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SECTION 1. SHORT TITLE.

This Act may be cited as the ''Tax Relief Certainty Act of 2011''.

TITLE I--PERMANENT TAX RELIEF

SEC. 101. REPEAL OF EGTRRA SUNSET.

Section 901 of the Economic Growth and Tax Relief Reconciliation
Act of 2001 is repealed.

SEC. 102. REPEAL OF JGTRRA SUNSET.

Section 303 of the Jobs and Growth Tax Relief Reconciliation Act of
2003 is repealed.

SEC. 103. TECHNICAL AND CONFORMING AMENDMENTS.

The Secretary of the Treasury or the Secretary's delegate shall,
not later than 90 days after the date of the enactment of this Act,
submit to the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the Senate a draft of
any technical and conforming changes in the Internal Revenue Code of
1986 which are necessary to reflect throughout such Code the purposes
of the provisions of, and amendments made by, this Act.

TITLE II--PERMANENT INDIVIDUAL AMT RELIEF

SEC. 201. PERMANENT INDIVIDUAL AMT RELIEF.

(a) Modification of Alternative Minimum Tax Exemption Amount.--
(1) In general.--Paragraph (1) of section 55(d) of the
Internal Revenue Code of 1986 (relating to exemption amount) is
amended to read as follows:
''(1) Exemption amount for taxpayers other than
corporations.--In the case of a taxpayer other than a
corporation, the term 'exemption amount' means--
''(A) the dollar amount for taxable years beginning
in the calendar year as specified in the table
contained in paragraph (4)(A) in the case of--
''(i) a joint return, or
''(ii) a surviving spouse,
''(B) the dollar amount for taxable years beginning
in the calendar year as specified in the table
contained in paragraph (4)(B) in the case of an
individual who--
''(i) is not a married individual, and
''(ii) is not a surviving spouse,
''(C) 50 percent of the dollar amount applicable
under paragraph (1)(A) in the case of a married
individual who files a separate return, and
''(D) $22,500 in the case of an estate or trust.
For purposes of this paragraph, the term 'surviving spouse' has
the meaning given to such term by section 2(a), and marital
status shall be determined under section 7703.''.
(2) Specified exemption amounts.--Section 55(d) of such
Code is amended by adding at the end the following new
paragraph:
''(4) Specified exemption amounts.--
''(A) Taxpayers described in paragraph (1)(A).--For
purposes of paragraph (1))(A)--

------------------------------------------------------------------------
The
''For taxable years beginning in-- exemption
amount is:
------------------------------------------------------------------------
2011....................................................... $74,450
2012....................................................... $78,250
2013....................................................... $81,450
2014....................................................... $85,050
2015....................................................... $88,650
2016....................................................... $92,650
2017....................................................... $96,550
2018....................................................... $100,950
2019....................................................... $105,150
2020....................................................... $109,950
2021....................................................... $112,250.
------------------------------------------------------------------------

''(B) Taxpayers described in paragraph (1)(B).--For
purposes of paragraph (1))(B)--

------------------------------------------------------------------------
The
''For taxable years beginning in-- exemption
amount is:
------------------------------------------------------------------------
2011....................................................... $48,450
2012....................................................... $50,350
2013....................................................... $51,950
2014....................................................... $53,750
2015....................................................... $55,550
2016....................................................... $57,550
2017....................................................... $59,500
2018....................................................... $61,700
2019....................................................... $63,800
2020....................................................... $66,200
2021....................................................... $68,200.''.
------------------------------------------------------------------------

(b) Alternative Minimum Tax Relief for Nonrefundable Credits.--
(1) In general.--Subsection (a) of section 26 of the
Internal Revenue Code of 1986 is amended to read as follows:
''(a) Limitation Based on Amount of Tax.--The aggregate amount of
credits allowed by this subpart for the taxable year shall not exceed
the sum of--
''(1) the taxpayer's regular tax liability for the taxable
year reduced by the foreign tax credit allowable under section
27(a), and
''(2) the tax imposed by section 55(a) for the taxable
year.''.
(2) Conforming amendments.--
(A) Child tax credit.--
(i) Section 24(b) of such Code is amended
by striking paragraph (3).
(ii) Section 24(d)(1) of such Code is
amended--
(I) by striking ''section 26(a)(2)
or subsection (b)(3), as the case may
be,'' each place it appears in
subparagraphs (A) and (B) and inserting
''section 26(a)'', and
(II) by striking ''section 26(a)(2)
or subsection (b)(3), as the case may
be'' in the second last sentence and
inserting ''section 26(a)''.
(B) Credit for interest on certain home
mortgages.--Section 25(e)(1)(C) of such Code is amended
to read as follows:
''(C) Applicable tax limit.--For purposes of this
paragraph, the term 'applicable tax limit' means the
limitation imposed by section 26(a) for the taxable
year reduced by the sum of the credits allowable under
this subpart (other than this section and sections 23,
25D, and 1400C).''.
(C) Savers' credit.--Section 25B of such Code is
amended by striking subsection (g).
(D) Residential energy efficient property.--Section
25D(c) of such Code is amended to read as follows:
''(c) Carryforward of Unused Credit.--If the credit allowable under
subsection (a) exceeds the limitation imposed by section 26(a) for such
taxable year reduced by the sum of the credits allowable under this
subpart (other than this section), such excess shall be carried to the
succeeding taxable year and added to the credit allowable under
subsection (a) for such succeeding taxable year.''.
(E) Certain plug-in electric vehicles.--Section
30(c)(2) of such Code is amended to read as follows:
''(2) Personal credit.--For purposes of this title, the
credit allowed under subsection (a) for any taxable year
(determined after application of paragraph (1)) shall be
treated as a credit allowable under subpart A for such taxable
year.''.
(F) Alternative motor vehicle credit.--Section
30B(g)(2) of such Code is amended to read as follows:
''(2) Personal credit.--For purposes of this title, the
credit allowed under subsection (a) for any taxable year
(determined after application of paragraph (1)) shall be
treated as a credit allowable under subpart A for such taxable
year.''.
(G) New qualified plug-in electric vehicle
credit.--Section 30D(c)(2) of such Code is amended to
read as follows:
''(2) Personal credit.--For purposes of this title, the
credit allowed under subsection (a) for any taxable year
(determined after application of paragraph (1)) shall be
treated as a credit allowable under subpart A for such taxable
year.''.
(H) Cross references.--Section 55(c)(3) of such
Code is amended by striking ''26(a), 30C(d)(2),'' and
inserting ''30C(d)(2)''.
(I) Foreign tax credit.--Section 904 of such Code
is amended by striking subsection (i) and by
redesignating subsections (j), (k), and (l) as
subsections (i), (j), and (k), respectively.
(J) First-time home buyer credit for the district
of columbia.--Section 1400C(d) of such Code is amended
to read as follows:
''(d) Carryforward of Unused Credit.--If the credit allowable under
subsection (a) exceeds the limitation imposed by section 26(a) for such
taxable year reduced by the sum of the credits allowable under subpart
A of part IV of subchapter A (other than this section and section 25D),
such excess shall be carried to the succeeding taxable year and added
to the credit allowable under subsection (a) for such taxable year.''.
(3) Adoption credit.--
(A) In general.--Section 10909 of the Patient
Protection and Affordable Care Act, and the amendments
made thereby, are repealed; and the Internal Revenue
Code of 1986 shall be applied as if such section, and
amendments, had never been enacted.
(B) Conforming amendments.--
(i) Section 23(b) of the Internal Revenue
Code of 1986, as in effect on December 31,
2009, is amended by striking paragraph (4).
(ii) Section 23(c) of such Code, as in
effect on December 31, 2009, is amended by
striking paragraphs (1) and (2) and inserting
before paragraph (3) the following:
''(1) In general.--If the credit allowable under subsection
(a) for any taxable year exceeds the limitation imposed by
section 26(a) for such taxable year, reduced by the sum of the
credits allowable under this subpart (other than this section
and sections 25D and 1400C), such excess shall be carried to
the succeeding taxable year and added to the credit allowable
under subsection (a) for such taxable year.''.
(iii) Section 23(c) of such Code, as in
effect on December 31, 2009, is amended by
redesignating paragraph (3) as paragraph (2).
(c) Effective Date.--The amendments and the repeal made by this
section shall apply to taxable years beginning after December 31, 2010.

TITLE III--PERMANENT ESTATE TAX RELIEF

SEC. 301. PERMANENT ESTATE TAX RELIEF.

(a) In General.--Title III of the Tax Relief, Unemployment
Insurance Reauthorization, and Job Creation Act of 2010, and the
amendments made thereby, are repealed; and the Internal Revenue Code of
1986 shall be applied as if such title, and amendments, had never been
enacted.
(b) Effective Date.--The repeal made by this section shall apply to
estates of decedents dying, gifts made, and generation skipping
transfers after December 31, 2009.
Tax Relief Certainty Act of 2011 - Eliminates: (1) the terminating date of the Economic Growth and Tax Relief Reconciliation Act of 2001, thus making the tax relief provisions of such Act permanent; and (2) the terminating date of the Jobs and Growth Tax Relief Reconciliation Act of 2003 applicable to reductions in the tax rate for dividend and capital gain income.

Amends the Internal Revenue Code to: (1) phase-in between 2011 through 2021increases in the exemption amount for the alternative minimum tax (AMT); and (2) make permanent offsets against the AMT for certain nonrefundable tax credits.

Makes permanent the repeal of the estate, gift, and generation-skipping transfer taxes for decedents dying, gifts made, and generation skipping transfers after December 31, 2009.

SECTION 1. SHORT TITLE.

This Act may be cited as the ''Defending Our Great Lakes Act of
2015''.

SEC. 2. AQUATIC INVASIVE SPECIES CONTROL ZONE AT BRANDON ROAD LOCK AND
DAM SITE, JOLIET, ILLINOIS.

(a) Immediate Actions.--
(1) In general.--The Secretary of the Army, acting through
the Chief of Engineers, the Secretary of the Interior, acting
through the Director of the United States Fish and Wildlife
Service and the Director of the United States Geological
Survey, the Administrator of the Environmental Protection
Agency, and any other applicable Federal agency shall take
immediate actions to prevent the upstream transfer of aquatic
nuisance species from the Mississippi River basin to the Great
Lakes basin through the Brandon Road Lock and Dam site.
(2) Focus.--Actions under paragraph (1) shall place a
special focus on Asian carp species and other aquatic nuisance
species of concern to the Great Lakes as referenced in the
Great Lakes Mississippi River Interbasin Study of the Army
Corps of Engineers issued pursuant to section 1538 of Public
Law 112-141 (126 Stat. 586).
(b) Construction.--
(1) Required measures.--The Chief of Engineers shall
implement measures to improve the Brandon Road Lock and Dam
site to prevent the upstream transfer of Asian carp and other
swimming aquatic nuisance species through the lock and dam,
including--
(A) constructing an engineered channel in the
approach to the site from the Mississippi River
direction, as outlined in the report issued pursuant to
section 1538 of Public Law 112-141 (126 Stat. 586); and
(B) adding technologies and measures necessary for
aquatic nuisance species control, while protecting the
area's ecosystem to the greatest extent feasible.
(2) Cost estimate and schedule.--Not later than 180 days
after the date of enactment of this Act, the Chief of Engineers
shall submit to Congress a cost estimate for, and schedule for
completion of, measures to be constructed under this
subsection.
(c) Other Measures.--The Director of the United States Fish and
Wildlife Service, in consultation with the Director of the United
States Geological Survey, the Chief of Engineers, the Commandant of the
United States Coast Guard, the Administrator of the Environmental
Protection Agency, and the heads of other relevant agencies, shall
implement all appropriate measures in compliance with applicable State
and Federal law around the Brandon Road Lock and Dam site on the
Illinois River to prevent the upstream transfer of swimming and
floating aquatic nuisance species, with a focus on Asian carp species,
including--
(1) implementing existing Asian carp monitoring and control
strategies at the Brandon Road site, as applicable, including
real-time monitoring for aquatic nuisance species passing
through by using relevant technology;
(2) using the Brandon Road Lock and Dam site to the maximum
extent practicable to test new aquatic nuisance species control
technologies and measures;
(3) implementing control strategies identified through that
testing necessary to fulfill the objectives of this section,
considering those strategies that minimize the negative impact
on the river ecosystem and desirable aquatic native species,
while maintaining efficient navigation; and
(4) developing best management practices to mitigate
aquatic nuisance species transfer by boat and barge operators
on the Illinois River and Chicago Sanitary and Shipping Canal
and working with operators to implement the practices.
(d) Administration.--
(1) Acquisition of real estate.--The Chief of Engineers may
only acquire real estate that is necessary to carry out this
section and shall do so pursuant to the laws (including
regulations) in existence at the time of the acquisition.
(2) Cooperation.--In carrying out this section, the Chief
of Engineers, the Director of the United States Fish and
Wildlife Service, and the Director of the United States
Geological Survey shall coordinate with each other and--
(A) the Governors of Illinois, Indiana, Michigan,
Minnesota, New York, Ohio, Pennsylvania, and Wisconsin;
(B) the Chicago Area Waterway System Advisory
Committee; and
(C) any other applicable State, regional, local,
and international government entity.
(3) Consultation.--In carrying out this section, the Chief
of Engineers, the Director of the United States Fish and
Wildlife Service, and the Director of the United States
Geological Survey shall consult with appropriate entities in
the business, commerce, and environmental communities.

SEC. 3. ACTIONS RELATED TO THE LONG-TERM PREVENTION OF AQUATIC NUISANCE
SPECIES TRANSFER BETWEEN THE GREAT LAKES BASIN AND
MISSISSIPPI RIVER BASIN.

(a) In General.--The Secretary of the Army, acting through the
Chief of Engineers, the Secretary of the Interior, acting through the
Director of the United States Fish and Wildlife Service and the
Director of the United States Geological Survey, the Administrator of
the Environmental Protection Agency, and any other applicable Federal
entity shall take actions for the long-term prevention of aquatic
nuisance species between the Mississippi River basin and the Great
Lakes basin, including transfer through the Chicago Area Waterway
System.
(b) Construction.--The Chief of Engineers shall coordinate with the
Governor of Illinois, the City of Chicago, the Metropolitan Water
Reclamation District of Greater Chicago, and other relevant entities to
design, engineer, and construct flood mitigation and water quality
measures on the Chicago Area Waterway System related to the prevention
of the transfer of aquatic nuisance species between the Mississippi
River basin and the Great Lakes basin, including transfer through the
Chicago Area Waterway System.
(c) Requirements.--In carrying out subsection (b), the Chief of
Engineers shall--
(1) coordinate with the City of Chicago and the
Metropolitan Water Reclamation District of Greater Chicago to
combine infrastructure to the maximum extent practicable with
the Tunnel and Reservoir Plan of the Metropolitan Water
Reclamation District of Greater Chicago, and other relevant
storm and sewer water infrastructure projects;
(2) ensure flood mitigation in the vicinity of the Chicago
Area Waterway System is improved and strengthen protections
against flooding for residential and commercial neighborhoods;
(3) ensure water quality is protected in the Great Lakes,
the Chicago Waterway System, and the Mississippi River basin
consistent with the Federal Water Pollution Control Act (33
U.S.C. 1251 et seq.);
(4) provide for continued commercial and recreational
watercraft traffic on the Chicago Area Waterway System, and
maintain efficient navigation; and
(5) prioritize efforts to prevent the upstream and
downstream transfer of aquatic nuisance species.
(d) Administration.--
(1) Cooperation.--In carrying out this section, the Chief
of Engineers, the Director of the United States Fish and
Wildlife Service, and the Director of the United States
Geological Survey shall coordinate with each other and--
(A) the Governors of Illinois, Indiana, Michigan,
Minnesota, New York, Ohio, Pennsylvania, and Wisconsin;
(B) the Chicago Area Waterway System Advisory
Committee; and
(C) any other applicable State, regional, local,
and international government entity.
(2) Consultation.--In carrying out this section, the Chief
of Engineers, the Director of the United States Fish and
Wildlife Service, and the Director of the United States
Geological Survey shall consult with appropriate entities in
the business, commerce, and environmental communities.
(3) Delegation.--In carrying out this section, the Chief of
Engineers may delegate parts of the project to non-Federal
entities subject to the availability of funding.
(4) Identification of partners.--In carrying out this
section, the Chief of Engineers shall work to identify non-
Federal cost-share partners when applicable.
(5) Acquisition of real estate.--The Chief of Engineers may
only acquire real estate that is necessary to carry out this
section and shall do so pursuant to the laws (including
regulations) in existence at the time of the acquisition.
(e) Report.--
(1) In general.--Not later than 18 months after the date of
enactment of this Act, and each year thereafter, the Chief of
Engineers shall submit to the Committee on Environment and
Public Works of the Senate and the Committee on Transportation
and Infrastructure of the House of Representatives a report
describing the progress made, and a plan for further actions to
be taken, under this section.
(2) Public availability.--Reports under paragraph (1) shall
be made available to the public through electronic means,
including the Internet.

