179
•HR 1200 SC4
‘‘(III) imported property income,’’.
(2) Paragraph (5) of section 954(b) (relating to
deductions to be taken into account) is amended by
striking ‘‘and the foreign base company oil related
income’’ and inserting ‘‘the foreign base company oil
related income, and the imported property income’’.
(e) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section
shall apply to taxable years of foreign corporations
beginning after December 31, 1994, and to taxable
years of United States shareholders within which or
with which such taxable years of such foreign cor-
porations end.
(2) SUBSECTION (c).—The amendments made
by subsection (c) shall apply to taxable years begin-
ning after December 31, 1994.
SEC. 844. REPEAL OF DEDUCTION FOR INTANGIBLE DRILL-
ING AND DEVELOPMENT COSTS.
(a) IN GENERAL.—Subsection (c) of section 263 (re-
lating to capital expenditures) is hereby repealed.
(b) CONFORMING AMENDMENT.—Section 57 (relat-
ing to items of tax preference) is amended by striking sub-
sections (a)(2) and (b).
180
•HR 1200 SC4
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to costs paid or incurred after De-
cember 31, 1994, in taxable years ending after such date.
SEC. 845. REPEAL OF PERCENTAGE DEPLETION FOR OIL
AND GAS WELLS.
(a) IN GENERAL.—Section 613A is hereby repealed.
(b) CONFORMING AMENDMENTS.—
(1) Subsection (d) of section 613 (relating to
percentage depletion) is amended by striking ‘‘Ex-
cept as provided in section 613A, in’’ and inserting
‘‘In’’.
(2) Paragraph (1) of section 57(a) is amended
by striking the last sentence.
(3) The table of sections for part I of sub-
chapter I of chapter 1 is amended by striking the
item relating to section 613A.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1994.
SEC. 846. REPEAL OF APPLICATION OF LIKE-KIND EX-
CHANGE RULES TO REAL PROPERTY.
(a) IN GENERAL.—Paragraph (2) of section 1031(a)
(relating to exchange of property held for productive use
or investment) is amended by striking ‘‘or’’ at the end of
subparagraph (E), by striking the period at the end of
181
•HR 1200 SC4
subparagraph (F) and inserting ‘‘, or’’, and by adding at
the end thereof the following new subparagraph:
‘‘(G) real property.’’
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to transfers after December 31,
1994.
SEC. 847. AMORTIZATION OF PORTION OF ADVERTISING
EXPENSES.
(a) IN GENERAL.—Part IX of subchapter B of chap-
ter 1 (relating to items not deductible) is amended by in-
serting after section 263A the following new section:
‘‘SEC. 263B. CAPITALIZATION OF PORTION OF ADVERTISING
EXPENSES.
‘‘(a) 20 PERCENT OF ADVERTISING EXPENSES RE-
QUIRED TO BE CAPITALIZED.—
‘‘(1) DISALLOWANCE.—Expect as provided in
paragraph (2), no deduction shall be allowed for 20
percent of the advertising expenses paid or incurred
by the taxpayer during the taxable year.
‘‘(2) 
AMORTIZATION
OF
DISALLOWED
AMOUNT.—The amount not allowed as a deduction
under paragraph (1) for any taxable year—
‘‘(A) shall be treated as chargeable to cap-
ital account with respect to the trade or busi-
182
•HR 1200 SC4
ness (or activity described in section 212) in
which incurred, and
‘‘(B) shall be allowed as a deduction rat-
ably over the 48-month period beginning with
the 1st month of the following taxable year.
‘‘(b) ADVERTISING EXPENSES.—For purposes of this
section—
‘‘(1) IN GENERAL.—The term ‘advertising ex-
pense’ means any amount—
‘‘(A) which (without regard to this section)
is allowable as a deduction under section 162
or 212 for the taxable year in which paid or
incurred, and
‘‘(B) which is paid or incurred in connec-
tion with an attempt to encourage the purchase
or sale, lease, or use of any product or service
for the benefit of the taxpayer or a related
person by means of any media.
‘‘(2) AMOUNTS DEDUCTIBLE AS DEPRECIATION
OR
AMORTIZATION
TREATED
AS
EXPENSES.—The
amount allowable as a deduction under this chapter
for the taxable year for depreciation or amortization
shall be treated for purposes of this section as an ex-
pense paid or incurred during such year which is de-
scribed in paragraph (1).’’
183
•HR 1200 SC4
(b) CLERICAL AMENDMENT.—The table of sections
for such part IX is amended by inserting after the item
relating to section 263A the following new item:
‘‘Sec. 263B. Capitalization of portion of advertising expenses.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to amounts paid or incurred after
December 31, 1994, in taxable years ending after such
date.
Subtitle F—Estimated Tax
Provisions
SEC. 851. INDIVIDUAL ESTIMATED TAX PROVISIONS.
(a) GENERAL RULE.—Paragraph (1) of section
6654(d) (relating to amount of required installment) is
amended—
(1) by striking ‘‘100 percent’’ in subparagraph
(B)(ii) and inserting ‘‘120 percent’’, and
(2) by striking subparagraphs (C), (D), (E),
and (F).
(b) CONFORMING AMENDMENTS.—
(1) Subparagraph (C) of section 6654(i)(1) is
amended by striking ‘‘and without regard to sub-
paragraph (C) of subsection (d)(1)’’.
(2) Subparagraph (A) of section 6654(j)(3) is
amended by striking ‘‘and subsection (d)(1)(C)(iii)
shall not apply’’.
184
•HR 1200 SC4
(3) Paragraph (4) of section 6654(l) is amend-
ed by striking ‘‘paragraphs (1)(C)(iv) and (2)(B)(i)
of 
subsection 
(d)’’ 
and 
inserting 
‘‘subsection
(d)(2)(B)(i)’’.
(c) EFFECTIVE DATE.—The amendments made by
this subsection shall apply to taxable years beginning after
December 31, 1994.
SEC. 852. CORPORATE ESTIMATED TAX PROVISIONS.
(a) INCREASE IN ESTIMATED TAX.—
(1) IN
GENERAL.—Subsection (d) of section
6655 (relating to amount of required installments) is
amended—
(A) by striking ‘‘91 percent’’ each place it
appears in paragraph (1)(B)(i) and inserting
‘‘100 percent’’,
(B) by striking ‘‘91 PERCENT’’ in the head-
ing of paragraph (2) and inserting ‘‘100 PER-
CENT’’, and
(C) by striking paragraph (3).
(2) CONFORMING AMENDMENTS.—
(A) Clause (ii) of section 6655(e)(2)(B) is
amended by striking the table contained therein
and inserting the following new table:
The
‘‘In the case of the following
applicable
required installments:
percentage is:
1st ..............................................................
2nd .............................................................
185
•HR 1200 SC4
3rd .............................................................
4th ..............................................................
100.’’
(B) Clause (i) of section 6655(e)(3)(A) is
amended by striking ‘‘91 percent’’ and inserting
‘‘100 percent’’.
(b) MODIFICATION
OF
PERIODS
FOR
APPLYING
ANNUALIZATION.—
(1) Clause (i) of section 6655(e)(2)(A) is
amended—
(A) by striking ‘‘or for the first 5 months’’
in subclause (II),
(B) by striking ‘‘or for the first 8 months’’
in subclause (III), and
(C) by striking ‘‘or for the first 11
months’’ in subclause (IV).
(2) Paragraph (2) of section 6655(e) is amend-
ed by adding at the end thereof the following new
subparagraph:
‘‘(C) 
ELECTION
FOR
DIFFERENT
ANNUALIZATION PERIODS.—
‘‘(i) If the taxpayer makes an election
under this clause—
‘‘(I) subclause (II) of subpara-
graph (A)(i) shall be applied by sub-
stituting ‘4 months’ for ‘3 months’,