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‘‘(ii) by organizations which are ex-
empt from tax.
For purposes of the preceding sentence, all or-
ganizations sharing a name, charter, historic af-
filiation, or similar characteristics and coordi-
nating their lobbying activities shall be treated
a 1 organization.
‘‘(B) INFLATION
ADJUSTMENT.—In the
case of dues for annual periods beginning in
any calendar year after 1998, the dollar amount
contained in subparagraph (A)(i) shall be in-
creased by an amount equal to—
‘‘(i) such dollar amount, multiplied by
‘‘(ii) the cost-of-living adjustment de-
termined under section 1(f)(3) for such
calendar year by substituting ‘calendar
year 1997’ for ‘calendar year 1992’ in sub-
paragraph (B) thereof.
If any increase determined under the preceding
sentence is not a multiple of $5, such increase
shall be rounded to the nearest multiple of $5.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to taxable years beginning after
December 31, 1997.
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SEC. 1054. TERMINATION OF CERTAIN EXCEPTIONS FROM
RULES RELATING TO EXEMPT ORGANIZA-
TIONS WHICH PROVIDE COMMERCIAL-TYPE
INSURANCE.
(a) IN GENERAL.—Subparagraphs (A) and (B) of
section 1012(c)(4) of the Tax Reform Act of 1986 shall
not apply to any taxable year beginning after December
31, 1997.
(b) SPECIAL RULES.—In the case of an organization
to which section 501(m) of the Internal Revenue Code of
1986 applies solely by reason of the amendment made by
subsection (a)—
(1) no adjustment shall be made under section
481 (or any other provision) of such Code on ac-
count of a change in its method of accounting for its
first taxable year beginning after December 31,
1997, and
(2) for purposes of determining gain or loss, the
adjusted basis of any asset held on the 1st day of
such taxable year shall be treated as equal to its fair
market value as of such day.
(c) RESERVE WEAKENING AFTER JUNE 8, 1997.—
Any reserve weakening after June 8, 1997, by an organi-
zation described in subsection (b) shall be treated as oc-
curring in such organizations 1st taxable year beginning
after December 31, 1997.
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(d) REGULATIONS.—The Secretary of the Treasury
or his delegate may prescribe rules for providing proper
adjustments for organizations described in subsection (b)
with respect to short taxable years which begin during
1998 by reason of section 843 of the Internal Revenue
Code of 1986.
Subtitle G—Other Revenue
Provisions
SEC. 1061. TERMINATION OF SUSPENSE ACCOUNTS FOR
FAMILY CORPORATIONS REQUIRED TO USE
ACCRUAL METHOD OF ACCOUNTING.
(a) IN GENERAL.—Subsection (i) of section 447 (re-
lating to method of accounting for corporations engaged
in farming) is amended by adding at the end the following
new paragraph:
‘‘(7) TERMINATION.—
‘‘(A) IN GENERAL.—No suspense account
may be established under this subsection by any
corporation required by this section to change
its method of accounting for any taxable year
ending after June 8, 1997.
‘‘(B) PHASEOUT OF EXISTING SUSPENSE
ACCOUNTS.—
‘‘(i) IN GENERAL.—Each suspense ac-
count under this subsection shall be re-
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duced (but not below zero) for each taxable
year beginning after June 8, 1997, by an
amount equal to the lesser of—
‘‘(I) the applicable portion of
such account, or
‘‘(II) 50 percent of the taxable
income of the corporation for the tax-
able year, or, if the corporation has no
taxable income for such year, the
amount of any net operating loss (as
defined in section 172(c)) for such
taxable year.
For purposes of the preceding sentence,
the amount of taxable income and net op-
erating loss shall be determined without re-
gard to this paragraph.
‘‘(ii) COORDINATION WITH OTHER RE-
DUCTIONS.—The amount of the applicable
portion for any taxable year shall be re-
duced (but not below zero) by the amount
of any reduction required for such taxable
year under any other provision of this sub-
section.
‘‘(iv) INCLUSION IN INCOME.—Any re-
duction in a suspense account under this
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paragraph shall be included in gross in-
come for the taxable year of the reduction.
‘‘(C) APPLICABLE
PORTION.—For pur-
poses of subparagraph (B), the term ‘applicable
portion’ means, for any taxable year, the
amount which would ratably reduce the amount
in the account (after taking into account prior
reductions) to zero over the period consisting of
such taxable year and the remaining taxable
years in such first 20 taxable years.
‘‘(D) AMOUNTS AFTER 20TH YEAR.—Any
amount in the account as of the close of the
20th year referred to in subparagraph (C) shall
be treated as the applicable portion for each
succeeding year thereafter to the extent not re-
duced under this paragraph for any prior tax-
able year after such 20th year.’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years ending after June
8, 1997.
SEC. 1062. MODIFICATION OF TAXABLE YEARS TO WHICH
NET OPERATING LOSSES MAY BE CARRIED.
(a) IN GENERAL.—Subparagraph (A) of section
172(b)(1) (relating to years to which loss may be carried)
is amended—
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(1) by striking ‘‘3’’ in clause (i) and inserting
‘‘2’’, and
(2) by striking ‘‘15’’ in clause (ii) and inserting
‘‘20’’.
(b) RETENTION OF 3-YEAR CARRYBACK FOR CAS-
UALTY LOSSES OF INDIVIDUALS.—Paragraph (1) of sec-
tion 172(b) is amended by adding at the end the following
new subparagraph:
‘‘(F) CASUALTY
LOSSES
OF
INDIVID-
UALS.—Subparagraph (A)(i) shall be applied by
substituting ‘3 years’ for ‘2 years’ with respect
to the portion of the net operating loss of an in-
dividual for the taxable year which is attrib-
utable to losses of property arising from fire,
storm, shipwreck, or other casualty, or from
theft.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to net operating losses for taxable
years beginning after the date of the enactment of this
Act.
SEC. 1063. EXPANSION OF DENIAL OF DEDUCTION FOR
CERTAIN AMOUNTS PAID IN CONNECTION
WITH INSURANCE.
(a) DENIAL OF DEDUCTION FOR PREMIUMS.—Para-
graph (1) of section 264(a) is amended to read as follows: