[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6760 Engrossed in House (EH)]

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115th CONGRESS
  2d Session
                                H. R. 6760

_______________________________________________________________________

                                 AN ACT


 
 To amend the Internal Revenue Code of 1986 to make permanent certain 
    provisions of the Tax Cuts and Jobs Act affecting individuals, 
                    families, and small businesses.

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

SECTION 1. SHORT TITLE, ETC.

    (a) Short Title.--This Act may be cited as the ``Protecting Family 
and Small Business Tax Cuts Act of 2018''.
    (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.
    (c) References to the Tax Cuts and Jobs Act.--Title I of Public Law 
115-97 may be cited as the ``Tax Cuts and Jobs Act''.
    (d) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title, etc.
               TITLE I--INDIVIDUAL REFORM MADE PERMANENT

                        Subtitle A--Rate Reform

Sec. 101. Modification of rates.
   Subtitle B--Deduction for Qualified Business Income of Pass-thru 
                                Entities

Sec. 111. Deduction for qualified business income.
Sec. 112. Limitation on losses for taxpayers other than corporations.
         Subtitle C--Tax Benefits for Families and Individuals

Sec. 121. Increase in standard deduction.
Sec. 122. Increase in and modification of child tax credit.
Sec. 123. Increased limitation for certain charitable contributions.
Sec. 124. Increased contributions to ABLE accounts.
Sec. 125. Rollovers to ABLE programs from 529 programs.
Sec. 126. Treatment of certain individuals performing services in the 
                            Sinai Peninsula of Egypt.
Sec. 127. Extension of reduction in threshold for medical expense 
                            deduction.
                         Subtitle D--Education

Sec. 131. Treatment of student loans discharged on account of death or 
                            disability.
                 Subtitle E--Deductions and Exclusions

Sec. 141. Repeal of deduction for personal exemptions.
Sec. 142. Limitation on deduction for State and local, etc. taxes.
Sec. 143. Limitation on deduction for qualified residence interest.
Sec. 144. Modification of deduction for personal casualty losses.
Sec. 145. Termination of miscellaneous itemized deductions.
Sec. 146. Repeal of overall limitation on itemized deductions.
Sec. 147. Termination of exclusion for qualified bicycle commuting 
                            reimbursement.
Sec. 148. Qualified moving expense reimbursement exclusion limited to 
                            members of Armed Forces.
Sec. 149. Deduction for moving expenses limited to members of Armed 
                            Forces.
Sec. 150. Limitation on wagering losses.
         Subtitle F--Increase in Estate and Gift Tax Exemption

Sec. 151. Increase in estate and gift tax exemption.
    TITLE II--INCREASED EXEMPTION FOR ALTERNATIVE MINIMUM TAX MADE 
                               PERMANENT

Sec. 201. Increased exemption for individuals.
                      TITLE III--BUDGETARY EFFECTS

Sec. 301. Budgetary effects.

               TITLE I--INDIVIDUAL REFORM MADE PERMANENT

                        Subtitle A--Rate Reform

SEC. 101. MODIFICATION OF RATES.

    (a) Married Individuals Filing Joint Returns and Surviving 
Spouses.--Section 1(a) is amended by striking the table contained 
therein and inserting the following:


 
       ``If taxable income is:                    The tax is:
------------------------------------------------------------------------
Not over $19,050.....................  10% of taxable income.
Over $19,050 but not over $77,400....  $1,905, plus 12% of the excess
                                        over $19,050.
Over $77,400 but not over $165,000...  $8,907, plus 22% of the excess
                                        over $77,400.
Over $165,000 but not over $315,000..  $28,179, plus 24% of the excess
                                        over $165,000.
Over $315,000 but not over $400,000..  $64,179, plus 32% of the excess
                                        over $315,000.
Over $400,000 but not over $600,000..  $91,379, plus 35% of the excess
                                        over $400,000.
Over $600,000........................  $161,379, plus 37% of the excess
                                        over $600,000.''.

    (b) Head of Households.--Section 1(b) is amended by striking the 
table contained therein and inserting the following:


 
       ``If taxable income is:                    The tax is:
------------------------------------------------------------------------
Not over $13,600.....................  10% of taxable income.
Over $13,600 but not over $51,800....  $1,360, plus 12% of the excess
                                        over $13,600.
Over $51,800 but not over $82,500....  $5,944, plus 22% of the excess
                                        over $51,800.
Over $82,500 but not over $157,500...  $12,698, plus 24% of the excess
                                        over $82,500.
Over $157,500 but not over $200,000..  $30,698, plus 32% of the excess
                                        over $157,500.
Over $200,000 but not over $500,000..  $44,298, plus 35% of the excess
                                        over $200,000.
Over $500,000........................  $149,298, plus 37% of the excess
                                        over $500,000.''.

    (c) Unmarried Individuals Other Than Surviving Spouses and Heads of 
Household.--Section 1(c) is amended by striking the table contained 
therein and inserting the following:


 
       ``If taxable income is:                    The tax is:
------------------------------------------------------------------------
Not over $9,525......................  10% of taxable income.
Over $9,525 but not over $38,700.....  $952.50, plus 12% of the excess
                                        over $9,525.
Over $38,700 but not over $82,500....  $4,453.50, plus 22% of the excess
                                        over $38,700.
Over $82,500 but not over $157,500...  $14,089.50, plus 24% of the
                                        excess over $82,500.
Over $157,500 but not over $200,000..  $32,089.50, plus 32% of the
                                        excess over $157,500.
Over $200,000 but not over $500,000..  $45,689.50, plus 35% of the
                                        excess over $200,000.
Over $500,000........................  $150,689.50, plus 37% of the
                                        excess over $500,000.''.

    (d) Married Individuals Filing Separate Returns.--Section 1(d) is 
amended by striking the table contained therein and inserting the 
following:


 
       ``If taxable income is:                    The tax is:
------------------------------------------------------------------------
Not over $9,525......................  10% of taxable income.
Over $9,525 but not over $38,700.....  $952.50, plus 12% of the excess
                                        over $9,525.
Over $38,700 but not over $82,500....  $4,453.50, plus 22% of the excess
                                        over $38,700.
Over $82,500 but not over $157,500...  $14,089.50, plus 24% of the
                                        excess over $82,500.
Over $157,500 but not over $200,000..  $32,089.50, plus 32% of the
                                        excess over $157,500.
Over $200,000 but not over $300,000..  $45,689.50, plus 35% of the
                                        excess over $200,000.
Over $300,000........................  $80,689.50, plus 37% of the
                                        excess over $300,000.''.

    (e) Estates and Trusts.--Section 1(e) is amended by striking the 
table contained therein and inserting the following:


 
       ``If taxable income is:                    The tax is:
------------------------------------------------------------------------
Not over $2,550......................  10% of taxable income.
Over $2,550 but not over $9,150......  $255, plus 24% of the excess over
                                        $2,550.
Over $9,150 but not over $12,500.....  $1,839, plus 35% of the excess
                                        over $9,150.
Over $12,500.........................  $3,011.50, plus 37% of the excess
                                        over $12,500.''.

    (f) Inflation Adjustments.--Section 1(f) is amended--
            (1) by striking ``1993'' in paragraph (1) and inserting 
        ``2018'',
            (2) by amending paragraph (2)(A) to read as follows:
                    ``(A) by increasing the minimum and maximum dollar 
                amounts for each bracket for which a tax is imposed 
                under such table by the cost-of-living adjustment for 
                such calendar year, determined under this subsection 
                for such calendar year by substituting `2017' for 
                `2016' in paragraph (3)(A)(ii),'',
            (3) in paragraph (7)(B), by striking all that precedes 
        ``(other than with respect to'' and inserting the following:
                    ``(B) Special rule.--In the case of a table 
                prescribed in lieu of the table contained in subsection 
                (b), (c), or (d), subparagraph (A)'',
            (4) by striking paragraph (8), and
            (5) in the heading, by striking ``Phaseout of Marriage 
        Penalty in 15-percent Bracket; Adjustments'' and inserting 
        ``Adjustments''.
    (g) Special Rules for Certain Children With Unearned Income.--
            (1) In general.--Section 1(g) is amended by striking all 
        that precedes paragraph (2) and inserting the following:
    ``(g) Special Rules for Certain Children With Unearned Income.--
            ``(1) In general.--In the case of any child to whom this 
        subsection applies--
                    ``(A) Modifications to applicable rate brackets.--
                In determining the amount of tax imposed by this 
                section for the taxable year on such child, the income 
                tax table otherwise applicable under this section to 
                such child shall be applied with the following 
                modifications:
                            ``(i) 24-percent bracket.--The maximum 
                        taxable income which is taxed at a rate below 
                        24 percent shall not be more than the sum of--
                                    ``(I) the earned taxable income of 
                                such child, plus
                                    ``(II) the minimum taxable income 
                                for the 24-percent bracket in the table 
                                under subsection (e) (as adjusted under 
                                subsection (f)) for the taxable year.
                            ``(ii) 35-percent bracket.--The maximum 
                        taxable income which is taxed at a rate below 
                        35 percent shall not be more than the sum of--
                                    ``(I) the earned taxable income of 
                                such child, plus
                                    ``(II) the minimum taxable income 
                                for the 35-percent bracket in the table 
                                under subsection (e) (as adjusted under 
                                subsection (f)) for the taxable year.
                            ``(iii) 37-percent bracket.--The maximum 
                        taxable income which is taxed at a rate below 
                        37 percent shall not be more than the sum of--
                                    ``(I) the earned taxable income of 
                                such child, plus
                                    ``(II) the minimum taxable income 
                                for the 37-percent bracket in the table 
                                under subsection (e) (as adjusted under 
                                subsection (f)) for the taxable year.
                    ``(B) Coordination with capital gains rates.--For 
                purposes of applying section 1(h)--
                            ``(i) the maximum zero rate amount shall 
                        not be more than the sum of--
                                    ``(I) the earned taxable income of 
                                such child, plus
                                    ``(II) the amount in effect under 
                                subsection (h)(13) for the taxable 
                                year, and
                            ``(ii) the maximum 15-percent rate amount 
                        shall not be more than the sum of--
                                    ``(I) the earned taxable income of 
                                such child, plus
                                    ``(II) the amount in effect under 
                                subsection (h)(12)(D) for the taxable 
                                year.''.
            (2) Earned taxable income.--Section 1(g)(3) is amended to 
        read as follows:
            ``(3) Earned taxable income.--For purposes of this 
        subsection, the term `earned taxable income' means, with 
        respect to any child for any taxable year, the taxable income 
        of such child reduced (but not below zero) by the net unearned 
        income of such child.''.
            (3) Conforming amendment.--So much of paragraph (5) of 
        section 1(g) as precedes subparagraph (A) thereof is amended to 
        read as follows:
            ``(5) Special rules for determining parent eligible to make 
        election.--For purposes of paragraph (7), the parent referred 
        to in subparagraph (A)(iv) thereof is--''.
    (h) Application of Income Tax Brackets to Capital Gains Brackets.--
Section 1(h) is amended--
            (1) in paragraph (1)(B)(i), by striking ``25 percent'' and 
        inserting ``22 percent'',
            (2) in paragraph (1)(C)(ii)(I), by striking ``which would 
        (without regard to this paragraph) be taxed at a rate below 
        39.6 percent'' and inserting ``below the maximum 15-percent 
        rate amount'', and
            (3) by adding at the end the following new paragraphs:
            ``(12) Maximum 15-percent rate amount defined.--For 
        purposes of this subsection, the maximum 15-percent rate amount 
        shall be--
                    ``(A) in the case of a joint return or surviving 
                spouse (as defined in section 2(a)), $479,000 (\1/2\ 
                such amount in the case of a married individual filing 
                a separate return),
                    ``(B) in the case of an individual who is the head 
                of a household (as defined in section 2(b)), $452,400,
                    ``(C) in the case of any other individual (other 
                than an estate or trust), $425,800, and
                    ``(D) in the case of an estate or trust, $12,700.
            ``(13) Determination of 0 percent rate bracket for estates 
        and trusts.--In the case of any estate or trust, paragraph 
        (1)(B) shall be applied by treating the amount determined in 
        clause (i) thereof as being equal to $2,600.
            ``(14) Inflation adjustment.--
                    ``(A) In general.--In the case of any taxable year 
                beginning after 2018, each of the dollar amounts in 
                paragraphs (12) and (13) shall be increased by an 
                amount equal to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under subsection (f)(3) for the 
                        calendar year in which the taxable year begins, 
                        determined by substituting `calendar year 2017' 
                        for `calendar year 2016' in subparagraph 
                        (A)(ii) thereof.
                    ``(B) Rounding.--If any increase under subparagraph 
                (A) is not a multiple of $50, such increase shall be 
                rounded to the next lowest multiple of $50.''.
    (i) Application of Section 15.--
            (1) In general.--Subsection (a) of section 15 is amended by 
        striking ``If any rate of tax'' and inserting ``In the case of 
        a corporation, if any rate of tax''.
            (2) Conforming amendments.--
                    (A) Section 15 is amended by striking subsections 
                (d), (e), and (f).
                    (B) Section 6013(c) is amended by striking 
                ``sections 15, 443, and 7851(a)(1)(A)'' and inserting 
                ``section 443''.
                    (C) The heading of section 15 is amended by 
                inserting ``on corporations'' after ``effect of 
                changes''.
                    (D) The table of sections for part III of 
                subchapter A of chapter 1 is amended by striking the 
                item relating to section 15 and inserting the following 
                new item:

``Sec. 15. Effect of changes on corporations.''.
    (j) Conforming Amendments.--
            (1) Section 1 is amended by striking subsections (i) and 
        (j).
            (2) Section 3402(q)(1) is amended by striking ``third 
        lowest'' and inserting ``fourth lowest''.
    (k) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to taxable years beginning after December 31, 2017.
            (2) Application of section 15.--Section 15 of the Internal 
        Revenue Code of 1986 shall not apply to any change in a rate of 
        tax by reason of--
                    (A) section 1(j) of such Code (as in effect before 
                its repeal by this section), or
                    (B) any amendment made by this Act.

   Subtitle B--Deduction for Qualified Business Income of Pass-thru 
                                Entities

SEC. 111. DEDUCTION FOR QUALIFIED BUSINESS INCOME.

    (a) In General.--Section 199A is amended by striking subsection 
(i).
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2017.

SEC. 112. LIMITATION ON LOSSES FOR TAXPAYERS OTHER THAN CORPORATIONS.