SEC. 4. SENSE OF CONGRESS.

It is the sense of Congress that there is an ongoing need to
further examine and protect the tributaries and waterways located in
other affected areas and States in the Great Lakes region, including at
a minimum, the St. Croix River, the Minnesota River, the Wisconsin
River, and the Ohio River, against the transfer of aquatic nuisance
species.
Defending Our Great Lakes Act of 2015 This bill requires federal agencies to take immediate actions to prevent the upstream transfer of aquatic nuisance species from the Mississippi River basin to the Great Lakes basin through the Brandon Road Lock and Dam site. The actions must place a special focus on Asian carp species and other aquatic nuisance species of concern to the Great Lakes referred to in the Great Lakes Mississippi River Interbasin Study conducted by the U.S. Army Corps of Engineers. The Army Corps must implement measures to improve the site to prevent the upstream transfer of Asian carp and other aquatic nuisance species swimming through the lock and dam, including by constructing an engineered channel in the approach to the site from the Mississippi River direction. The U.S. Fish and Wildlife Service must implement all appropriate measures around the site on the Illinois River to prevent the upstream transfer of swimming and floating aquatic nuisance species, with a focus on Asian carp species. Federal entities must take actions for the long-term prevention of the transfer of aquatic nuisance species between the Mississippi River and Great Lakes basins, including through the Chicago Area Waterway System. The Army Corps must design, engineer, and construct flood mitigation and water quality measures on the Chicago Area Waterway System related to preventing such transfer.

SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.

(a) Short Title.--This Act may be cited as the ''Capital Gains Tax
Simplification Act of 1998''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.

SEC. 2. REDUCTION AND SIMPLIFICATION OF CAPITAL GAINS TAX.

(a) In General.--Part I of subchapter P of chapter 1 (relating to
treatment of capital gains) is amended by adding at the end the
following new section:

''SEC. 1203. CAPITAL GAINS DEDUCTION.

