[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 831 Enrolled Bill (ENR)]
H.R.831
One Hundred Fourth Congress
of the
United States of America
AT THE FIRST SESSION
Begun and held at the City of Washington on Wednesday,
the fourth day of January, one thousand nine hundred and ninety-five
An Act
To amend the Internal Revenue Code of 1986 to permanently extend the
deduction for the health insurance costs of self-employed individuals,
to repeal the provision permitting nonrecognition of gain on sales and
exchanges effectuating policies of the Federal Communications
Commission, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. PERMANENT EXTENSION AND INCREASE OF DEDUCTION FOR HEALTH
INSURANCE COSTS OF SELF-EMPLOYED INDIVIDUALS.
(a) Permanent Extension.--Subsection (l) of section 162 of the
Internal Revenue Code of 1986 (relating to special rules for health
insurance costs of self-employed individuals) is amended by striking
paragraph (6).
(b) Increase in Deduction.--Paragraph (1) of section 162(l) of the
Internal Revenue Code of 1986 is amended by striking ``25 percent'' and
inserting ``30 percent''.
(c) Effective Dates.--
(1) Extension.--The amendment made by subsection (a) shall
apply to taxable years beginning after December 31, 1993.
(2) Increase.--The amendment made by subsection (b) shall apply
to taxable years beginning after December 31, 1994.
SEC. 2. REPEAL OF NONRECOGNITION ON FCC CERTIFIED SALES AND EXCHANGES.
(a) In General.--Subchapter O of chapter 1 of the Internal Revenue
Code of 1986 is amended by striking part V (relating to changes to
effectuate FCC policy).
(b) Conforming Amendments.--Sections 1245(b)(5) and 1250(d)(5) of
the Internal Revenue Code of 1986 are each amended--
(1) by striking ``section 1071 (relating to gain from sale or
exchange to effectuate polices of FCC) or'', and
(2) by striking ``1071 and'' in the heading thereof.
(c) Clerical Amendment.--The table of parts for such subchapter O
is amended by striking the item relating to part V.
(d) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to--
(A) sales and exchanges on or after January 17, 1995, and
(B) sales and exchanges before such date if the FCC tax
certificate with respect to such sale or exchange is issued on
or after such date.
(2) Binding contracts.--
(A) In general.--The amendments made by this section shall
not apply to any sale or exchange pursuant to a written
contract which was binding on January 16, 1995, and at all
times thereafter before the sale or exchange, if the FCC tax
certificate with respect to such sale or exchange was applied
for, or issued, on or before such date.
(B) Sales contingent on issuance of certificate.--
(i) In general.--A contract shall be treated as not
binding for purposes of subparagraph (A) if the sale or
exchange pursuant to such contract, or the material terms
of such contract, were contingent, at any time on January
16, 1995, on the issuance of an FCC tax certificate. The
preceding sentence shall not apply if the FCC tax
certificate for such sale or exchange is issued on or
before January 16, 1995.
(ii) Material terms.--For purposes of clause (i), the
material terms of a contract shall not be treated as
contingent on the issuance of an FCC tax certificate solely
because such terms provide that the sales price would, if
such certificate were not issued, be increased by an amount
not greater than 10 percent of the sales price otherwise
provided in the contract.
(3) FCC tax certificate.--For purposes of this subsection, the
term ``FCC tax certificate'' means any certificate of the Federal
Communications Commission for the effectuation of section 1071 of
the Internal Revenue Code of 1986 (as in effect on the day before
the date of the enactment of this Act).
SEC. 3. SPECIAL RULES RELATING TO INVOLUNTARY CONVERSIONS.
(a) Replacement Property Acquired by Corporations From Related
Persons.--
(1) In general.--Section 1033 of the Internal Revenue Code of
1986 (relating to involuntary conversions) is amended by
redesignating subsection (i) as subsection (j) and by inserting
after subsection (h) the following new subsection:
``(i) Nonrecognition Not To Apply if Corporation Acquires
Replacement Property From Related Person.--
``(1) In general.--In the case of--
``(A) a C corporation, or
``(B) a partnership in which 1 or more C corporations own,
directly or indirectly (determined in accordance with section
707(b)(3)), more than 50 percent of the capital interest, or
profits interest, in such partnership at the time of the
involuntary conversion,
subsection (a) shall not apply if the replacement property or stock
is acquired from a related person. The preceding sentence shall not
apply to the extent that the related person acquired the
replacement property or stock from an unrelated person during the
period described in subsection (a)(2)(B).