    (a) In General.--Section 461 is amended--
            (1) by amending subsection (l)(1) to read as follows:
            ``(1) Limitation.--In the case of a taxpayer other than a 
        corporation, any excess business loss of the taxpayer for the 
        taxable year shall not be allowed.'', and
            (2) by striking subsection (j) and redesignating 
        subsections (k) and (l) (as amended) as subsections (j) and 
        (k), respectively.
    (b) Conforming Amendments.--
            (1) Section 58(a)(2)(A) is amended by striking ``461(k)'' 
        and inserting ``461(j)''.
            (2) Section 461(i)(4) is amended by striking ``subsection 
        (k)'' and inserting ``subsection (j)''.
            (3) Section 464(d)(2)(B)(iii) is amended by striking 
        ``section 461(k)(2)(E)'' and inserting ``section 
        461(j)(2)(E)''.
            (4) Subparagraphs (B) and (C) of section 1256(e)(3) are 
        each amended by striking ``section 461(k)(4)'' and inserting 
        ``section 461(j)(4)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2017.

         Subtitle C--Tax Benefits for Families and Individuals

SEC. 121. INCREASE IN STANDARD DEDUCTION.

    (a) In General.--Section 63(c)(2) is amended--
            (1) by striking ``$4,400'' in subparagraph (B) and 
        inserting ``$18,000'', and
            (2) by striking ``$3,000'' in subparagraph (C) and 
        inserting ``$12,000''.
    (b) Inflation Adjustment.--Section 63(c)(4) is amended to read as 
follows:
            ``(4) Adjustments for inflation.--
                    ``(A) In general.--In the case of a taxable year 
                beginning after 2018, each dollar amount in paragraph 
                (2)(B), (2)(C), or (5) or subsection (f) shall be 
                increased by an amount equal to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for the 
                        calendar year in which the taxable year begins, 
                        determined by substituting for `2016' in 
                        subparagraph (A)(ii) thereof--
                                    ``(I) in the case of the dollar 
                                amounts contained in paragraph (2)(B) 
                                or (2)(C), `2017',
                                    ``(II) in the case of the dollar 
                                amounts contained in paragraph (5)(A) 
                                or subsection (f), `1987', and
                                    ``(III) in the case of the dollar 
                                amount contained in paragraph (5)(B), 
                                `1997'.
                    ``(B) Rounding.--If any increase under subparagraph 
                (A) is not a multiple of $50, such increase shall be 
                rounded to the next lowest multiple of $50.''.
    (c) Conforming Amendments.--
            (1) Section 1(f)(7)(A) is amended by striking ``section 
        63(c)(4),''.
            (2) Section 1(f)(7)(B) is amended by striking ``sections 
        63(c)(4) and'' and inserting ``section''.
            (3) Section 63(c) is amended by striking paragraph (7).
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2017.

SEC. 122. INCREASE IN AND MODIFICATION OF CHILD TAX CREDIT.

    (a) In General.--Section 24 is amended by striking subsections (a), 
(b), and (c) and inserting the following new subsections:
    ``(a) Allowance of Credit.--There shall be allowed as a credit 
against the tax imposed by this chapter for the taxable year an amount 
equal to the sum of--
            ``(1) $2,000 for each qualifying child of the taxpayer, and
            ``(2) $500 for each qualifying dependent (other than a 
        qualifying child) of the taxpayer.
    ``(b) Limitation Based on Adjusted Gross Income.--The amount of the 
credit allowable under subsection (a) shall be reduced (but not below 
zero) by $50 for each $1,000 (or fraction thereof) by which the 
taxpayer's modified adjusted gross income exceeds $400,000 in the case 
of a joint return ($200,000 in any other case). For purposes of the 
preceding sentence, the term ``modified adjusted gross income'' means 
adjusted gross income increased by any amount excluded from gross 
income under section 911, 931, or 933.
    ``(c) Qualifying Child; Qualifying Dependent.--For purposes of this 
section--
            ``(1) Qualifying child.--The term `qualifying child' means 
        any qualifying dependent of the taxpayer--
                    ``(A) who is a qualifying child (as defined in 
                section 7706(c)) of the taxpayer,
                    ``(B) who has not attained age 17 at the close of 
                the calendar year in which the taxable year of the 
                taxpayer begins, and
                    ``(C) whose name and social security number are 
                included on the taxpayer's return of tax for the 
                taxable year.
            ``(2) Qualifying dependent.--The term `qualifying 
        dependent' means any dependent of the taxpayer (as defined in 
        section 7706 without regard to all that follows `resident of 
        the United States' in section 7706(b)(3)(A)) whose name and TIN 
        are included on the taxpayer's return of tax for the taxable 
        year.
            ``(3) Social security number defined.--For purposes of this 
        subsection, the term `social security number' means, with 
        respect to a return of tax, a social security number issued to 
        an individual by the Social Security Administration, but only 
        if the social security number is issued--
                    ``(A) to a citizen of the United States or pursuant 
                to subclause (I) (or that portion of subclause (III) 
                that relates to subclause (I)) of section 
                205(c)(2)(B)(i) of the Social Security Act, and
                    ``(B) on or before the due date of filing such 
                return.''.
    (b) Portion of Credit Refundable.--
            (1) In general.--Section 24(d)(1)(A) is amended to read as 
        follows:
                    ``(A) the credit which would be allowed under this 
                section determined--
                            ``(i) by substituting `$1,400' for `$2,000' 
                        in subsection (a)(1),
                            ``(ii) without regard to subsection (a)(2), 
                        and
                            ``(iii) without regard to this subsection 
                        and the limitation under section 26(a), or''.
            (2) Modification of limitation based on earned income.--
        Section 24(d)(1)(B)(i) is amended by striking ``$3,000'' and 
        inserting ``$2,500''.
            (3) Inflation adjustment.--Section 24(d) is amended by 
        inserting after paragraph (3) the following new paragraph:
            ``(4) Adjustment for inflation.--
                    ``(A) In general.--In the case of a taxable year 
                beginning after 2018, the $1,400 amount in paragraph 
                (1)(A)(i) shall be increased by an amount equal to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for the 
                        calendar year in which the taxable year begins, 
                        determined by substituting `2017' for `2016' in 
                        subparagraph (A)(ii) thereof.
                    ``(B) Rounding.--If any increase under subparagraph 
                (A) is not a multiple of $100, such increase shall be 
                rounded to the next lowest multiple of $100.
                    ``(C) Limitation.--The amount of any increase under 
                subparagraph (A) (after the application of subparagraph 
                (B)) shall not exceed $600.''.
            (4) Conforming amendments.--
                    (A) Section 24(e) is amended to read as follows:
    ``(e) Taxpayer Identification Requirement.--No credit shall be 
allowed under this section if the identifying number of the taxpayer 
was issued after the due date for filing the return of tax for the 
taxable year.''.
                    (B) Section 24 is amended by striking subsection 
                (h).
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2017.

SEC. 123. INCREASED LIMITATION FOR CERTAIN CHARITABLE CONTRIBUTIONS.

