I
103D CONGRESS
1ST SESSION
H. R. 567
To amend the Internal Revenue Code of 1986 to increase the dollar limitation
on the 1-time exclusion of gain from sale of a principal residence by
individuals who have attained age 55, to increase the amount of the
unified estate and gift tax credits, and to reduce the tax on capital
gains.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 25, 1993
Mr. ROHRABACHER (for himself, Mr. HERGER, Mr. SOLOMON, Mr. EMERSON,
Mr. PORTER, Mr. RAMSTAD, Mr. DOOLITTLE, Mr. SMITH of Oregon, Mr.
MCCOLLUM, Mr. SCHIFF, Mr. KYL, Mr. BAKER of Louisiana, Mr. MOOR-
HEAD, Mr. RAVENEL, Mr. BURTON, Mr. GALLEGLY, Mr. GOSS, Mr. COX,
Mr. GILLMOR, Mr. DORNAN, Mr. MCHUGH, Mr. BAKER of California,
Mr. SMITH of New Jersey, Mr. SPENCE, Mr. TAYLOR of North Carolina,
Mrs. BENTLEY, Mr. SENSENBRENNER, Mr. LEVY, Mr. LINDER, Mr.
MYERS, Mr. BLUTE, Mr. POMBO, Mr. GINGRICH, Mr. HANCOCK, Mr.
SAM JOHNSON of Texas, Mr. ROYCE, and Mr. UPTON) introduced the fol-
lowing bill; which was referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to increase
the dollar limitation on the 1-time exclusion of gain
from sale of a principal residence by individuals who
have attained age 55, to increase the amount of the
unified estate and gift tax credits, and to reduce the
tax on capital gains.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. INCREASE IN LIMITATION ON 1-TIME EXCLU-
SION OF GAIN FROM SALE OF PRINCIPAL
RESIDENCE.
(a) GENERAL RULE.—Paragraph (1) of section
121(b) of the Internal Revenue Code of 1986 (relating to
dollar limitation) is amended by striking ‘‘$125,000
($62,500’’ and inserting ‘‘$186,000 ($93,000’’.
(b) COST-OF-LIVING ADJUSTMENTS.—Subsection (b)
of section 121 of such Code is amended by adding at the
end thereof the following new paragraph:
‘‘(4) COST-OF-LIVING
ADJUSTMENTS.—In the
case of any taxable year beginning in a calendar
year after 1993, each dollar amount set forth in
paragraph (1) 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, by sub-
stituting ‘calendar year 1992’ for ‘calendar year
1989’ in subparagraph (B) thereof.
Any increase determined under the preceding sen-
tence shall be rounded to the nearest multiple of
$1,000.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to any sale or exchange after De-
cember 31, 1992.
SEC. 2. INCREASE IN UNIFIED ESTATE AND GIFT TAX CRED-
ITS.
(a) ESTATE TAX CREDIT.—
(1) Subsection (a) of section 2010 of the Inter-
nal Revenue Code of 1986 (relating to unified credit
against 
estate 
tax) 
is 
amended 
by 
striking
‘‘$193,500’’ and inserting ‘‘the applicable credit
amount’’.
(2) Section 2010 of such Code is amended by
redesignating subsection (c) as subsection (d) and by
inserting after subsection (b) the following new sub-
section:
‘‘(c) APPLICABLE CREDIT AMOUNT.—For purposes
of this section—
‘‘(1) IN
GENERAL.—The applicable credit
amount is the amount of the tentative tax which
would be determined under the rate schedule set
forth in section 2001(c) if the amount with respect
to which such tentative tax is to be computed were
$770,000.
‘‘(2) COST-OF-LIVING
ADJUSTMENTS.—In the
case of any decedent dying in a calendar year after
1993, the $770,000 amount set forth in paragraph
(1) shall be increased by an amount equal to—
‘‘(A) $770,000, multiplied by
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for such calendar
year by substituting ‘calendar year 1992’ for
‘calendar year 1989’ in subparagraph (B)
thereof.
Any increase determined under the preceding sen-
tence shall be rounded to the nearest multiple of
$1,000.’’
(3) Paragraph (1) of section 6018(a) of such
Code is amended by striking ‘‘$600,000’’ and insert-
ing ‘‘$770,000 (adjusted as provided in section
2010(c)(2))’’.
(b) UNIFIED GIFT TAX CREDIT.—Paragraph (1) of
section 2505(a) of such Code is amended by striking
‘‘$193,500’’ and inserting ‘‘the applicable credit amount
in effect under section 2010(c) for such calendar year’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to the estates of decedents dying,
and gifts made, after December 31, 1992.
SEC. 3. REDUCTION IN CAPITAL GAINS TAX FOR INDIVID-
UALS.
(a) GENERAL RULE.—Part I of subchapter P of
chapter 1 of the Internal Revenue Code of 1986 is amend-
ed by adding at the end thereof the following new section:
‘‘SEC. 1202. DEDUCTION FOR CAPITAL GAINS.
‘‘(a) GENERAL RULE.—If, for any taxable year, a
taxpayer other than a corporation has a net capital gain,
an amount equal to 50 percent of the net capital gain shall
be allowed as a deduction.
‘‘(b) ESTATES AND TRUSTS.—In the case of an es-
tate or trust, the deduction under subsection (a) shall be
computed by excluding the portion (if any) of the gains
for the taxable year from sales or exchanges of capital as-
sets which, under sections 652 and 662 (relating to inclu-
sions of amounts in gross income of beneficiaries of
trusts), is includible by the income beneficiaries as gain
derived from the sale or exchange of capital assets.’’
(b) MINIMUM TAX.—Section 56(b) of such Code is
amended by adding at the end thereof the following new
paragraph:
‘‘(4) CAPITAL
GAINS
DEDUCTION
DISALLOW-
ANCE.—The deduction under section 1202 shall not
be allowed.’’
(c) CONFORMING AMENDMENTS.—