''If for any taxable year a taxpayer other than a corporation has a
net capital gain, 38 percent of such gain shall be a deduction from
gross income.''
(b) Deduction Allowable Whether or Not Taxpayer Itemizes Other
Deductions.--
(1) Subsection (b) of section 63 is amended by striking
''and'' at the end of paragraph (1), by striking the period at
the end of paragraph (2) and inserting '', and'', and by adding
at the end the following new paragraph:
''(3) the deduction allowed by section 1203.''
(2) Subsection (d) of section 63 is amended by striking
''and'' at the end of paragraph (1), by striking the period at
the end of paragraph (2) and inserting '', and'', and by adding
at the end the following new paragraph:
''(3) the deduction allowed by section 1203.''
(c) Minimum Tax Treatment.--
(1) Paragraph (1) of section 56(b) is amended by adding at
the end the following new subparagraph:
''(G) Capital gain deduction not applicable.--
Section 1203 shall not apply.''
(2) Subsection (b) of section 55 is amended by striking
paragraph (3) and inserting the following new paragraphs:
''(3) Maximum tax on net capital gain.--The amount of tax
determined under the first sentence of paragraph (1)(A)(i)
shall not exceed the sum of--
''(A) the amount determined under such first
sentence computed at the rates and in the same manner
as if this paragraph had not been enacted on the
taxable excess reduced by the net capital gain, plus
''(B) a tax on the net capital gain determined by
using the regular tax capital gains tax rates.
''(4) Regular tax on net capital gain.--For purposes of
paragraph (3), the tax on the net capital gain determined by
using the regular tax capital gains tax rates is the excess
of--
''(A) the tax that would be computed under section
1 if net capital gain were determined with the
adjustments under this part, over
''(B) the tax that would be so computed under
section 1 if the taxable income were reduced by 62
percent of the net capital gain as so determined.''
(d) Repeal of Tax Preference for Exclusion on Small Business
Stock.--
(1) Subsection (a) of section 57 is amended by striking
paragraph (7).
(2) Subclause (II) of section 53(d)(1)(B)(ii) is amended by
striking '', (5), and (7)'' and inserting ''and (5)''.
(e) Treatment of Collectibles.--
(1) In general.--Section 1222 is amended by inserting after
paragraph (11) the following new paragraph:
''(12) Special rule for collectibles.--
''(A) In general.--Any gain or loss from the sale
or exchange of a collectible shall be treated as a
short-term capital gain or loss (as the case may be),
without regard to the period such asset was held. The
preceding sentence shall apply only to the extent the
gain or loss is taken into account in computing taxable
income.
''(B) Treatment of certain sales of interests in
partnerships, etc.--For purposes of subparagraph (A),
any gain from the sale or exchange of an interest in a
partnership, S corporation, or trust which is
attributable to unrealized appreciation in the value of
collectibles held by such entity shall be treated as
gain from the sale or exchange of a collectible. Rules
similar to the rules of section 751(f) shall apply for
purposes of the preceding sentence.
''(C) Collectible.--For purposes of this paragraph,
the term 'collectible' means any capital asset which is
a collectible (as defined in section 408(m) without
regard to paragraph (3) thereof).''
(2) Charitable deduction not affected.--
(A) Paragraph (1) of section 170(e) is amended by
adding at the end thereof the following new sentence:
''For purposes of this paragraph, section 1222 shall be
applied without regard to paragraph (12) thereof
(relating to special rule for collectibles).''
(B) Clause (iv) of section 170(b)(1)(C) is amended
by inserting before the period at the end thereof the
following: ''and section 1222 shall be applied without
regard to paragraph (12) thereof (relating to special
rule for collectibles)''.
(f) Technical and Conforming Changes.--
(1) Section 1 is amended by striking subsection (h).
(2) Subparagraph (E) of section 163(d)(4) is amended to
read as follows:
''(E) Coordination with capital gains deduction.--
The net capital gain taken into account under section
1203 for any taxable year shall be reduced (but not
below zero) by the amount which the taxpayer takes into
account as investment income under subparagraph
(B)(iii) for such year.''
(3) Paragraph (1) of section 170(e) is amended by striking
''the amount of gain'' in the material following subparagraph
(B)(ii) and inserting ''62 percent (100 percent in the case of
a corporation) of the amount of gain''.
(4) Subparagraph (B) of section 172(d)(2) is amended to
read as follows:
''(B) the exclusion under section 1202 and the
deduction under section 1203 shall not be allowed.''
(5) The last sentence of section 453A(c)(3) is amended by
striking all that follows ''long-term capital gain,'' and
inserting ''the maximum rate on net capital gain under section
1201 or the deduction under section 1203 (whichever is
appropriate) shall be taken into account.''
(6)(A) Section 641(d)(2)(A) is amended by striking ''Except
as provided in section 1(h), the'' and inserting ''The''.
(B) Section 641(d)(2)(C) is amended by inserting after
clause (iii) the following new clause:
''(iv) The deduction under section 1203.''
(7) Paragraph (4) of section 642(c) is amended to read as
follows:
''(4) Adjustments.--To the extent that the amount otherwise
allowable as a deduction under this subsection consists of gain
from the sale or exchange of capital assets held for more than
1 year, proper adjustment shall be made for any exclusion
allowable under section 1202 and any deduction allowable under
section 1203 to the estate or trust. In the case of a trust,
the deduction allowed by this subsection shall be subject to
section 681 (relating to unrelated business income).''
(8) Section 642 is amended by adding at the end the
following new subsection:
''(j) Capital Gains Deduction.--The deduction under section 1203 to
an estate or trust shall be computed by excluding the portion (if any)
of the gains for the taxable year which is includible by the income
beneficiaries under sections 652 and 662 (relating to inclusions of
amounts in gross income of beneficiaries of trusts) as gain derived
from the sale or exchange of capital assets.''
(9) The last sentence of section 643(a)(3) is amended to
read as follows: ''The exclusion under section 1202 and the
deduction under section 1203 shall not be taken into account.''
(10) Subparagraph (C) of section 643(a)(6) is amended by
inserting ''(i)'' before ''there shall'' and by inserting
before the period '', and (ii) the deduction under section 1203
(relating to capital gains deduction) shall not be taken into
account''.
(11) Paragraph (4) of section 691(c) is amended by striking
''1(h),'' and by inserting ''1203,'' after ''1202,''.
(12) The second sentence of paragraph (2) of section 871(a)
is amended by striking ''section 1202'' and inserting
''sections 1202 and 1203''.
(13)(A) Paragraph (2) of section 904(b) is amended by
striking subparagraphs (A) and (C), by redesignating
subparagraph (B) as subparagraph (A), and by inserting after
subparagraph (A) (as so redesignated) the following new
subparagraph:
''(B) Other taxpayers.--In the case of a taxpayer
other than a corporation, taxable income from sources
outside the United States shall include gain from the
sale or exchange of capital assets only to the extent
of foreign source capital gain net income.''
(B) Subparagraph (A) of section 904(b)(2), as so
redesignated, is amended--
(i) by striking all that precedes clause (i) and
inserting the following:
''(A) Corporations.--In the case of a corporation--
'', and
(ii) by striking in clause (i) ''in lieu of
applying subparagraph (A),''.
(C) Paragraph (3) of section 904(b) is amended by striking
subparagraphs (D) and (E) and inserting the following new
subparagraph:
''(D) Rate differential portion.--The rate
differential portion of foreign source net capital
gain, net capital gain, or the excess of net capital
gain from sources within the United States over net
capital gain, as the case may be, is the same
proportion of such amount as the excess of the highest
rate of tax specified in section 11(b) over the
alternative rate of tax under section 1201(a) bears to
the highest rate of tax specified in section 11(b).''
(14) Paragraph (1) of section 1402(i) is amended by
inserting '', and the deduction provided by section 1203 shall
not apply'' before the period at the end thereof.
(15) Paragraph (1) of section 1445(e) is amended by
striking ''20 percent'' and inserting ''24.5 percent''.
(16)(A) The second sentence of section 7518(g)(6)(A) is
amended--
(i) by striking ''during a taxable year to which
section 1(h) or 1201(a) applies'', and
(ii) by striking ''20 percent'' and inserting
''24.5 percent''.
(B) The second sentence of section 607(h)(6)(A) of the
Merchant Marine Act, 1936, is amended--
(i) by striking ''during a taxable year to which
section 1(h) or 1201(a) of such Code applies'', and
(ii) by striking ''20 percent'' and inserting
''24.5 percent''.
(g) Clerical Amendment.--The table of sections for part I of
subchapter P of chapter 1 is amended by adding at the end the following
new item:

