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(c) CLERICAL AMENDMENT.—The table of parts for
such subchapter O is amended by striking the item relating
to part V.
(d) EFFECTIVE DATE.—
(1) IN
GENERAL.—The amendments made by
this section shall apply to—
(A) sales and exchanges on or after January
17, 1995, and
(B) sales and exchanges before such date if
the FCC tax certificate with respect to such sale
or exchange is issued on or after such date.
(2) BINDING CONTRACTS.—
(A) IN GENERAL.—The amendments made
by this section shall not apply to any sale or ex-
change pursuant to a written contract which was
binding on January 16, 1995, and at all times
thereafter before the sale or exchange, if the FCC
tax certificate with respect to such sale or ex-
change was applied for, or issued, on or before
such date.
(B) SALES CONTINGENT ON ISSUANCE OF
CERTIFICATE.—A contract shall be treated as not
binding for purposes of subparagraph (A) if the
sale or exchange pursuant to such contract, or
the material terms of such contract, were contin-
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gent, at any time on January 16, 1995, on the
issuance of an FCC tax certificate. The preceding
sentence shall not apply if the FCC tax certifi-
cate for such sale or exchange is issued on or be-
fore January 16, 1995.
(3) FCC TAX
CERTIFICATE.—For purposes of
this subsection, the term ‘‘FCC tax certificate’’ means
any certificate of the Federal Communications Com-
mission for the effectuation of section 1071 of the In-
ternal Revenue Code of 1986 (as in effect on the day
before the date of the enactment of this Act).
SEC. 3. SPECIAL RULES RELATING TO INVOLUNTARY CON-
VERSIONS.
(a) REPLACEMENT PROPERTY ACQUIRED
BY COR-
PORATIONS FROM RELATED PERSONS.—
(1) IN GENERAL.—Section 1033 of the Internal
Revenue Code of 1986 (relating to involuntary conver-
sions) is amended by redesignating subsection (i) as
subsection (j) and by inserting after subsection (h) the
following new subsection:
‘‘(i) NONRECOGNITION NOT TO APPLY IF CORPORA-
TION ACQUIRES REPLACEMENT PROPERTY FROM RELATED
PERSON.—
‘‘(1) IN GENERAL.—In the case of a C corpora-
tion, subsection (a) shall not apply if the replacement
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property or stock is acquired from a related person.
The preceding sentence shall not apply to the extent
that the related person acquired the replacement prop-
erty or stock from an unrelated person during the pe-
riod described in subsection (a)(2)(B).
‘‘(2) RELATED PERSON.—For purposes of this
subsection, a person is related to another person if the
person bears a relationship to the other person de-
scribed in section 267(b) or 707(b)(1).’’
(2) EFFECTIVE DATE.—The amendment made by
paragraph (1) shall apply to involuntary conversions
occurring on or after February 6, 1995.
(b) APPLICATION OF SECTION 1033 TO CERTAIN SALES
REQUIRED FOR MICROWAVE RELOCATION.—
(1) IN GENERAL.—Section 1033 of the Internal
Revenue Code of 1986 (relating to involuntary conver-
sions), as amended by subsection (a), is amended by
redesignating subsection (j) as subsection (k) and by
inserting after subsection (i) the following new sub-
section:
‘‘(j) SALES OR EXCHANGES TO IMPLEMENT MICRO-
WAVE RELOCATION POLICY.—
‘‘(1) IN GENERAL.—For purposes of this subtitle,
if a taxpayer elects the application of this subsection
to a qualified sale or exchange, such sale or exchange
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shall be treated as an involuntary conversion to which
this section applies.
‘‘(2) QUALIFIED SALE OR EXCHANGE.—For pur-
poses of paragraph (1), the term ‘qualified sale or ex-
change’ means a sale or exchange before January 1,
2000, which is certified by the Federal Communica-
tions Commission as having been made by a taxpayer
in connection with the relocation of the taxpayer from
the 1850–1990MHz spectrum by reason of the Federal
Communications Commission’s reallocation of that
spectrum for use for personal communications serv-
ices. The Commission shall transmit copies of certifi-
cations under this paragraph to the Secretary.’’
(2) EFFECTIVE DATE.—The amendment made by
paragraph (1) shall apply to sales or exchanges after
March 14, 1995.
SEC. 4. DENIAL OF EARNED INCOME CREDIT FOR INDIVID-
UALS HAVING MORE THAN $2,450 OF INVEST-
MENT INCOME.
(a) IN GENERAL.—Section 32 of the Internal Revenue
Code of 1986 is amended by redesignating subsections (i)
and (j) as subsections (j) and (k), respectively, and by in-
serting after subsection (h) the following new subsection:
‘‘(i) DENIAL OF CREDIT FOR INDIVIDUALS HAVING
MORE THAN $2,450 OF INVESTMENT INCOME.—
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‘‘(1) IN GENERAL.—No credit shall be allowed
under subsection (a) for the taxable year if the aggre-
gate amount of disqualified income of the taxpayer
for the taxable year exceeds $2,450.
‘‘(2) DISQUALIFIED
INCOME.—For purposes of
paragraph 
(1), 
the 
term 
‘disqualified 
income’
means—
‘‘(A) interest which is received or accrued
during the taxable year (whether or not exempt
from tax),
‘‘(B) dividends to the extent includible in
gross income for the taxable year, and
‘‘(C) the excess (if any) of—
‘‘(i) gross income from rents or royal-
ties not derived in the ordinary course of a
trade or business, over
‘‘(ii) the sum of—
‘‘(I) expenses (other than interest)
which are clearly and directly allocable
to such gross income, plus
‘‘(II) interest expenses properly
allocable to such gross income.’’
(b) EFFECTIVE DATE.—The amendments made by this
section shall apply to taxable years beginning after Decem-
ber 31, 1995.