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ered to be made to a section or other provision of the In-
ternal Revenue Code of 1986. 
(c) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title, etc. 
TITLE I—AMT RELIEF 
Sec. 101. Extension of alternative minimum tax relief for nonrefundable per-
sonal credits. 
Sec. 102. Extension of increased alternative minimum tax exemption amount. 
Sec. 103. Increase of AMT refundable credit amount for individuals with long- 
term unused credits for prior year minimum tax liability, etc. 
TITLE II—ADDITIONAL INDIVIDUAL TAX RELIEF 
Sec. 201. Refundable child credit. 
Sec. 202. Additional standard deduction for real property taxes for non-
itemizers. 
TITLE III—ONE-YEAR EXTENDERS 
Subtitle A—Extenders Primarily Affecting Individuals 
Sec. 301. Deduction for State and local sales taxes. 
Sec. 302. Deduction of qualified tuition and related expenses. 
Sec. 303. Treatment of certain dividends of regulated investment companies. 
Sec. 304. Parity in the application of certain limits to mental health benefits. 
Sec. 305. Qualified conservation contributions. 
Sec. 306. Tax-free distributions from individual retirement plans for charitable 
purposes. 
Sec. 307. Deduction for certain expenses of elementary and secondary school 
teachers. 
Sec. 308. Election to include combat pay as earned income for purposes of 
earned income tax credit. 
Sec. 309. Modification of mortgage revenue bonds for veterans. 
Sec. 310. Distributions from retirement plans to individuals called to active 
duty. 
Sec. 311. Stock in RIC for purposes of determining estates of nonresidents not 
citizens. 
Sec. 312. Qualified investment entities. 
Sec. 313. State legislators’ travel expenses away from home. 
Subtitle B—Extenders Primarily Affecting Businesses 
Sec. 321. Research credit. 
Sec. 322. Indian employment credit. 
Sec. 323. New markets tax credit. 
Sec. 324. Railroad track maintenance. 
Sec. 325. Fifteen-year straight-line cost recovery for qualified leasehold im-
provements and qualified restaurant property. 
Sec. 326. Seven-year cost recovery period for motorsports racing track facility. 
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Sec. 327. Accelerated depreciation for business property on Indian reservation. 
Sec. 328. Expensing of environmental remediation costs. 
Sec. 329. Deduction allowable with respect to income attributable to domestic 
production activities in Puerto Rico. 
Sec. 330. Modification of tax treatment of certain payments to controlling ex-
empt organizations. 
Sec. 331. Extension and modification of credit to holders of qualified zone 
academy bonds. 
Sec. 332. Tax incentives for investment in the District of Columbia. 
Sec. 333. Extension of economic development credit for American Samoa. 
Sec. 334. Enhanced charitable deduction for contributions of food inventory. 
Sec. 335. Enhanced charitable deduction for contributions of book inventory to 
public schools. 
Sec. 336. Enhanced deduction for qualified computer contributions. 
Sec. 337. Basis adjustment to stock of S corporations making charitable con-
tributions of property. 
Sec. 338. Extension of work opportunity tax credit for Hurricane Katrina em-
ployees. 
Subtitle C—Other Extenders 
Sec. 341. Disclosure for combined employment tax reporting. 
Sec. 342. Disclosure of return information to apprise appropriate officials of 
terrorist activities. 
Sec. 343. Disclosure upon request of information relating to terrorist activities. 
Sec. 344. Disclosure of return information to carry out income contingent re-
payment of student loans. 
Sec. 345. Authority for undercover operations. 
Sec. 346. Increase in limit on cover over of rum excise tax to Puerto Rico and 
the Virgin Islands. 
Sec. 347. Disclosure of return information for certain veterans programs. 
TITLE IV—MORTGAGE FORGIVENESS DEBT RELIEF 
Sec. 401. Discharges of indebtedness on principal residence excluded from gross 
income. 
Sec. 402. Long-term extension of deduction for mortgage insurance premiums. 
Sec. 403. Alternative tests for qualifying as cooperative housing corporation. 
Sec. 404. Gain from sale of principal residence allocated to nonqualified use not 
excluded from income. 
TITLE V—ADMINISTRATIVE PROVISIONS 
Sec. 501. Repeal of authority to enter into private debt collection contracts. 
Sec. 502. Delay of application of withholding requirement on certain govern-
mental payments for goods and services. 
Sec. 503. Clarification of entitlement of Virgin Islands residents to protections 
of limitations on assessment and collection of tax. 
Sec. 504. Revision of tax rules on expatriation. 
