed by section 55)’’.

17 (17) Subsections (c)(5) and (d)(3)(B) of section

18 772 are each amended by striking ‘‘56, 57, and 58’’

19 and inserting ‘‘56 and 57’’.

20 (18) Sections 847 and 848(i) are each amended

21 by striking ‘‘section 56(g)’’ and inserting ‘‘section

22 56(c)’’.

23 (19) Sections 871(b)(1) and 877(b) are each

24 amended by striking ‘‘or 55’’.
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1 (20) Subsection (a) of section 897 is amended

2 to read as follows:

3 ‘‘(a) GENERAL RULE.—For purposes of this title,

4 gain or loss of a nonresident alien individual or a foreign

5 corporation from the disposition of a United States real

6 property interest shall be taken into account—

7 ‘‘(1) in the case of a nonresident alien indi8 vidual, under section 871(b)(1), or

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

10 section 882(a)(1),

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

12 within the United States during the taxable year and as

13 if such gain or loss were effectively connected with such

14 trade or business.’’.

15 (21) Paragraph (1) of section 962(a) is amend16 ed by striking ‘‘sections 1 and 55’’ and inserting

17 ‘‘section 1’’.

18 (22) Paragraph (1) of section 1397E(c) is

19 amended to read as follows:

20 ‘‘(1) the regular tax liability (as defined in sec21 tion 26(b), over’’

22 (23) The last sentence of section 1563(a) is

23 amended by striking ‘‘section 55(d)(3)’’ and insert24 ing ‘‘section 55(d)(2)’’.
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1 (24) Subparagraph (B) of section 6015(d)(2) is

2 amended by striking ‘‘or 55’’.

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

4 this section shall apply to taxable years beginning after

5 December 31, 1998.

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