    (a) In General.--Section 170(b)(1)(G) is amended to read as 
follows:
                    ``(G) Cash contributions.--
                            ``(i) In general.--Any contribution of cash 
                        to an organization described in subparagraph 
                        (A) shall be allowed to the extent that the 
                        aggregate of such contributions does not exceed 
                        60 percent of the taxpayer's contribution base 
                        for the taxable year, reduced by the aggregate 
                        amount of contributions allowable under 
                        subparagraph (A) for such taxpayer for such 
                        year.
                            ``(ii) Carryover.--If the aggregate amount 
                        of contributions described in clause (i) 
                        exceeds the limitation of clause (i), such 
                        excess shall be treated (in a manner consistent 
                        with the rules of subsection (d)(1)) as a 
                        charitable contribution to which clause (i) 
                        applies in each of the 5 succeeding years in 
                        order of time.''.
    (b) Coordination With Limitations on Other Contributions.--
            (1) Coordination with 50 percent limitation.--Section 
        170(b)(1)(A) is amended by striking ``Any charitable 
        contribution'' and inserting ``Any charitable contribution 
        other than a contribution described in subparagraph (G)''.
            (2) Coordination with 30 percent limitation.--Section 
        170(b)(1)(B) is amended--
                    (A) in the matter preceding clause (i), by striking 
                ``to which subparagraph (A) applies'' and inserting 
                ``to which subparagraph (A) or (G) applies'',
                    (B) by amending clause (ii) to read as follows:
                            ``(ii) the excess of--
                                    ``(I) the sum of 50 percent of the 
                                taxpayer's contribution base for the 
                                taxable year, plus so much of the 
                                amount of charitable contributions 
                                allowable under subparagraph (G) as 
                                does not exceed 10 percent of such 
                                contribution base, over
                                    ``(II) the amount of charitable 
                                contributions allowable under 
                                subparagraphs (A) and (G) (determined 
                                without regard to subparagraph (C)).'', 
                                and
                    (C) in the matter following clause (ii), by 
                striking ``(to which subparagraph (A) does not apply)'' 
                and inserting ``(to which neither subparagraph (A) nor 
                (G) applies)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to contributions made in taxable years beginning after December 
31, 2017.

SEC. 124. INCREASED CONTRIBUTIONS TO ABLE ACCOUNTS.

    (a) Increase in Limitation for Contributions From Compensation of 
Individuals With Disabilities.--Section 529A(b)(2)(B)(ii) is amended by 
striking ``before January 1, 2026''.
    (b) Allowance of Saver's Credit for ABLE Contributions by Account 
Holder.--Section 25B(d)(1)(D) is amended by striking ``made before 
January 1, 2026,''.
    (c)  Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2017.

SEC. 125. ROLLOVERS TO ABLE PROGRAMS FROM 529 PROGRAMS.

    (a) In General.--Section 529(c)(3)(C)(i)(III) is amended by 
striking ``before January 1, 2026,''.
    (b)  Effective Date.--The amendments made by this section shall 
apply to distributions after December 31, 2017.

SEC. 126. TREATMENT OF CERTAIN INDIVIDUALS PERFORMING SERVICES IN THE 
              SINAI PENINSULA OF EGYPT.

    (a) In General.--Section 112(c)(2) is amended--
            (1) by striking ``means any area'' and inserting ``means--
                    ``(A) any area'', and
            (2) by striking the period at the end and inserting ``, and
                    ``(B) the Sinai Peninsula of Egypt.''.
    (b) Period of Treatment.--Section 112(c)(3) is amended--
            (1) by striking ``only if performed'' and inserting ``only 
        if--
                    ``(A) in the case of an area described in paragraph 
                (2)(A), such service is performed'', and
            (2) by striking the period at the end and inserting ``, and
                    ``(B) in the case of the area described in 
                paragraph (2)(B), such service is performed during any 
                period with respect to which one or more members of the 
                Armed Forces of the United States are entitled to 
                special pay under section 310 of title 37, United 
                States Code (relating to special pay; duty subject to 
                hostile fire or imminent danger), for service performed 
                in such area.''.
    (c) Conforming Amendment.--The Tax Cuts and Jobs Act is amended by 
striking section 11026.
    (d) Effective Date.--The amendments made by this section shall 
apply with respect to services performed on or after the date of the 
enactment of this Act.

SEC. 127. EXTENSION OF REDUCTION IN THRESHOLD FOR MEDICAL EXPENSE 
              DEDUCTION.

    (a) In General.--Section 213(a) is amended by inserting ``(7.5 
percent in the case of any taxable year beginning after December 31, 
2018, and ending before January 1, 2021)'' after ``10 percent''.
    (b) Conforming Amendments.--
            (1) Section 56(b)(1) is amended by striking subparagraph 
        (B) and by redesignating subparagraphs (C) through (F) as 
        subparagraphs (B) through (E), respectively.
            (2) Section 213 is amended by striking subsection (f).
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2018.

                         Subtitle D--Education

SEC. 131. TREATMENT OF STUDENT LOANS DISCHARGED ON ACCOUNT OF DEATH OR 
              DISABILITY.

    (a) In General.--Section 108(f)(5) is amended by striking ``after 
December 31, 2017, and before January 1, 2026''.
    (b) Effective Date.--The amendment made by this section shall apply 
to discharges of indebtedness after December 31, 2017.

                 Subtitle E--Deductions and Exclusions

SEC. 141. REPEAL OF DEDUCTION FOR PERSONAL EXEMPTIONS.

