Teacher:In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.
Teacher: Now, understand the problem? Solve this instance: SECTION 1. SHORT TITLE.

This Act may be cited as the ''Investment Incentives Act of 2002''.

SEC. 2. INCREASE IN LIMITATION ON CAPITAL LOSSES OF INDIVIDUALS
ALLOWABLE AGAINST ORDINARY INCOME.

(a) In General.--Paragraph (1) of section 1211(b) of the Internal
Revenue Code of 1986 (relating to limitation on capital losses of
taxpayers other than corporations) is amended--
(1) by striking ''$3,000'' and inserting ''$20,000'', and
(2) by striking ''$1,500'' and inserting ''$10,000''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2001.

SEC. 3. ACCELERATION OF INCREASE IN CONTRIBUTIONS TO CERTAIN RETIREMENT
PLANS.

(a) IRAs.--
(1) In general.--Subparagraph (A) of section 219(b)(5) of
the Internal Revenue Code of 1986 (defining deductible amount)
is amended to read as follows:
''(A) The deductible amount shall be $5,000.''.
(2) Inflation adjustment.--Section 219(b)(5)(C) of such
Code is amended--
(A) by striking ''2008'' and inserting ''2002'',
and
(B) by striking ''2007'' and inserting ''2001''.
(b) 401(k) Plans.--
(1) In general.--Paragraph (1) of section 402(g) of such
Code is amended--
(A) by striking subparagraph (B),
(B) by striking ''(A) Limitation.--'' and moving
the text 2 ems to the left, and
(C) in such text by striking ''the applicable
dollar amount'' and inserting ''$15,000''.
(2) Inflation adjustment.--Section 402(g)(4) of such Code
is amended--
(A) by striking ''2006'' and inserting ''2002'',
and
(B) by striking ''2005'' and inserting ''2001''.
(3) Conforming amendment.--Section 401(a)(30) of such Code
is amended by striking ''section 402(g)(1)(A)'' and inserting
''section 402(g)(1)''.
(c) 457 Plans.--
(1) In general.--Subparagraph (A) of section 457(b)(2) of
such Code is amended by striking ''the applicable dollar
amount'' and inserting ''$15,000''.
(2) Inflation adjustment.--Section 457(e)(15) of such Code
is amended to read as follows:
''(15) Cost-of-living adjustment.--In the case of taxable
years beginning after December 31, 2002, the Secretary shall
adjust the $15,000 amount under subsection (b)(2)(A) at the
same time and in the same manner as under section 415(d),
except that the base period shall be the calendar quarter
beginning July 1, 2001, and any increase under this paragraph
which is not a multiple of $500 shall be rounded to the next
lowest multiple of $500.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2002.

SEC. 4. EXEMPTION OF CERTAIN INTEREST AND DIVIDEND INCOME FROM TAX.

(a) In General.--Part III of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 (relating to amounts specifically
excluded from gross income) is amended by inserting after section 115
the following new section:

''SEC. 116. PARTIAL EXCLUSION OF DIVIDENDS AND INTEREST RECEIVED BY
INDIVIDUALS.

''(a) Exclusion From Gross Income.--Gross income does not include
dividends and interest otherwise includible in gross income which are
received during the taxable year by an individual.
''(b) Limitations.--
''(1) Maximum amount.--The aggregate amount excluded under
subsection (a) for any taxable year shall not exceed $500
($1,000 in the case of a joint return).
''(2) Certain dividends excluded.--Subsection (a) shall not
apply to any dividend from a corporation which for the taxable
year of the corporation in which the distribution is made is a
corporation exempt from tax under section 521 (relating to
farmers' cooperative associations).
''(c) Special Rules.--For purposes of this section--
''(1) Exclusion not to apply to capital gain dividends from
regulated investment companies and real estate investment
trusts.--

''For treatment of capital gain
dividends, see sections 854(a) and 857(c).
''(2) Certain nonresident aliens ineligible for
exclusion.--In the case of a nonresident alien individual,
subsection (a) shall apply only in determining the taxes
imposed for the taxable year pursuant to sections 871(b)(1) and
877(b).
''(3) Dividends from employee stock ownership plans.--
Subsection (a) shall not apply to any dividend described in
section 404(k).''.
(b) Conforming Amendments.--
(1) Subparagraph (C) of section 32(c)(5) of such Code is
amended by striking ''or'' at the end of clause (i), by
striking the period at the end of clause (ii) and inserting '';
or'', and by inserting after clause (ii) the following new
clause:
''(iii) interest and dividends received
during the taxable year which are excluded from
gross income under section 116.''.
(2) Subparagraph (A) of section 32(i)(2) of such Code is
amended by inserting ''(determined without regard to section
116)'' before the comma.
(3) Subparagraph (B) of section 86(b)(2) of such Code is
amended to read as follows:
''(B) increased by the sum of--
''(i) the amount of interest received or
accrued by the taxpayer during the taxable year
which is exempt from tax, and
''(ii) the amount of interest and dividends
received during the taxable year which are
excluded from gross income under section
116.''.
(4) Subsection (d) of section 135 of such Code is amended
by redesignating paragraph (4) as paragraph (5) and by
inserting after paragraph (3) the following new paragraph:
''(4) Coordination with section 116.--This section shall be
applied before section 116.''.
(5) Paragraph (2) of section 265(a) of such Code is amended
by inserting before the period '', or to purchase or carry
obligations or shares, or to make deposits, to the extent the
interest thereon is excludable from gross income under section
116''.
(6) Subsection (c) of section 584 of such Code is amended
by adding at the end the following new flush sentence:
''The proportionate share of each participant in the amount of
dividends or interest received by the common trust fund and to which
section 116 applies shall be considered for purposes of such section as
having been received by such participant.''.
(7) Subsection (a) of section 643 of such Code is amended
by redesignating paragraph (7) as paragraph (8) and by
inserting after paragraph (6) the following new paragraph:
''(7) Dividends or interest.--There shall be included the
amount of any dividends or interest excluded from gross income
pursuant to section 116.''.
(8) Section 854(a) of such Code is amended by inserting
''section 116 (relating to partial exclusion of dividends and
interest received by individuals) and'' after ''For purposes
of''.
(9) Section 857(c) of such Code is amended to read as
follows:
''(c) Restrictions Applicable to Dividends Received From Real
Estate Investment Trusts.--
''(1) Treatment for section 116.--For purposes of section
116 (relating to partial exclusion of dividends and interest
received by individuals), a capital gain dividend (as defined
in subsection (b)(3)(C)) received from a real estate investment
trust which meets the requirements of this part shall not be
considered as a dividend.
''(2) Treatment for section 243.--For purposes of section
243 (relating to deductions for dividends received by
corporations), a dividend received from a real estate
investment trust which meets the requirements of this part
shall not be considered as a dividend.''.
(10) The table of sections for part III of subchapter B of
chapter 1 of such Code is amended by inserting after the item
relating to section 115 the following new item:

''Sec. 116. Partial exclusion of
dividends and interest received
by individuals.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2001.
Student:
Investment Incentives Act of 2002 - Amends the Internal Revenue Code to: (1) increase from $1,500 to $10,000 ($3,000 to $20,000 on a joint return) the limitation on capital losses allowed against ordinary income; (2) make the increase to the $5,000 amount allowed as an annual retirement contribution deduction effective immediately, instead of starting in 2008; (3) exclude from gross income $500 ($1,000 on a joint return) of dividends and interest.