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Union Calendar No. 14

104TH CONGRESS

1ST SESSION H. R. 831

[Report No. 104–32]

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.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 6, 1995

Mr. ARCHER (for himself, Mr. MATSUI, Mr. THOMAS, and Mrs. JOHNSON of

Connecticut) introduced the following bill; which was referred to the Committee on Ways and Means

FEBRUARY 14, 1995

Reported with an amendment, referred to the House Calendar, and ordered

to be printed

[Omit the part struck through and insert the part printed in italic]

A BILL

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

3 SECTION 1. PERMANENT EXTENSION OF DEDUCTION FOR

4 HEALTH INSURANCE COSTS OF SELF-EM5 PLOYED INDIVIDUALS.

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

7 the Internal Revenue Code of 1986 (relating to special

8 rules for health insurance costs of self-employed individ9 uals) is amended by striking paragraph (6).

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

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

12 December 31, 1993.

13 SEC. 2. REPEAL OF NONRECOGNITION ON FCC CERTIFIED

14 SALES AND EXCHANGES.

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

16 Internal Revenue Code of 1986 is amended by striking

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

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

19 such subchapter O is amended by striking the item relat20 ing to part V.

21 (c) EFFECTIVE DATE.—

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

23 this section shall apply to—

24 (A) sales and exchanges on or after Janu25 ary 17, 1995, and
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1 (B) sales and exchanges before such date

2 if the FCC tax certificate with respect to such

3 sale or exchange is issued on or after such date.

4 (2) BINDING CONTRACTS.—

5 (A) IN GENERAL.—The amendments made

6 by this section shall not apply to any sale or ex7 change pursuant to a written contract which

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

9 times thereafter before the sale or exchange, if

10 the FCC tax certificate with respect to such

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

12 or before such date.

13 (B) SALES CONTINGENT ON ISSUANCE OF

14 CERTIFICATE.—A contract shall be treated as

15 not binding for purposes of subparagraph (A) if

16 the sale or exchange pursuant to such contract,

17 or the material terms of such contract, were

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

19 on the issuance of an FCC tax certificate. The

20 preceding sentence shall not apply if the FCC

21 tax certificate for such sale or exchange is is22 sued on or before January 16, 1995.

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

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

25 means any certificate of the Federal Communica-
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1 tions Commission for the effectuation of section

2 1071 of the Internal Revenue Code of 1986 (as in

3 effect on the day before the date of the enactment

4 of this Act).

5 SEC. 3. NONRECOGNITION ON INVOLUNTARY CONVER6 SIONS NOT TO APPLY IF REPLACEMENT

7 PROPERTY ACQUIRED FROM RELATED PER8 SON.

9 (a) IN GENERAL.—Section 1033 of the Internal Rev10 enue Code of 1986 (relating to involuntary conversions)

11 is amended by redesignating subsection (i) as subsection

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

13 subsection:

14 ‘‘(i) NONRECOGNITION NOT TO APPLY IF REPLACE15 MENT PROPERTY ACQUIRED FROM RELATED PERSON.—

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

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

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

19 another person if the relationship between such persons

20 would result in a disallowance of losses under section 267

21 or 707(b).’’

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

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

24 acquired on or after February 6, 1995.
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1 SEC. 4. DENIAL OF EARNED INCOME CREDIT FOR INDIVID2 UALS HAVING MORE THAN $2,500 OF INTER3 EST AND DIVIDEND INCOME.

4 (a) IN GENERAL.—Paragraph (1) of section 32(c) of

5 the Internal Revenue Code of 1986 (defining eligible indi6 vidual) is amended by adding at the end the following new

7 subparagraph:

8 ‘‘(F) DENIAL OF CREDIT FOR INDIVIDUALS

9 HAVING MORE THAN $2,500 OF INTEREST AND

10 DIVIDEND INCOME.—The term ‘eligible individ11 ual’ shall not include any individual if the ag12 gregate interest and dividend income of the tax13 payer for the taxable year exceeds $2,500.’’

14 (b) INFLATION ADJUSTMENT.—Subsection (i) of sec15 tion 32 of such Code (relating to inflation adjustments)

16 is amended by striking paragraph (2) and by inserting the

17 following new paragraphs:

18 ‘‘(2) INTEREST AND DIVIDEND INCOME LIMITA19 TION.—In the case of a taxable year beginning in a

20 calendar year after 1996, the dollar amount con21 tained in subsection (c)(1)(F) shall be increased by

22 an amount equal to—

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

24 ‘‘(B) the cost-of-living adjustment deter25 mined under section 1(f)(3) for the calendar

26 year in which the taxable year begins, deter-
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1 mined by substituting ‘calendar year 1995’ for

2 ‘calendar year 1992’ in subparagraph (B)

3 thereof.

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

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

6 such dollar amount shall be rounded to the nearest

7 multiple of $10.’’

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

9 this section shall apply to taxable years beginning after

10 December 31, 1995.

11 SEC. 4. PHASEOUT OF EARNED INCOME CREDIT FOR INDI12 VIDUALS HAVING MORE THAN $2,500 OF TAX13 ABLE INTEREST AND DIVIDENDS.

14 (a) IN GENERAL.—Section 32 of the Internal Revenue

15 Code of 1986 is amended by redesignating subsections (i)

16 and (j) as subsections (j) and (k), respectively, and by in17 serting after subsection (h) the following new subsection:

18 ‘‘(i) PHASEOUT OF CREDIT FOR INDIVIDUALS HAVING

19 MORE THAN $2,500 OF TAXABLE INTEREST AND DIVI20 DENDS.—If the aggregate amount of interest and dividends

21 includible in the gross income of the taxpayer for the taxable

22 year exceeds $2,500, the amount of the credit which would

23 (but for this subsection) be allowed under this section for

24 such taxable year shall be reduced (but not below zero) by
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1 an amount which bears the same ratio to such amount of

2 credit as such excess bears to $650.’’

3 (b) INFLATION ADJUSTMENT.—Subsection (j) of sec4 tion 32 of such Code (relating to inflation adjustments), as

5 redesignated by subsection (a), is amended by striking

6 paragraph (2) and by inserting the following new para7 graphs:

8 ‘‘(2) INTEREST AND DIVIDEND INCOME LIMITA9 TION.—In the case of a taxable year beginning in a

10 calendar year after 1996, each dollar amount con11 tained in subsection (i) shall be increased by an

12 amount equal to—

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

14 ‘‘(B) the cost-of-living adjustment deter15 mined under section 1(f)(3) for the calendar year

16 in which the taxable year begins, determined by

17 substituting ‘calendar year 1995’ for ‘calendar

18 year 1992’ in subparagraph (B) thereof.

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

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

21 such dollar amount shall be rounded to the nearest

22 multiple of $10.’’

23 (c) EFFECTIVE DATE.—The amendments made by this

24 section shall apply to taxable years beginning after Decem25 ber 31, 1995.
Union Calendar No. 14

104TH CONGRESS

1ST SESSION H. R. 831

[Report No. 104–32]

A BILL

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

FEBRUARY 14, 1995

Reported with an amendment, referred to the House

Calendar, and ordered to be printed