    (a) In General.--Part V of subchapter B of chapter 1 is hereby 
repealed.
    (b) Definition of Dependent Retained.--Section 152, prior to the 
repeal made by subsection (a), is hereby redesignated as section 7706 
and moved to the end of chapter 79.
    (c) Application to Trusts and Estates.--Section 642(b) is amended--
            (1) in paragraph (2)(C)--
                    (A) in clause (i), by striking ``the exemption 
                amount under section 151(d)'' and all that follows 
                through the period at the end and inserting ``the 
                dollar amount in effect under section 7706(d)(1)(B).'', 
                and
                    (B) by striking clause (iii),
            (2) by striking paragraph (3), and
            (3) by striking ``Deduction For Personal Exemption'' in the 
        heading thereof and inserting ``Basic Deduction''.
    (d) Application to Nonresident Aliens.--Section 873(b) is amended 
by striking paragraph (3).
    (e) Modification of Return Requirement.--
            (1) In general.--Section 6012(a)(1) is amended to read as 
        follows:
            ``(1) Every individual who has gross income for the taxable 
        year, except that a return shall not be required of--
                    ``(A) an individual who is not married (determined 
                by applying section 7703) and who has gross income for 
                the taxable year which does not exceed the standard 
                deduction applicable to such individual for such 
                taxable year under section 63, or
                    ``(B) an individual entitled to make a joint return 
                if--
                            ``(i) the gross income of such individual, 
                        when combined with the gross income of such 
                        individual's spouse, for the taxable year does 
                        not exceed the standard deduction which would 
                        be applicable for such taxable year under 
                        section 63 if such individual and such 
                        individual's spouse made a joint return,
                            ``(ii) such individual's spouse does not 
                        make a separate return, and
                            ``(iii) neither such individual nor such 
                        individual's spouse is an individual described 
                        in section 63(c)(4) who has income (other than 
                        earned income) in excess of the amount in 
                        effect under section 63(c)(4)(A).''.
            (2) Bankruptcy estates.--Section 6012(a)(8) is amended by 
        striking ``the sum of the exemption amount plus the basic 
        standard deduction under section 63(c)(2)(C)'' and inserting 
        ``the standard deduction in effect under section 63(c)(1)(B)''.
            (3) Conforming amendment.--Section 6012 is amended by 
        striking subsection (f).
    (f) Conforming Amendments.--
            (1) Section 1(f)(7), as amended by section 121, is 
        amended--
                    (A) by striking ``, section 68(b)(2) or section 
                151(d)(4)'' in subparagraph (A) and inserting ``or 
                section 68(b)(2)'', and
                    (B) by striking ``(other than with respect to 
                section 151(d)(4)(A))'' in subparagraph (B).
            (2) Section 1(g)(5)(A) is amended by striking ``section 
        152(e)'' and inserting ``section 7706(e)''.
            (3) Section 2(a)(1)(B) is amended--
                    (A) by striking ``section 152'' and inserting 
                ``section 7706'', and
                    (B) by striking ``with respect to whom the taxpayer 
                is entitled to a deduction for the taxable year under 
                section 151'' and inserting ``whose TIN is included on 
                the taxpayer's return of tax for the taxable year''.
            (4) Section 2(b)(1)(A)(i) is amended--
                    (A) in the matter preceding subclause (I)--
                            (i) by striking ``section 152(c)'' and 
                        inserting ``section 7706(c)'', and
                            (ii) by striking ``section 152(e)'' and 
                        inserting ``section 7706(e)'', and
                    (B) in subclause (II), by striking ``section 
                152(b)(2) or 152(b)(3)'' and inserting ``section 
                7706(b)(2) or 7706(b)(3)''.
            (5) Section 2(b)(1)(A)(ii) is amended by striking ``if the 
        taxpayer is entitled to a deduction for the taxable year for 
        such person under section 151'' and inserting ``if the taxpayer 
        included such person's TIN on the return of tax for the taxable 
        year''.
            (6) Section 2(b)(1)(B) is amended by striking ``if the 
        taxpayer is entitled to a deduction for the taxable year for 
        such father or mother under section 151'' and inserting ``if 
        such father or mother is a dependent of the taxpayer and the 
        taxpayer included such father or mother's TIN on the return of 
        tax for the taxable year''.
            (7) Section 2(b)(3)(B) is amended--
                    (A) by striking ``section 152(d)(2)'' in clause (i) 
                and inserting ``section 7706(d)(2)'', and
                    (B) by striking ``section 152(d)'' in clause (ii) 
                and inserting ``section 7706(d)''.
            (8) Section 21(b)(1)(A) is amended by striking ``section 
        152(a)(1)'' and inserting ``section 7706(a)(1)''.
            (9) Section 21(b)(1)(B) is amended by striking ``section 
        152'' and inserting ``section 7706''.
            (10) Section 21(e)(5)(A) is amended by striking ``section 
        152(e)'' and inserting ``section 7706(e)''.
            (11) Section 21(e)(5) is amended by striking ``section 
        152(e)(4)(A)'' in the matter following subparagraph (B) and 
        inserting ``section 7706(e)(4)(A)''.
            (12) Section 21(e)(6)(A) is amended to read as follows:
                    ``(A) who is a dependent of either the taxpayer or 
                the taxpayer's spouse for the taxable year, or''.
            (13) Section 21(e)(6)(B) is amended by striking ``section 
        152(f)(1)'' and inserting ``section 7706(f)(1)''.
            (14) Section 25A(f)(1)(A)(iii) is amended by striking 
        ``with respect to whom the taxpayer is allowed a deduction 
        under section 151''.
            (15) Section 25A(g)(3) is amended by striking ``If a 
        deduction under section 151 with respect to an individual is 
        allowed to another taxpayer'' and inserting ``If an individual 
        is a dependent of another taxpayer''.
            (16) Section 25B(c)(2)(A) is amended by striking ``any 
        individual with respect to whom a deduction under section 151 
        is allowed to another taxpayer'' and inserting ``any individual 
        who is a dependent of another taxpayer''.
            (17) Section 25B(c)(2)(B) is amended by striking ``section 
        152(f)(2)'' and inserting ``section 7706(f)(2)''.
            (18) Section 32(c)(1)(A)(ii)(III) is amended by striking 
        ``a dependent for whom a deduction is allowable under section 
        151 to another taxpayer'' and inserting ``a dependent of 
        another taxpayer''.
            (19) Section 32(c)(3) is amended--
                    (A) in subparagraph (A)--
                            (i) by striking ``section 152(c)'' and 
                        inserting ``section 7706(c)'', and
                            (ii) by striking ``section 152(e)'' and 
                        inserting ``section 7706(e)'',
                    (B) in subparagraph (B), by striking ``unless the 
                taxpayer is entitled to a deduction under section 151 
                for such taxable year with respect to such individual 
                (or would be so entitled but for section 152(e)'' and 
                inserting ``if such individual is not treated as a 
                dependent of such taxpayer for such taxable year by 
                reason of section 7706(b)(2) (determined without regard 
                to section 7706(e))'', and
                    (C) in subparagraph (C), by striking ``section 
                152(c)(1)(B)'' and inserting ``section 7706(c)(1)(B)''.
            (20) Section 35(d)(1)(B) is amended by striking ``with 
        respect to whom the taxpayer is entitled to a deduction under 
        section 151(c)'' and inserting ``if the taxpayer included such 
        person's TIN on the return of tax for the taxable year''.
            (21) Section 35(d)(2) is amended--
                    (A) by striking ``section 152(e)'' and inserting 
                ``section 7706(e)'', and
                    (B) by striking ``section 152(e)(4)(A)'' and 
                inserting ``section 7706(e)(4)(A)''.
            (22) Section 36B(b)(2)(A) is amended by striking ``section 
        152'' and inserting ``section 7706''.
            (23) Section 36B(b)(3)(B) is amended by striking ``unless a 
        deduction is allowed under section 151 for the taxable year 
        with respect to a dependent'' in the flush matter at the end 
        and inserting ``unless the taxpayer has a dependent for the 
