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‘‘CHAPTER 1—SIMPLIFIED USA TAX FOR
INDIVIDUALS
‘‘Subchapter A. Basic rules.
‘‘Subchapter B. Roth IRA and other savings provisions.
‘‘Subchapter C. Basis, business transactions, and nonrecognition transactions.
‘‘Subchapter D. Rules for exclusions from gross income.
‘‘Subchapter E. Rules relating to deductions.
‘‘Subchapter F. Special business activities.
‘‘Subchapter G. Accounting methods.
‘‘Subchapter H. Nonresident aliens.
‘‘Subchapter I. Trusts and estates.
‘‘Subchapter J. Definitions and rules of application.
‘‘Subchapter A—Basic Rules
‘‘Sec.
1.
Simplified USA tax for individuals.
‘‘Sec.
2.
Persons liable for the Simplified USA for individuals.
‘‘Sec.
3.
Gross income.
‘‘Sec.
4.
Exclusions from gross income.
‘‘Sec.
5.
Alimony and child support deductions.
‘‘Sec.
6.
Personal and dependency deduction.
‘‘Sec.
7.
Family Living Allowance.
‘‘Sec.
8.
USA deductions.
‘‘Sec.
9.
Homeowner deduction.
‘‘Sec.
10.
Education deduction.
‘‘Sec.
11.
Philanthropic transfer deduction.
‘‘Sec.
13.
Limitation on deductions.
‘‘Sec.
15.
Tax rates.
‘‘Sec.
16.
Kiddie tax.
‘‘Sec.
17.
Rules for filing status and rate tables.
‘‘Sec.
20.
USA tax credits.
‘‘Sec.
21.
Payroll tax credit.
‘‘Sec.
22.
Taxes-paid tax credit.
‘‘Sec.
23.
Indexing for inflation.
‘‘SEC.
1.
SIMPLIFIED USA TAX FOR INDIVIDUALS.
‘‘(a) IMPOSITION OF TAX.—An income tax is imposed
on each individual described in section 2. The income tax
shall equal the amount determined by applying the tax
schedules in section 15 to the taxable income of the tax-
payer for the taxable year and reducing the tax so deter-
mined by the USA tax credits for the taxable year.
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as a Roth IRA for purposes of this chapter (includ-
ing rules allowing for tax-free rollover).
‘‘(2) NO NEW CONTRIBUTIONS.—Neither para-
graph (1) nor section 530 of the Internal Revenue
Code of 1986 shall apply to an education IRA to
which contributions are made after December 31,
1998.
‘‘(3) SPECIAL RULE.—For purposes of applying
section 30 to an account that was an educational
IRA, the designated beneficiary of such account
shall be treated as described in a subclause of clause
(vi) of section 30(d)(5).
‘‘(b) MEDICAL SAVINGS ACCOUNTS.—
‘‘(1) EQUIVALENT
OF
DEDUCTIBLE
IRA.—A
medical savings account shall be treated as an indi-
vidual retirement plan other than a Roth IRA for
purposes of this chapter and chapter 3.
‘‘(2) SPECIAL ROLLOVER RULES.—
‘‘(A) NO INCOME LIMIT.—The income lim-
its of section 30(c)(3)(B) shall not apply to the
rollover of a medical savings account into a
Roth IRA.
‘‘(B) MEDICAL DISTRIBUTIONS.—For pur-
poses of applying section 30 to the amount of
any medical savings account rolled over to a
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during the taxable year of the entity ending on
December 31, 1998.
‘‘(5) PARTNERSHIP.—For purposes of this sec-
tion, ‘partnership’ includes a limited liability com-
pany that was taxable as a partnership under the
Internal Revenue Code of 1986.
‘‘(c) SPECIAL RULES FOR SHARES OF S CORPORA-
TIONS.—Rules similar to those contained in subsection (b)
shall apply with respect to the basis of stock of a corpora-
tion that was treated as an S corporation under the Inter-
nal Revenue Code of 1986.
‘‘(d) SPECIAL RULES FOR PROPRIETORSHIPS.—
‘‘(1) OLD
PROPRIETORSHIP.—A proprietor’s
basis in any business activity conducted before Janu-
ary 1, 1999, which is treated as a business activity
as of such date equals—
‘‘(A) the proprietor’s adjusted basis in the
assets of such business entity as of the end of
the taxable year ending on December 31, 1998,
minus
‘‘(B) the balance of any indebtedness the
interest on which the proprietor had treated as
business interest under section 163(h)(2)(A) of
the Internal Revenue Code of 1986.