104TH CONGRESS

1ST SESSION H. R. 831

AN ACT

To amend the Internal Revenue Code of 1986 to permanently

extend the deduction for the health insurance costs of

self-employed individuals, to repeal the provision permitting nonrecognition of gain on sales and exchanges effectuating policies of the Federal Communications Commission, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. PERMANENT EXTENSION OF DEDUCTION FOR

2 HEALTH INSURANCE COSTS OF SELF-EM3 PLOYED INDIVIDUALS.

4 (a) IN GENERAL.—Subsection (l) of section 162 of

5 the Internal Revenue Code of 1986 (relating to special

6 rules for health insurance costs of self-employed individ7 uals) is amended by striking paragraph (6).

8 (b) EFFECTIVE DATE.—The amendment made by

9 subsection (a) shall apply to taxable years beginning after

10 December 31, 1993.

11 SEC. 2. REPEAL OF NONRECOGNITION ON FCC CERTIFIED

12 SALES AND EXCHANGES.

13 (a) IN GENERAL.—Subchapter O of chapter 1 of the

14 Internal Revenue Code of 1986 is amended by striking

15 part V (relating to changes to effectuate FCC policy).

16 (b) CLERICAL AMENDMENT.—The table of parts for

17 such subchapter O is amended by striking the item relat18 ing to part V.

19 (c) EFFECTIVE DATE.—

20 (1) IN GENERAL.—The amendments made by

21 this section shall apply to—

22 (A) sales and exchanges on or after Janu23 ary 17, 1995, and

24 (B) sales and exchanges before such date

25 if the FCC tax certificate with respect to such

26 sale or exchange is issued on or after such date.
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1 (2) BINDING CONTRACTS.—

2 (A) IN GENERAL.—The amendments made

3 by this section shall not apply to any sale or ex4 change pursuant to a written contract which

5 was binding on January 16, 1995, and at all

6 times thereafter before the sale or exchange, if

7 the FCC tax certificate with respect to such

8 sale or exchange was applied for, or issued, on

9 or before such date.

10 (B) SALES CONTINGENT ON ISSUANCE OF

11 CERTIFICATE.—A contract shall be treated as

12 not binding for purposes of subparagraph (A) if

13 the sale or exchange pursuant to such contract,

14 or the material terms of such contract, were

15 contingent, at any time on January 16, 1995,

16 on the issuance of an FCC tax certificate. The

17 preceding sentence shall not apply if the FCC

18 tax certificate for such sale or exchange is is19 sued on or before January 16, 1995.

20 (3) FCC TAX CERTIFICATE.—For purposes of

21 this subsection, the term ‘‘FCC tax certificate’’

22 means any certificate of the Federal Communica23 tions Commission for the effectuation of section

24 1071 of the Internal Revenue Code of 1986 (as in
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1 effect on the day before the date of the enactment

2 of this Act).

3 SEC. 3. NONRECOGNITION ON INVOLUNTARY CONVER4 SIONS NOT TO APPLY IF REPLACEMENT

5 PROPERTY ACQUIRED FROM RELATED PER6 SON.

7 (a) IN GENERAL.—Section 1033 of the Internal Rev8 enue Code of 1986 (relating to involuntary conversions)

9 is amended by redesignating subsection (i) as subsection

10 (j) and by inserting after subsection (h) the following new

11 subsection:

12 ‘‘(i) NONRECOGNITION NOT TO APPLY IF REPLACE13 MENT PROPERTY ACQUIRED FROM RELATED PERSON.—

14 Subsection (a) shall not apply if the replacement property

15 or stock acquired is acquired from a related person. For

16 purposes of the preceding sentence, a person is related to

17 another person if the relationship between such persons

18 would result in a disallowance of losses under section 267

19 or 707(b).’’

20 (b) EFFECTIVE DATE.—The amendment made by

21 subsection (a) shall apply to replacement property or stock

22 acquired on or after February 6, 1995.
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1 SEC. 4. PHASEOUT OF EARNED INCOME CREDIT FOR INDI2 VIDUALS HAVING MORE THAN $2,500 OF TAX3 ABLE INTEREST AND DIVIDENDS.

4 (a) IN GENERAL.—Section 32 of the Internal Reve5 nue Code of 1986 is amended by redesignating subsections

6 (i) and (j) as subsections (j) and (k), respectively, and by

7 inserting after subsection (h) the following new subsection:

8 ‘‘(i) PHASEOUT OF CREDIT FOR INDIVIDUALS HAV9 ING MORE THAN $2,500 OF TAXABLE INTEREST AND

10 DIVIDENDS.—If the aggregate amount of interest and

11 dividends includible in the gross income of the taxpayer

12 for the taxable year exceeds $2,500, the amount of the

13 credit which would (but for this subsection) be allowed

14 under this section for such taxable year shall be reduced

15 (but not below zero) by an amount which bears the same

16 ratio to such amount of credit as such excess bears to

17 $650.’’

18 (b) INFLATION ADJUSTMENT.—Subsection (j) of sec19 tion 32 of such Code (relating to inflation adjustments),

20 as redesignated by subsection (a), is amended by striking

21 paragraph (2) and by inserting the following new para22 graphs:

23 ‘‘(2) INTEREST AND DIVIDEND INCOME LIMITA24 TION.—In the case of a taxable year beginning in a

25 calendar year after 1996, each dollar amount con-
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1 tained in subsection (i) shall be increased by an

2 amount equal to—

3 ‘‘(A) such dollar amount, multiplied by

4 ‘‘(B) the cost-of-living adjustment deter5 mined under section 1(f)(3) for the calendar

6 year in which the taxable year begins, deter7 mined by substituting ‘calendar year 1995’ for

8 ‘calendar year 1992’ in subparagraph (B)

9 thereof.

10 ‘‘(3) ROUNDING.—If any amount as adjusted

11 under paragraph (1) or (2) is not a multiple of $10,

12 such dollar amount shall be rounded to the nearest

13 multiple of $10.’’

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

15 this section shall apply to taxable years beginning after

16 December 31, 1995.

Passed the House of Representatives February 21,

1995.

Attest:

Clerk.

104TH CONGRESS

1ST SESSION H. R. 831

AN ACT

To amend the Internal Revenue Code of 1986 to

for other purposes.of the Federal Communications Commission, andgain on sales and exchanges effectuating policiesrepeal the provision permitting nonrecognition ofinsurance costs of self-employed individuals, topermanently extend the deduction for the health