        taxable year (and the taxpayer included such dependent's TIN on 
        the return of tax for the taxable year)''.
            (24) Section 36B(c)(1)(D) is amended by striking ``with 
        respect to whom a deduction under section 151 is allowable to 
        another taxpayer'' and inserting ``who is a dependent of 
        another taxpayer''.
            (25) Section 36B(d)(1) is amended by striking ``equal to 
        the number of individuals for whom the taxpayer is allowed a 
        deduction under section 151 (relating to allowance of deduction 
        for personal exemptions) for the taxable year'' and inserting 
        ``the sum of 1 (2 in the case of a joint return) plus the 
        number of individuals who are dependents of the taxpayer for 
        the taxable year''.
            (26) Section 36B(e)(1) is amended by striking ``1 or more 
        individuals for whom a taxpayer is allowed a deduction under 
        section 151 (relating to allowance of deduction for personal 
        exemptions) for the taxable year (including the taxpayer or his 
        spouse)'' and inserting ``1 or more of the taxpayer, the 
        taxpayer's spouse, or any dependent of the taxpayer''.
            (27) Section 42(i)(3)(D)(ii)(I) is amended by striking 
        ``section 152'' and inserting ``section 7706''.
            (28) Section 45R(e)(1)(A)(iv) is amended--
                    (A) by striking ``section 152(d)(2)'' and inserting 
                ``section 7706(d)(2)'', and
                    (B) by striking ``section 152(d)(2)(H)'' and 
                inserting ``section 7706(d)(2)(H)''.
            (29) Section 51(i)(1) is amended--
                    (A) by striking ``section 152(d)(2)'' in 
                subparagraphs (A) and (B) and inserting ``section 
                7706(d)(2)'', and
                    (B) by striking ``section 152(d)(2)(H)'' in 
                subparagraph (C) and inserting ``section 
                7706(d)(2)(H)''.
            (30) Section 56(b)(1)(D), as amended by the preceding 
        provisions of this Act, is amended--
                    (A) by striking ``, the deduction for personal 
                exemptions under section 151,'', and
                    (B) by striking ``and deduction for personal 
                exemptions'' in the heading thereof.
            (31) Section 63(b) is amended by adding ``and'' at the end 
        of paragraph (1), by striking paragraph (2), and by 
        redesignating paragraph (3) as paragraph (2).
            (32) Section 63(c), as amended by section 121, is amended 
        by striking paragraph (3) and redesignating paragraphs (4), 
        (5), and (6) as paragraphs (3), (4), and (5), respectively.
            (33) Section 63(c)(4), as redesignated, is amended--
                    (A) by striking ``with respect to whom a deduction 
                under section 151 is allowable to'' and inserting ``who 
                is a dependent of'', and
                    (B) by striking ``certain'' in the heading thereof.
            (34) Section 63(d) is amended by adding ``and'' at the end 
        of paragraph (1), by striking paragraph (2), and by 
        redesignating paragraph (3) as paragraph (2).
            (35) Section 63(f) is amended by striking all that precedes 
        paragraph (3) and inserting the following:
    ``(f) Additional Standard Deduction for the Aged and Blind.--
            ``(1) In general.--For purposes of subsection (c)(1), the 
        additional standard deduction is, with respect to a taxpayer 
        for a taxable year, the sum of--
                    ``(A) $600 if the taxpayer has attained age 65 
                before the close of such taxable year, and
                    ``(B) $600 if the taxpayer is blind as of the close 
                of such taxable year.
            ``(2) Application to married individuals.--
                    ``(A) Joint returns.--In the case of a joint 
                return, paragraph (1) shall be applied separately with 
                respect to each spouse.
                    ``(B) Certain married individuals filing 
                separately.--In the case of a married individual filing 
                a separate return, if--
                            ``(i) the spouse of such individual has no 
                        gross income for the calendar year in which the 
                        taxable year of such individual begins,
                            ``(ii) such spouse is not the dependent of 
                        another taxpayer for a taxable year beginning 
                        in the calendar year in which such individual's 
                        taxable year begins, and
                            ``(iii) the TIN of such spouse is included 
                        on such individual's return of tax for the 
                        taxable year,
                the additional standard deduction shall be determined 
                in the same manner as if such individual and such 
                individual's spouse filed a joint return.''.
            (36) Section 63(f)(3) is amended by striking ``paragraphs 
        (1) and (2)'' and inserting ``subparagraphs (A) and (B) of 
        paragraph (1)''.
            (37) Section 72(t)(2)(D)(i)(III) is amended by striking 
        ``section 152'' and inserting ``section 7706''.
            (38) Section 72(t)(7)(A)(iii) is amended by striking 
        ``section 152(f)(1)'' and inserting ``section 7706(f)(1)''.
            (39) Section 105(b) is amended--
                    (A) by striking ``as defined in section 152'' and 
                inserting ``as defined in section 7706'',
                    (B) by striking ``section 152(f)(1)'' and inserting 
                ``section 7706(f)(1)'' and
                    (C) by striking ``section 152(e)'' and inserting 
                ``section 7706(e)''.
            (40) Section 105(c)(1) is amended by striking ``section 
        152'' and inserting ``section 7706''.
            (41) Section 125(e)(1)(D) is amended by striking ``section 
        152'' and inserting ``section 7706''.
            (42) Section 129(c)(1) is amended to read as follows:
            ``(1) who is a dependent of such employee or of such 
        employee's spouse, or''.
            (43) Section 129(c)(2) is amended by striking ``section 
        152(f)(1)'' and inserting ``section 7706(f)(1)''.
            (44) Section 132(h)(2)(B) is amended--
                    (A) by striking ``section 152(f)(1)'' and inserting 
                ``section 7706(f)(1)'', and
                    (B) by striking ``section 152(e)'' and inserting 
                ``section 7706(e)''.
            (45) Section 139D(c)(5) is amended by striking ``section 
        152'' and inserting ``section 7706''.
            (46) Section 139E(c)(2) is amended by striking ``section 
        152'' and inserting ``section 7706''.
            (47) Section 162(l)(1)(D) is amended by striking ``section 
        152(f)(1)'' and inserting ``section 7706(f)(1)''.
            (48) Section 170(g)(1) is amended by striking ``section 
        152'' and inserting ``section 7706''.
            (49) Section 170(g)(3) is amended by striking ``section 
        152(d)(2)'' and inserting ``section 7706(d)(2)''.
            (50) Section 172(d) is amended by striking paragraph (3).
            (51) Section 213(a) is amended by striking ``section 152'' 
        and inserting ``section 7706''.
            (52) Section 213(d)(5) is amended by striking ``section 
        152(e)'' and inserting ``section 7706(e)''.
            (53) Section 213(d)(11) is amended by striking ``section 
        152(d)(2)'' in the matter following subparagraph (B) and 
        inserting ``section 7706(d)(2)''.
            (54) Section 220(b)(6) is amended by striking ``with 
        respect to whom a deduction under section 151 is allowable to'' 
        and inserting ``who is a dependent of''.
            (55) Section 220(d)(2)(A) is amended by striking ``section 
        152'' and inserting ``section 7706''.
            (56) Section 221(d)(4) is amended by striking ``section 
        152'' and inserting ``section 7706''.
            (57) Section 222(c)(3) is amended by striking ``with 
        respect to whom a deduction under section 151 is allowable to'' 
        and inserting ``who is a dependent of''.
            (58) Section 223(b)(6) is amended by striking ``with 
        respect to whom a deduction under section 151 is allowable to'' 
        and inserting ``who is a dependent of''.
            (59) Section 223(d)(2)(A) is amended by striking ``section 
        152'' and inserting ``section 7706''.
            (60) Section 401(h) is amended by striking ``section 
        152(f)(1)'' in the last sentence and inserting ``section 
        7706(f)(1)''.
            (61) Section 402(l)(4)(D) is amended by striking ``section 
        152'' and inserting ``section 7706''.
            (62) Section 409A(a)(2)(B)(ii)(I) is amended by striking 
        ``section 152(a)'' and inserting ``section 7706(a)''.
            (63) Section 441(f)(2)(B)(iii) is amended by striking ``, 
        but only the adjusted amount of the deductions for personal 
        exemptions as described in section 443(c)''.
            (64) Section 443 is amended--
                    (A) in subsection (b)--
                            (i) by striking paragraph (3), and
