‘‘(II) so much of the gain de-
scribed in subclause (I) which is not
taken into account under section 1202
and which the taxpayer elects to take
into account under this clause.’’
(3) Subparagraph (B) of section 172(d)(2) of
such Code is amended to read as follows:
‘‘(B) the deduction under section 1202 and
the exclusion under section 1203 shall not be
allowed.’’
(4) Section 642(c)(4) of such Code is amended
by striking ‘‘1202’’ and inserting ‘‘1203’’.
(5) Section 643(a)(3) of such Code is amended
by striking ‘‘1202’’ and inserting ‘‘1203’’.
(6) Paragraph (4) of section 691(c) of such
Code is amended inserting ‘‘1203,’’ after ‘‘1202,’’.
(7) The second sentence of section 871(a)(2) of
such Code is amended by inserting ‘‘or 1203’’ after
‘‘section 1202’’.
(8) The last sentence of section 1044(d) of such
Code is amended by striking ‘‘1202’’ and inserting
‘‘1203’’.
(9) Paragraph (1) of section 1402(i) of such
Code is amended by inserting ‘‘, and the deduction
provided by section 1202 and the exclusion provided
by section 1203 shall not apply’’ before the period
at the end.
(10) Section 121 of such Code is amended by
adding at the end the following new subsection:
‘‘(h) CROSS REFERENCE.—
‘‘For treatment of eligible gain not excluded under
subsection (a), see section 1202.’’
(11) Section 1203 of such Code, as redesig-
nated by subsection (a), is amended by adding at the
end the following new subsection:
‘‘(l) CROSS REFERENCE.—
‘‘For treatment of eligible gain not excluded under
subsection (a), see section 1202.’’
(12) The table of sections for part I of sub-
chapter P of chapter 1 of such Code is amended by
striking the item relating to section 1202 and by in-
serting after the item relating to section 1201 the
following new items:
‘‘Sec. 1202. Capital gains deduction.
‘‘Sec. 1203. 50-percent exclusion for gain from certain small
business stock.’’
(f) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section
shall apply to taxable years beginning after Decem-
ber 31, 1999.
(2) COLLECTIBLES.—The amendments made by
subsection (d) shall apply to sales and exchanges
after December 31, 1999.
SEC. 5. INCREASE IN CONTRIBUTION LIMITS FOR TRADI-
TIONAL IRAS.
(a) INCREASE IN CONTRIBUTION LIMIT.—Paragraph
(1)(A) of section 219(b) of the Internal Revenue Code of
1986 (relating to maximum amount of deduction) is
amended by striking ‘‘$2,000’’ and inserting ‘‘$3,000’’.
(b) INFLATION ADJUSTMENT.—Section 219 of the
Internal Revenue Code of 1986 (relating to deduction for
retirement savings) is amended by redesignating sub-
section (h) as subsection (i) and by inserting after sub-
section (g) the following new subsection:
‘‘(h) COST-OF-LIVING ADJUSTMENT.—
‘‘(1) DEDUCTIBLE AMOUNTS.—In the case of
any taxable year beginning in a calendar year after
2009, the $3,000 amount under subsection (b)(1)(A)
shall be increased by an amount equal to—
‘‘(A) such dollar amount, multiplied by
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar
year in which the taxable year begins, deter-
mined by substituting ‘calendar year 2008’ for
‘calendar year 1992’ in subparagraph (B)
thereof.
‘‘(2) ROUNDING RULES.—If any amount after
adjustment under paragraph (1) is not a multiple of
$100, such amount shall be rounded to the next
lower multiple of $100.’’
(c) CONFORMING AMENDMENTS.—
(1) Section 408(a)(1) of the Internal Revenue
Code of 1986 is amended by striking ‘‘in excess of
$2,000 on behalf of any individual’’ and inserting
‘‘on behalf of any individual in excess of the amount
in effect for such taxable year under section
219(b)(1)(A)’’.
(2) Section 408(b)(2)(B) of such Code is
amended by striking ‘‘$2,000’’ and inserting ‘‘the
dollar amount in effect under section 219(b)(1)(A)’’.
(3) Section 408(b) of such Code is amended by
striking ‘‘$2,000’’ in the matter following paragraph
(4) and inserting ‘‘the dollar amount in effect under
section 219(b)(1)(A)’’.
(4) Section 408(j) of such Code is amended by
striking ‘‘$2,000’’.
(5) Section 408(p)(8) of such Code is amended
by striking ‘‘$2,000’’ and inserting ‘‘the dollar
amount in effect under section 219(b)(1)(A)’’.
(6) Section 408A(c)(2)(A) of such Code is
amended to read as follows:
‘‘(A) $2,000, over’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1999.
SEC. 6. SOCIAL SECURITY NOT AFFECTED.
It is the sense of the Congress that the enactment
of this Act shall have no impact on the solvency of the
social security trust funds since the revenue reductions re-
sulting from this Act over both the 5-year and 10-year
estimating periods are projected to be less than the sur-
plus over such periods in the non-social security portion
of the Federal budget.
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