I 108th CONGRESS 2d Session H. R. 3806 IN THE HOUSE OF REPRESENTATIVES February 11, 2004 Mr. Gerlach (for himself, Mr. English, Mr. Gillmor, and Mr. Ehlers) 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 credit against the alternative minimum tax where stock acquired pursuant to an incentive stock option is sold or exchanged at a loss.

1.

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, 2003, shall be not less than the incentive stock option tax. (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, 2003.