                            (ii) by striking ``modified taxable 
                        income'' and inserting ``taxable income'' each 
                        place such term appears,
                    (B) by striking subsection (c), and
                    (C) by redesignating subsections (d) and (e) as 
                subsections (c) and (d), respectively.
            (65) Section 501(c)(9) is amended by striking ``section 
        152(f)(1)'' and inserting ``section 7706(f)(1)''.
            (66) Section 529(e)(2)(B) is amended by striking ``section 
        152(d)(2)'' and inserting ``section 7706(d)(2)''.
            (67) Section 529A(e)(4) is amended--
                    (A) by striking ``section 152(d)(2)(B)'' and 
                inserting ``section 7706(d)(2)(B)'', and
                    (B) by striking ``section 152(f)(1)(B)'' and 
                inserting ``section 7706(f)(1)(B)''.
            (68) Section 643(a)(2) is amended--
                    (A) by striking ``(relating to deduction for 
                personal exemptions)'' and inserting ``(relating to 
                basic deduction)'', and
                    (B) by striking ``Deduction for personal 
                exemption'' in the heading thereof and inserting 
                ``Basic deduction''.
            (69) Section 703(a)(2) is amended by striking subparagraph 
        (A) and by redesignating subparagraphs (B) through (F) as 
        subparagraphs (A) through (E), respectively.
            (70) Section 874 is amended by striking subsection (b) and 
        by redesignating subsection (c) as subsection (b).
            (71) Section 891 is amended by striking ``under section 151 
        and''.
            (72) Section 904(b)(1) is amended to read as follows:
            ``(1) Deduction for estates and trusts.--For purposes of 
        subsection (a), the taxable income of an estate or trust shall 
        be computed without any deduction under section 642(b).''.
            (73) Section 931(b)(1) is amended to read as follows:
            ``(1) any deduction from gross income, or''.
            (74) Section 933 is amended--
                    (A) by striking ``as a deduction from his gross 
                income any deductions (other than the deduction under 
                section 151, relating to personal exemptions)'' in 
                paragraph (1) and inserting ``any deduction from gross 
                income'', and
                    (B) by striking ``as a deduction from his gross 
                income any deductions (other than the deduction for 
                personal exemptions under section 151)'' in paragraph 
                (2) and inserting ``any deduction from gross income''.
            (75) Section 1212(b)(2)(B)(ii) is amended to read as 
        follows:
                            ``(ii) in the case of an estate or trust, 
                        the deduction allowed for such year under 
                        section 642(b).''.
            (76) Section 1361(c)(1)(C) is amended by striking ``section 
        152(f)(1)(C)'' and inserting ``section 7706(f)(1)(C)''.
            (77) Section 1402(a) is amended by striking paragraph (7).
            (78) Section 2032A(c)(7)(D) is amended by striking 
        ``section 152(f)(2)'' and inserting ``section 7706(f)(2)''.
            (79) Section 3402(m)(1) is amended by striking ``other than 
        the deductions referred to in section 151 and''.
            (80) Section 3402(r)(2) is amended by striking ``the sum 
        of--'' and all that follows and inserting ``the basic standard 
        deduction (as defined in section 63(c)) for an individual to 
        whom section 63(c)(2)(C) applies.''.
            (81) Section 5000A(b)(3)(A) is amended by striking 
        ``section 152'' and inserting ``section 7706''.
            (82) Section 5000A(c)(4)(A) is amended by striking ``the 
        number of individuals for whom the taxpayer is allowed a 
        deduction under section 151 (relating to allowance of deduction 
        for personal exemptions) for the taxable year'' and inserting 
        ``the sum of 1 (2 in the case of a joint return) plus the 
        number of the taxpayer's dependents for the taxable year''.
            (83) Section 6013(b)(3)(A) is amended--
                    (A) by striking ``had less than the exemption 
                amount of gross income'' in clause (ii) and inserting 
                ``had no gross income'',
                    (B) by striking ``had gross income of the exemption 
                amount or more'' in clause (iii) and inserting ``had 
                any gross income'', and
                    (C) by striking the flush language following clause 
                (iii).
            (84) Section 6014(a) is amended by striking ``section 
        6012(a)(1)(C)(i)'' and inserting ``section 
        6012(a)(1)(B)(iii)''.
            (85) Section 6014(b)(4) is amended by striking ``63(c)(5)'' 
        and inserting ``63(c)(4)''.
            (86) Section 6103(l)(21)(A)(iii) is amended to read as 
        follows:
                            ``(iii) the number of the taxpayer's 
                        dependents,''.
            (87) Section 6213(g)(2)(H) is amended by striking ``section 
        21 (relating to expenses for household and dependent care 
        services necessary for gainful employment) or section 151 
        (relating to allowance of deductions for personal exemptions)'' 
        and inserting ``subsection (a)(1)(B), (b)(1)(A)(ii), or 
        (b)(1)(B) of section 2 or section 21, 35(d)(1)(B), 
        36B(b)(3)(B), or 63(f)(2)(B)''.
            (88) Section 6334(d) is amended--
                    (A) by amending paragraph (2) to read as follows:
            ``(2) Exempt amount.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the term `exempt amount' means an amount equal to--
                            ``(i) the sum of the amount determined 
                        under subparagraph (B) and the standard 
                        deduction, divided by
                            ``(ii) 52.
                    ``(B) Amount determined.--For purposes of 
                subparagraph (A), the amount determined under this 
                subparagraph is--
                            ``(i) the dollar amount in effect under 
                        section 7706(d)(1)(B), multiplied by
                            ``(ii) the number of the taxpayer's 
                        dependents for the taxable year in which the 
                        levy occurs.
                    ``(C) Verified statement.--Unless the taxpayer 
                submits to the Secretary a written and properly 
                verified statement specifying the facts necessary to 
                determine the proper amount under subparagraph (A), 
                subparagraph (A) shall be applied as if the taxpayer 
                were a married individual filing a separate return with 
                no dependents.'', and
                    (B) by striking paragraph (4).
            (89) Section 7702B(f)(2)(C)(iii) is amended by striking 
        ``section 152(d)(2)'' and inserting ``section 7706(d)(2)''.
            (90) Section 7703(a) is amended by striking ``part V of 
        subchapter B of chapter 1 and''.
            (91) Section 7703(b)(1) is amended by striking ``section 
        152(f)(1))'' and all that follows and inserting ``section 
        7706(f)(1)) who is a dependent of such individual for the 
        taxable year (or would be but for section 7706(e)),''.
            (92) Section 7706(a), as redesignated by this section, is 
        amended by striking ``this subtitle'' and inserting ``subtitle 
        A''.
            (93)(A) Section 7706(d)(1)(B), as redesignated by this 
        section, is amended by striking ``the exemption amount (as 
        defined in section 151(d))'' and inserting ``$4,150''.
            (B) Section 7706(d), as redesignated by this section, is 
        amended by adding at the end the following new paragraph:
            ``(6) Inflation adjustment.--In the case of any taxable 
        year beginning in a calendar year beginning after 2018, the 
        $4,150 amount in paragraph (1)(B) shall be increased by an 
        amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(c)(2)(A) for the calendar year in which 
                such taxable year begins, determined by substituting 
                `calendar year 2017' for `calendar year 2016' in clause 
                (ii) thereof.
        If any increase determined under the preceding sentence is not 
        a multiple of $50, such increase shall be rounded to the next 
        lowest multiple of $50.''.
            (94) Section 7706(e)(3), as redesignated by this section, 
        is amended by inserting ``(as in effect before its repeal)'' 
        after ``section 151''.
            (95) Section 7706(f)(6)(B), as redesignated by this 
        section, is amended by striking clause (i) and designating 
        clauses (ii), (iii), and (iv) as clauses (i), (ii), and (iii), 
        respectively.
            (96) The table of parts for subchapter B of chapter 1 is 
        amended by striking the item relating to part V.
            (97) The table of sections for chapter 79 is amended by 
        adding at the end the following new item:

