138
(3) in subsection (d), by redesignating para-
graph (5) as paragraph (6) and by inserting after
paragraph (4) the following new paragraph:
‘‘(5) SEQUESTRATION TO REDUCE THE PUBLIC
DEBT REPORTS.—The preview reports shall set forth
for the budget year estimates for each of the follow-
ing:
‘‘(A) The aggregate amount designated
under section 6097 of the Internal Revenue
Code of 1986 for the last taxable year ending
before the budget year.
‘‘(B) The amount of reductions required
under section 253A and the deficit remaining
after those reductions have been made.
‘‘(C) The sequestration percentage nec-
essary to achieve the required reduction in ac-
counts under section 253A(b).’’; and
(4) in subsection (g), by redesignating para-
graphs (4) and (5) as paragraphs (5) and (6), re-
spectively, and by inserting after paragraph (3) the
following new paragraph:
‘‘(4) SEQUESTRATION TO REDUCE THE PUBLIC
DEBT REPORTS.—The final reports shall contain all
of the information contained in the public debt tax-
ation designation report required on October 1.’’.
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(c) EFFECTIVE
DATE.—Notwithstanding section
275(b) of the Balanced Budget and Emergency Deficit
Control Act of 1985, the expiration date set forth in that
section shall not apply to the amendments made by this
section. The amendments made by this section shall cease
to have any effect after the first fiscal year during which
there is no public debt.
TITLE XII—SMALL BUSINESS
INCENTIVES
SEC. 12001. INCREASE IN UNIFIED ESTATE AND GIFT TAX
CREDITS.
(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
‘‘$192,800’’ 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
140
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
the applicable exclusion amount determined in ac-
cordance with the following table:
‘‘In the case of estates of decedents
The applicable
dying, and gifts made, during:
exclusion amount is:
1996 ..........................................................................
$700,000
1997 ..........................................................................
$725,000
1998 or thereafter .....................................................
$750,000.
‘‘(2) COST-OF-LIVING
ADJUSTMENTS.—In the
case of any decedent dying, and gift made, in a cal-
endar year after 1998, the $750,000 amount set
forth in paragraph (1) shall be increased by an
amount equal to—
‘‘(A) $750,000, multiplied by
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for such calendar
year by substituting ‘calendar year 1997’ for
‘calendar year 1992’ 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 ‘‘the applicable exclusion amount in effect under
section 2010(c) (as adjusted under paragraph (2)
141
thereof) for the calendar year which includes the
date of death’’.
(4) Paragraph (2) of section 2001(c) of such
Code is amended by striking ‘‘$21,040,000’’ and in-
serting ‘‘the amount at which the effective tax rate
under this section is 55 percent’’.
(5) Subparagraph (A) of section 2102(c)(3) of
such Code is amended by striking ‘‘$192,800’’ and
inserting ‘‘the applicable credit amount in effect
under section 2010(c) for the calendar year which
includes the date of death’’.
(b) UNIFIED GIFT TAX CREDIT.—Paragraph (1) of
section 2505(a) of such Code is amended by striking
‘‘$192,800’’ 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, 1995.
SEC. 12002. INCREASE IN EXPENSE TREATMENT FOR SMALL
BUSINESSES.
(a) GENERAL RULE.—Paragraph (1) of section
179(b) of the Internal Revenue Code of 1986 (relating to
dollar limitation) is amended by striking ‘‘$17,500’’ and
inserting ‘‘$25,000’’.
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(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to taxable years beginning after
December 31, 1995.
SEC. 12003. CLARIFICATION OF DEFINITION OF PRINCIPAL
PLACE OF BUSINESS.
(a) IN GENERAL.—Subsection (f) of section 280A of
the Internal Revenue Code of 1986 is amended by redesig-
nating paragraphs (2), (3), and (4) as paragraphs (3), (4),
and (5), respectively, and by inserting after paragraph (1)
the following new paragraph:
‘‘(2) PRINCIPAL
PLACE
OF
BUSINESS.—For
purposes of subsection (c), a home office shall in any
case qualify as the principal place of business if—
‘‘(A) the office is the location where the
taxpayer’s essential administrative or manage-
ment activities are conducted on a regular and
systematic (and not incidental) basis by the tax-
payer, and
‘‘(B) the office is necessary because the
taxpayer has no other location for the perform-
ance of the administrative or management ac-
tivities of the business.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to taxable years beginning after
December 31, 1995.
143
SEC. 12004. TREATMENT OF STORAGE OF PRODUCT SAM-
PLES.
(a) IN GENERAL.—Paragraph (2) of section 280A(c)
of the Internal Revenue Code of 1986 is amended by strik-
ing ‘‘inventory’’ and inserting ‘‘inventory or product sam-
ples’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to taxable years beginning after
December 31, 1995.
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