(1) IN GENERAL.—This section and the amend-
ments made by this section take effect on October 
1, 2007. 
(2) STATE OPTION.—A State may implement 
the amendments made by subsections (a) and (b) for 
participating households at the first recertification of 
the households that occurs on or after October 1, 
2007. 
TITLE II—REVENUE PROVISIONS 
SEC. 201. EXPANSION OF EARNED INCOME CREDIT FOR EL-
IGIBLE INDIVIDUALS WITH NO QUALIFYING 
CHILDREN. 
(a) INCREASE IN EARNED INCOME AMOUNT.—The 
table in subparagraph (A) of section 32(b)(2) of the Inter-
nal Revenue Code of 1986 is amended by striking 
‘‘$4,220’’ and inserting ‘‘$5,500’’. 
(b) EXPANSION OF MARRIAGE PENALTY RELIEF.— 
Subparagraph (B) of section 32(b)(2) of such Code is 
amended by striking ‘‘and’’ at the end of clause (ii) and 
by clause (iii) and inserting the following new clauses: 
‘‘(iii) $3,000 in the case of taxable 
years beginning in 2007, and 
‘‘(iv) $4,000 in the case of taxable 
years beginning after 2007.’’. 
(c) ADJUSTMENTS FOR INFLATION.— 
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(1) EARNED INCOME AMOUNT.—Subparagraph 
(B) of section 32(j)(1) of such Code is amended by 
striking ‘‘and’’ at the end of clause (i), by striking 
the period at the end of clause (ii) and inserting ‘‘, 
and’’, and by inserting after clause (ii) the following 
new clause: 
‘‘(iii) in the case of the $10,000 
amount 
in 
the 
table 
in 
subsection 
(b)(2)(A), by substituting ‘calendar year 
2006’ for ‘calendar year 1992’ in subpara-
graph (B) of such section 1.’’. 
(2) MARRIAGE PENALTY AMOUNT.—Clause (ii) 
of section 32(j)(1)(B) of such Code is amended— 
(A) by striking ‘‘$3,000’’ and inserting 
‘‘$4,000’’, and 
(B) by striking ‘‘2007’’ and inserting 
‘‘2008’’. 
(3) 
CONFORMING
AMENDMENT.—Section 
32(j)(1)(B)(i) of such Code is amended by inserting 
‘‘except as provided in clause (iii),’’ before ‘‘in the 
case of’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2006. 
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SEC. 202. BROKER REPORTING OF CUSTOMER’S BASIS IN 
SECURITIES TRANSACTIONS. 
(a) IN GENERAL.—Section 6045 of the Internal Rev-
enue Code of 1986 (relating to returns of brokers) is 
amended by adding at the end the following new sub-
section: 
‘‘(g) ADDITIONAL INFORMATION REQUIRED IN THE 
CASE OF SECURITIES TRANSACTIONS.— 
‘‘(1) IN GENERAL.—If a broker is otherwise re-
quired to make a return under subsection (a) with 
respect to any applicable security, the broker shall 
include in such return the information described in 
paragraph (2). 
‘‘(2) ADDITIONAL INFORMATION REQUIRED.— 
‘‘(A) IN GENERAL.—The information re-
quired under paragraph (1) to be shown on a 
return with respect to an applicable security of 
a customer shall include for each reported ap-
plicable security the customer’s adjusted basis 
in such security. 
‘‘(B) EXEMPTION FROM REQUIREMENT.— 
The Secretary shall issue such regulations or 
guidance as necessary concerning the applica-
tion of the requirement under subparagraph (A) 
in cases in which a broker in making a return 
does not have sufficient information to meet 
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such requirement with respect to the reported 
applicable security. Such regulations or guid-
ance may— 
‘‘(i) require such other information re-
lated to such adjusted basis as the Sec-
retary may prescribe, and 
‘‘(ii) exempt classes of cases in which 
the broker does not have sufficient infor-
mation to meet either the requirement 
under subparagraph (A) or the require-
ment under clause (i). 
‘‘(3) INFORMATION TRANSFERS.—To the extent 
provided in regulations, there shall be such ex-
changes of information between brokers as such reg-
ulations may require for purposes of enabling such 
brokers to meet the requirements of this subsection. 
‘‘(4) DEFINITIONS.—For purposes of this sub-
section, the term ‘applicable security’ means any— 
‘‘(A) security described in subparagraph 
(A) or (C) of section 475(c)(2), 
‘‘(B) interest in a regulated investment 
company (as defined in section 851), or 
‘‘(C) other financial instrument designated 
in regulations prescribed by the Secretary.’’. 
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(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to returns the due date for which 
(determined without regard to extensions) is after Decem-
ber 31, 2009, with respect to securities acquired after De-
cember 31, 2008. 
SEC. 203. MODIFICATION OF EFFECTIVE DATE OF LEASING 
PROVISIONS OF THE AMERICAN JOBS CRE-
ATION ACT OF 2004. 
(a) LEASES TO FOREIGN ENTITIES.—Section 849(b) 
of the American Jobs Creation Act of 2004 is amended 
by adding at the end the following new paragraph: 
‘‘(5) LEASES TO FOREIGN ENTITIES.—In the 
case of tax-exempt use property leased to a tax-ex-
empt entity which is a foreign person or entity, the 
amendments made by this part shall apply to taxable 
years beginning after December 31, 2006, with re-
spect to leases entered into on or before March 12, 
2004.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall take effect as if included in the enact-
ment of the American Jobs Creation Act of 2004. 
SEC. 204. CLARIFICATION OF ECONOMIC SUBSTANCE DOC-
TRINE. 
(a) IN GENERAL.—Section 7701 of the Internal Rev-
enue Code of 1986 is amended by redesignating subsection 
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(o) as subsection (p) and by inserting after subsection (n) 
the following new subsection: 
‘‘(o) CLARIFICATION
OF
ECONOMIC
SUBSTANCE 
DOCTRINE; ETC.— 
‘‘(1) GENERAL RULES.— 
‘‘(A) IN GENERAL.—In any case in which 
a court determines that the economic substance 
doctrine is relevant for purposes of this title to 
a transaction (or series of transactions), such 
transaction (or series of transactions) shall have 
economic substance only if the requirements of 
this paragraph are met. 
‘‘(B) DEFINITION
OF
ECONOMIC
SUB-
STANCE.—For purposes of subparagraph (A)— 
‘‘(i) IN GENERAL.—A transaction has 
economic substance only if— 
‘‘(I) the transaction changes in a 
meaningful way (apart from Federal 
tax effects) the taxpayer’s economic 
position, and 
‘‘(II) the taxpayer has a substan-
tial nontax purpose for entering into 
such transaction and the transaction 
is a reasonable means of accom-
plishing such purpose. 
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