``(2) Related person.--For purposes of this subsection, a
person is related to another person if the person bears a
relationship to the other person described in section 267(b) or
707(b)(1).''
(2) Effective date.--The amendment made by paragraph (1) shall
apply to involuntary conversions occurring on or after February 6,
1995.
(b) Application of Section 1033 to Certain Sales Required for
Microwave Relocation.--
(1) In general.--Section 1033 of the Internal Revenue Code of
1986 (relating to involuntary conversions), as amended by
subsection (a), is amended by redesignating subsection (j) as
subsection (k) and by inserting after subsection (i) the following
new subsection:
``(j) Sales or Exchanges To Implement Microwave Relocation
Policy.--
``(1) In general.--For purposes of this subtitle, if a taxpayer
elects the application of this subsection to a qualified sale or
exchange, such sale or exchange shall be treated as an involuntary
conversion to which this section applies.
``(2) Qualified sale or exchange.--For purposes of paragraph
(1), the term `qualified sale or exchange' means a sale or exchange
before January 1, 2000, which is certified by the Federal
Communications Commission as having been made by a taxpayer in
connection with the relocation of the taxpayer from the 1850-
1990MHz spectrum by reason of the Federal Communications
Commission's reallocation of that spectrum for use for personal
communications services. The Commission shall transmit copies of
certifications under this paragraph to the Secretary.''
(2) Effective date.--The amendment made by paragraph (1) shall
apply to sales or exchanges after March 14, 1995.
SEC. 4. DENIAL OF EARNED INCOME CREDIT FOR INDIVIDUALS HAVING EXCESSIVE
INVESTMENT INCOME.
(a) In General.--Section 32 of the Internal Revenue Code of 1986 is
amended by redesignating subsections (i) and (j) as subsections (j) and
(k), respectively, and by inserting after subsection (h) the following
new subsection:
``(i) Denial of Credit for Individuals Having Excessive Investment
Income.--
``(1) In general.--No credit shall be allowed under subsection
(a) for the taxable year if the aggregate amount of disqualified
income of the taxpayer for the taxable year exceeds $2,350.
``(2) Disqualified income.--For purposes of paragraph (1), the
term `disqualified income' means--
``(A) interest or dividends to the extent includible in
gross income for the taxable year,
``(B) interest received or accrued during the taxable year
which is exempt from tax imposed by this chapter, and
``(C) the excess (if any) of--
``(i) gross income from rents or royalties not derived
in the ordinary course of a trade or business, over
``(ii) the sum of--
``(I) the deductions (other than interest) which
are clearly and directly allocable to such gross
income, plus
``(II) interest deductions properly allocable to
such gross income.''
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1995.
SEC. 5. EXTENSION OF SPECIAL RULE FOR CERTAIN GROUP HEALTH PLANS.
Section 13442(b) of the Omnibus Budget Reconciliation Act of 1993
(Public Law 103-66) is amended by striking ``May 12, 1995'' and
inserting ``December 31, 1995''.
SEC. 6. STUDY OF EXPATRIATION TAX.
(a) In General.--The staff of the Joint Committee on Taxation shall
conduct a study of the issues presented by any proposals to affect the
taxation of expatriation, including an evaluation of--
(1) the effectiveness and enforceability of current law with
respect to the tax treatment of expatriation,
(2) the current level of expatriation for tax avoidance
purposes,
(3) any restrictions imposed by any constitutional requirement
that the Federal income tax apply only to realized gains,
(4) the application of international human rights principles to
taxation of expatriation,
(5) the possible effects of any such proposals on the free flow
of capital into the United States,
(6) the impact of any such proposals on existing tax treaties
and future treaty negotiations,
(7) the operation of any such proposals in the case of
interests in trusts,
(8) the problems of potential double taxation in any such
proposals,
(9) the impact of any such proposals on the trade policy
objectives of the United States,
(10) the administrability of such proposals, and
(11) possible problems associated with existing law, including
estate and gift tax provisions.
(b) Report.--The Chief of Staff of the Joint Committee on Taxation
shall, not later than June 1, 1995, report the results of the study
conducted under subsection (a) to the Chairmen of the Committee on Ways
and Means of the House of Representatives and the Committee on Finance
of the Senate.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.