[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5398 Introduced in House (IH)]







107th CONGRESS
  2d Session
                                H. R. 5398

 To amend the Internal Revenue Code of 1986 to allow a minimum credit 
against the alternative minimum tax where stock acquired pursuant to an 
         incentive stock option is sold or exchanged at a loss.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 18, 2002

 Mr. Sam Johnson of Texas (for himself, Mr. Neal of Massachusetts, Mr. 
   Herger, and Mr. Matsui) introduced the following bill; which was 
              referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to allow a minimum credit 
against the alternative minimum tax where stock acquired pursuant to an 
         incentive stock option is sold or exchanged at a loss.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. MINIMUM CREDIT AGAINST THE ALTERNATIVE MINIMUM TAX WHERE 
              STOCK ACQUIRED PURSUANT TO AN INCENTIVE STOCK OPTION IS 
              SOLD OR EXCHANGED AT A LOSS.

    (a) In General.--Section 53 of the Internal Revenue Code of 1986 
(relating to credit for prior year minimum tax liability) is amended by 
adding at the end the following new subsection:
    ``(e) Special Rule in Case of Incentive Stock Options.--
            ``(1) In general.--The amount determined under subsection 
        (c) for any taxable year beginning after December 31, 2001, 
        shall be not less than the lesser of--
                    ``(A) the incentive stock option tax, or
                    ``(B) the greater of $3,000 or 50 percent of the 
                regular tax for such taxable year.
            ``(2) Incentive stock option tax.--For purposes of this 
        subsection, the term `incentive stock option tax' means the 
        excess (if any) of--
                    ``(A) the aggregate tax imposed by section 55 by 
                reason of section 56(b)(3) for all prior taxable years 
                with respect to stock if--
                            ``(i) such stock is sold or exchanged 
                        during the taxable year or any prior taxable 
                        year, and
                            ``(ii) a loss is recognized on such sale or 
                        exchange for purposes of part VI, over
                    ``(B) the aggregate increase in the amount 
                determined under subsection (c) by reason of this 
                subsection for all prior taxable years.''
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2001.
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