Sec. 505. Repeal of suspension of certain penalties and interest. 
Sec. 506. Unused merchandise drawback. 
TITLE VI—REVENUE PROVISIONS 
Subtitle A—Nonqualified Deferred Compensation From Certain Tax 
Indifferent Parties 
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Sec. 601. Nonqualified deferred compensation from certain tax indifferent par-
ties. 
Subtitle B—Provisions Related to Certain Investment Partnerships 
Sec. 611. Income of partners for performing investment management services 
treated as ordinary income received for performance of serv-
ices. 
Sec. 612. Indebtedness incurred by a partnership in acquiring securities and 
commodities not treated as acquisition indebtedness for organi-
zations which are partners with limited liability. 
Sec. 613. Application to partnership interests and tax sharing agreements of 
rule treating certain gain on sales between related persons as 
ordinary income. 
Subtitle C—Other Provisions 
Sec. 621. Delay in application of worldwide allocation of interest. 
Sec. 622. Broker reporting of customer’s basis in securities transactions. 
Sec. 623. Modification of penalty for failure to file partnership returns. 
Sec. 624. Penalty for failure to file S corporation returns. 
Sec. 625. Time for payment of corporate estimated taxes. 
TITLE I—AMT RELIEF 
SEC. 101. EXTENSION OF ALTERNATIVE MINIMUM TAX RE-
LIEF 
FOR 
NONREFUNDABLE 
PERSONAL 
CREDITS. 
(a) IN GENERAL.—Paragraph (2) of section 26(a) 
(relating to special rule for taxable years 2000 through 
2006) is amended— 
(1) by striking ‘‘or 2006’’ and inserting ‘‘2006, 
or 2007’’, and 
(2) by striking ‘‘2006’’ in the heading thereof 
and inserting ‘‘2007’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2006. 
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SEC. 102. EXTENSION OF INCREASED ALTERNATIVE MIN-
IMUM TAX EXEMPTION AMOUNT. 
(a) IN GENERAL.—Paragraph (1) of section 55(d) 
(relating to exemption amount) is amended— 
(1) by striking ‘‘($62,550 in the case of taxable 
years beginning in 2006)’’ in subparagraph (A) and 
inserting ‘‘($66,250 in the case of taxable years be-
ginning in 2007)’’, and 
(2) by striking ‘‘($42,500 in the case of taxable 
years beginning in 2006)’’ in subparagraph (B) and 
inserting ‘‘($44,350 in the case of taxable years be-
ginning in 2007)’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2006. 
SEC. 
103. 
INCREASE 
OF 
AMT 
REFUNDABLE 
CREDIT 
AMOUNT 
FOR 
INDIVIDUALS 
WITH 
LONG- 
TERM UNUSED CREDITS FOR PRIOR YEAR 
MINIMUM TAX LIABILITY, ETC. 
(a) IN GENERAL.—Paragraph (2) of section 53(e) of 
the Internal Revenue Code of 1986 is amended to read 
as follows: 
‘‘(2) AMT REFUNDABLE
CREDIT
AMOUNT.— 
For purposes of paragraph (1), the term ‘AMT re-
fundable credit amount’ means, with respect to any 
taxable year, the amount (not in excess of the long- 
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term unused minimum tax credit for such taxable 
year) equal to the greater of— 
‘‘(A) 50 percent of the long-term unused 
minimum tax credit for such taxable year, or 
‘‘(B) the amount (if any) of the AMT re-
fundable credit amount determined under this 
paragraph for the taxpayer’s preceding taxable 
year.’’. 
(b) TREATMENT OF CERTAIN UNDERPAYMENTS, IN-
TEREST, AND PENALTIES ATTRIBUTABLE TO THE TREAT-
MENT OF INCENTIVE STOCK OPTIONS.—Section 53 of 
such Code is amended by adding at the end the following 
new subsection: 
‘‘(f) TREATMENT OF CERTAIN UNDERPAYMENTS, IN-
TEREST, AND PENALTIES ATTRIBUTABLE TO THE TREAT-
MENT OF INCENTIVE STOCK OPTIONS.— 
‘‘(1) ABATEMENT.—Any underpayment of tax 
outstanding on the date of the enactment of this 
subsection which is attributable to the application of 
section 56(b)(3) for any taxable year ending before 
January 1, 2007 (and any interest or penalty with 
respect to such underpayment which is outstanding 
on such date of enactment), is hereby abated. No 
credit shall be allowed under this section with re-
spect to any amount abated under this paragraph. 
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‘‘(2) INCREASE IN CREDIT FOR CERTAIN INTER-
EST AND PENALTIES ALREADY PAID.—Any interest 
or penalty paid before the date of the enactment of 
this subsection which would (but for such payment) 
have been abated under paragraph (1) shall be treat-
ed for purposes of this section as an amount of ad-
justed net minimum tax imposed for the taxable 
year of the underpayment to which such interest or 
penalty relates.’’. 
(c) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendment made by this section shall 
apply to taxable years beginning after December 31, 
2006. 
(2) ABATEMENT.—Section 53(f)(1) of the In-
ternal Revenue Code of 1986, as added by sub-
section (b), shall take effect on the date of the en-
actment of this Act. 
TITLE II—ADDITIONAL 
INDIVIDUAL TAX RELIEF 
SEC. 201. REFUNDABLE CHILD CREDIT. 
(a) MODIFICATION
OF
THRESHOLD
AMOUNT.— 
Clause (i) of section 24(d)(1)(B) is amended by inserting 
‘‘($8,500 in the case of taxable years beginning in 2008)’’ 
after ‘‘$10,000’’. 
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(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to taxable years beginning after 
December 31, 2007. 
SEC. 202. ADDITIONAL STANDARD DEDUCTION FOR REAL 
PROPERTY TAXES FOR NONITEMIZERS. 
(a) IN GENERAL.—Section 63(c)(1) (defining stand-
ard deduction) is amended by striking ‘‘and’’ at the end 
of subparagraph (A), by striking the period at the end 
of subparagraph (B) and inserting ‘‘, and’’, and by adding 
at the end the following new subparagraph: 
‘‘(C) in the case of any taxable year begin-
ning in 2008, the real property tax deduction.’’. 
(b) DEFINITION.—Section 63(c) is amended by add-
ing at the end the following new paragraph: 
‘‘(8) REAL PROPERTY TAX DEDUCTION.—For 
purposes of paragraph (1), the real property tax de-
duction is so much of the amount of State and local 
real property taxes (within the meaning of section 
164) paid or accrued by the taxpayer during the tax-
able year which do not exceed $350 ($700 in the 
case of a joint return).’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
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TITLE III—ONE-YEAR 
EXTENDERS 
Subtitle A—Extenders Primarily 
Affecting Individuals 
SEC. 301. DEDUCTION FOR STATE AND LOCAL SALES 
TAXES. 
(a) IN
GENERAL.—Subparagraph (I) of section 
164(b)(5) is amended by striking ‘‘January 1, 2008’’ and 
inserting ‘‘January 1, 2009’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
SEC. 302. DEDUCTION OF QUALIFIED TUITION AND RE-
LATED EXPENSES. 
(a) IN GENERAL.—Subsection (e) of section 222 (re-
lating to termination) is amended by striking ‘‘December 
31, 2007’’ and inserting ‘‘December 31, 2008’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
SEC. 303. TREATMENT OF CERTAIN DIVIDENDS OF REGU-
LATED INVESTMENT COMPANIES. 
(a) 
INTEREST-RELATED
DIVIDENDS.—Subpara-
graph (C) of section 871(k)(1) (defining interest-related 
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dividend) is amended by striking ‘‘December 31, 2007’’ 
and inserting ‘‘December 31, 2008’’. 
(b) SHORT-TERM CAPITAL GAIN DIVIDENDS.—Sub-
paragraph (C) of section 871(k)(2) (defining short-term 
capital gain dividend) is amended by striking ‘‘December 
31, 2007’’ and inserting ‘‘December 31, 2008’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to dividends with respect to taxable 
years of regulated investment companies beginning after 
December 31, 2007. 
SEC. 304. PARITY IN THE APPLICATION OF CERTAIN LIMITS 
TO MENTAL HEALTH BENEFITS. 
(a) IN GENERAL.—Paragraph (3) of section 9812(f) 
(relating to application of section) is amended by striking 
‘‘December 31, 2007’’ and inserting ‘‘December 31, 
2008’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to benefits for services furnished 
after December 31, 2007. 
SEC. 305. QUALIFIED CONSERVATION CONTRIBUTIONS. 
(a) 
IN
GENERAL.—Clause 
(vi) 
of 
section 
170(b)(1)(E) (relating to termination) is amended by 
striking ‘‘December 31, 2007’’ and inserting ‘‘December 
31, 2008’’. 
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(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to contributions made in taxable 
years beginning after December 31, 2007. 
SEC. 306. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RE-
TIREMENT PLANS FOR CHARITABLE PUR-
POSES. 
(a) IN GENERAL.—Subparagraph (F) of section 
408(d)(8) (relating to termination) is amended by striking 
‘‘December 31, 2007’’ and inserting ‘‘December 31, 
2008’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to distributions made in taxable 
years beginning after December 31, 2007. 
SEC. 307. DEDUCTION FOR CERTAIN EXPENSES OF ELE-
MENTARY AND SECONDARY SCHOOL TEACH-
ERS. 
(a) IN GENERAL.—Subparagraph (D) of section 
62(a)(2) (relating to certain expenses of elementary and 
secondary school teachers) is amended by striking ‘‘or 
2007’’ and inserting ‘‘2007, or 2008’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to taxable years beginning after 
December 31, 2007. 
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SEC. 308. ELECTION TO INCLUDE COMBAT PAY AS EARNED 
INCOME FOR PURPOSES OF EARNED INCOME 
TAX CREDIT. 
(a) 
IN
GENERAL.—Subclause 
(II) 
of 
section 
32(c)(2)(B)(vi) (defining earned income) is amended by 
striking ‘‘January 1, 2008’’ and inserting ‘‘January 1, 
2009’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years ending after De-
cember 31, 2007. 
SEC. 309. MODIFICATION OF MORTGAGE REVENUE BONDS 
FOR VETERANS. 
(a) QUALIFIED MORTGAGE BONDS USED TO FI-
NANCE RESIDENCES FOR VETERANS WITHOUT REGARD 
TO FIRST-TIME HOMEBUYER REQUIREMENT.—Subpara-
graph (D) of section 143(d)(2) (relating to exceptions) is 
amended by striking ‘‘January 1, 2008’’ and inserting 
‘‘January 1, 2009’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to bonds issued after December 
31, 2007. 
SEC. 310. DISTRIBUTIONS FROM RETIREMENT PLANS TO 
INDIVIDUALS CALLED TO ACTIVE DUTY. 
(a) IN GENERAL.—Clause (iv) of section 72(t)(2)(G) 
is amended by striking ‘‘December 31, 2007’’ and insert-
ing ‘‘January 1, 2009’’. 
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(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to individuals ordered or called to 
active duty on or after December 31, 2007. 
SEC. 311. STOCK IN RIC FOR PURPOSES OF DETERMINING 
ESTATES OF NONRESIDENTS NOT CITIZENS. 
(a) IN GENERAL.—Paragraph (3) of section 2105(d) 
(relating to stock in a RIC) is amended by striking ‘‘De-
cember 31, 2007’’ and inserting ‘‘December 31, 2008’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to decedents dying after December 
31, 2007. 
SEC. 312. QUALIFIED INVESTMENT ENTITIES. 
(a) 
IN
GENERAL.—Clause 
(ii) 
of 
section 
897(h)(4)(A) (relating to termination) is amended by 
striking ‘‘December 31, 2007’’ and inserting ‘‘December 
31, 2008’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall take effect on January 1, 2008. 
SEC. 313. STATE LEGISLATORS’ TRAVEL EXPENSES AWAY 
FROM HOME. 
(a) IN GENERAL.—Paragraph (2) of section 162(h) 
(relating to legislative days) is amended by adding at the 
end the following flush sentence: ‘‘In the case of taxable 
years beginning in 2008, a legislature shall be treated for 
purposes of this paragraph as in session on any day in 
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SEC. 326. SEVEN-YEAR COST RECOVERY PERIOD FOR MO-
TORSPORTS RACING TRACK FACILITY. 
(a) IN GENERAL.—Subparagraph (D) of section 
168(i)(15) (relating to termination) is amended by strik-
ing ‘‘December 31, 2007’’ and inserting ‘‘December 31, 
2008’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to property placed in service after 
December 31, 2007. 
SEC. 327. ACCELERATED DEPRECIATION FOR BUSINESS 
PROPERTY ON INDIAN RESERVATION. 
(a) IN GENERAL.—Paragraph (8) of section 168(j) 
(relating to termination) is amended by striking ‘‘Decem-
ber 31, 2007’’ and inserting ‘‘December 31, 2008’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to property placed in service after 
December 31, 2007. 
SEC. 328. EXPENSING OF ENVIRONMENTAL REMEDIATION 
COSTS. 
(a) IN GENERAL.—Subsection (h) of section 198 (re-
lating to termination) is amended by striking ‘‘December 
31, 2007’’ and inserting ‘‘December 31, 2008’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to expenditures paid or incurred 
after December 31, 2007. 
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