''Sec. 1203. Capital gains deduction.''
(h) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply to
taxable years beginning after December 31, 1998.
(2) Withholding.--The amendments made by subsection (f)(15)
shall apply only to amounts paid after December 31, 1998.
(3) Repeal of election.--Section 311 of the Taxpayer Relief
Act of 1997 is amended by striking subsection (e).
(4) Coordination with prior transition rule.--Any amount
treated as long-term capital gain by reason of paragraph (3) of
section 1122(h) of the Tax Reform Act of 1986 shall not be
taken into account for purposes of applying section 1203 of the
Internal Revenue Code of 1986 (as added by this section).
Capital Gains Tax Simplification Act of 1998 - Amends the Internal Revenue Code to provide that, if for any taxable year a non-corporate taxpayer has a net capital gain, 38 percent of such gain shall be a deduction from gross income regardless of whether or not the taxpayer itemizes other deductions. Makes such deduction inapplicable to the alternative minimum tax. Revises provisions concerning the maximum and the regular tax on net capital gain for purposes of the alternative minimum tax.
Repeals the tax preference for exclusion for gains on the sale of certain small business stock.
Treats, as a general rule, any gain or loss from the sale or exchange of a collectible as a short-term gain or loss without regard to the period the asset was held.
Amends the Taxpayer Relief Act of 1997, with respect to maximum capital gains rates for individuals, to repeal the allowance of an election to recognize gain on assets held on January 1, 2001.