``Sec. 7706. Dependent defined.''.
    (g) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2017.

SEC. 142. LIMITATION ON DEDUCTION FOR STATE AND LOCAL, ETC. TAXES.

    (a) In General.--Section 164(b)(6) is amended by striking all that 
precedes ``The preceding sentence'' and inserting the following:
            ``(6) Limitation on individual deductions.--In the case of 
        an individual--
                    ``(A) no deduction shall be allowed under this 
                chapter for foreign real property taxes paid or accrued 
                during the taxable year, and
                    ``(B) the aggregate amount of the deduction allowed 
                under this chapter for taxes described in paragraphs 
                (1), (2), and (3) of subsection (a) and paragraph (5) 
                of this subsection paid or accrued by the taxpayer 
                during the taxable year shall not exceed $10,000 
                ($5,000 in the case of a married individual filing a 
                separate return).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2017.

SEC. 143. LIMITATION ON DEDUCTION FOR QUALIFIED RESIDENCE INTEREST.

    (a) Interest on Home Equity Indebtedness.--Section 163(h)(3)(A) is 
amended by striking ``during the taxable year on'' and all that follows 
through ``residence of the taxpayer.'' and inserting ``during the 
taxable year on acquisition indebtedness with respect to any qualified 
residence of the taxpayer.''.
    (b) Limitation on Acquisition Indebtedness.--Section 
163(h)(3)(B)(ii) is amended to read as follows:
                            ``(ii) Limitation.--The aggregate amount 
                        treated as acquisition indebtedness for any 
                        period shall not exceed the excess (if any) 
                        of--
                                    ``(I) $750,00 ($375,000, in the 
                                case of a married individual filing a 
                                separate return), over
                                    ``(II) the sum of the aggregate 
                                outstanding pre-October 13, 1987, 
                                indebtedness (as defined in 
                                subparagraph (D)) plus the aggregate 
                                outstanding pre-December 15, 2017, 
                                indebtedness (as defined in 
                                subparagraph (C)).''.
    (c) Treatment of Indebtedness Incurred on or Before December 15, 
2017.--Section 163(h)(3)(C) is amended to read as follows:
                    ``(C) Treatment of indebtedness incurred on or 
                before december 15, 2017.--
                            ``(i) In general.--In the case of any pre-
                        December 15, 2017, indebtedness, subparagraph 
                        (B)(ii) shall not apply and the aggregate 
                        amount of such indebtedness treated as 
                        acquisition indebtedness for any period shall 
                        not exceed the excess (if any) of--
                                    ``(I) $1,000,000 ($500,000, in the 
                                case of a married individual filing a 
                                separate return), over
                                    ``(II) the aggregate outstanding 
                                pre-October 13, 1987, indebtedness (as 
                                defined in subparagraph (D)).
                            ``(ii) Pre-december 15, 2017, 
                        indebtedness.--For purposes of this 
                        subparagraph--
                                    ``(I) In general.--The term `pre-
                                December 15, 2017, indebtedness' means 
                                indebtedness (other than pre-October 
                                13, 1987, indebtedness) incurred on or 
                                before December 15, 2017.
                                    ``(II) Binding written contract 
                                exception.--In the case of a taxpayer 
                                who enters into a written binding 
                                contract before December 15, 2017, to 
                                close on the purchase of a principal 
                                residence before January 1, 2018, and 
                                who purchases such residence before 
                                April 1, 2018, the term `pre-December 
                                15, 2017, indebtedness' shall include 
                                indebtedness secured by such residence.
                            ``(iii) Refinancing indebtedness.--
                                    ``(I) In general.--In the case of 
                                any indebtedness which is incurred to 
                                refinance indebtedness, such refinanced 
                                indebtedness shall be treated for 
                                purposes of this subparagraph as 
                                incurred on the date that the original 
                                indebtedness was incurred to the extent 
                                the amount of the indebtedness 
                                resulting from such refinancing does 
                                not exceed the amount of the refinanced 
                                indebtedness.
                                    ``(II) Limitation on period of 
                                refinancing.--Subclause (I) shall not 
                                apply to any indebtedness after the 
                                expiration of the term of the original 
                                indebtedness or, if the principal of 
                                such original indebtedness is not 
                                amortized over its term, the expiration 
                                of the term of the 1st refinancing of 
                                such indebtedness (or if earlier, the 
                                date which is 30 years after the date 
                                of such 1st refinancing).''.
    (d) Coordination With Treatment of Indebtedness Incurred on or 
Before October 13, 1987.--Section 163(h)(3)(D) is amended--
            (1) by striking clause (ii) and redesignating clauses (iii) 
        and (iv) as clauses (ii) and (iii), respectively, and
            (2) in clause (iii) (as so redesignated)--
                    (A) by striking ``clause (iii)'' in the matter 
                preceding subclause (I) and inserting ``clause (ii)'', 
                and
                    (B) by striking ``clause (iii)(I)'' in subclauses 
                (I) and (II) and inserting ``clause (ii)(I)''.
    (e) Coordination With Exclusion of Income From Discharge of 
Indebtedness.--Section 108(h)(2) is amended by striking ``$1,000,000 
($500,000'' and inserting ``$750,000 ($375,000''.
    (f) Conforming Amendment.--Section 163(h)(3) is amended by striking 
subparagraph (F).
    (g) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2017.

SEC. 144. MODIFICATION OF DEDUCTION FOR PERSONAL CASUALTY LOSSES.

    (a) In General.--Section 165(h)(5)(A) is amended by striking ``in a 
taxable year beginning after December 31, 2017, and before January 1, 
2026,''.
    (b) Conforming Amendments.--
            (1) Section 165(h)(5)(B) is amended by striking ``for any 
        taxable year to which subparagraph (A) applies''.
            (2) Section 165(h)(5) is amended by striking ``for taxable 
        years 2018 through 2025'' in the heading thereof and inserting 
        ``to losses attributable to federally declared disasters''.
    (c) Effective Date.--The amendments made by this section shall 
apply to losses sustained in taxable years beginning after December 31, 
2017.

SEC. 145. TERMINATION OF MISCELLANEOUS ITEMIZED DEDUCTIONS.

    (a) In General.--Section 67 is amended--
            (1) by amending subsection (a) to read as follows:
    ``(a) In General.--In the case of an individual, miscellaneous 
itemized deductions shall not be allowed.'', and
            (2) by striking subsection (g).
    (b) Movement of Definition of Adjusted Gross Income for Estates and 
Trusts.--
            (1) Section 67 is amended by striking subsection (e).
            (2) Section 641 is amended by adding at the end the 
        following new subsection:
    ``(d) Computation of Adjusted Gross Income.--For purposes of this 
title, the adjusted gross income of an estate or trust shall be 
computed in the same manner as in the case of an individual, except 
that--
            ``(1) the deductions for costs which are paid or incurred 
        in connection with the administration of the estate or trust 
        and which would not have been incurred if the property were not 
        held in such trust or estate, and
            ``(2) the deductions allowable under sections 642(b), 651, 
        and 661,
shall be treated as allowable in arriving at adjusted gross income.''.
    (c) Conforming Amendments.--
            (1) Section 56(b)(1)(A) is amended to read as follows:
                    ``(A) Certain taxes.--No deduction (other than a 
                deduction allowable in computing adjusted gross income) 
                shall be allowed for any taxes described in paragraph 
                (1), (2), or (3) of section 164(a) or clause (ii) of 
                section 164(b)(5)(A).''.
            (2) Section 56(b)(1)(C), as amended by the preceding 
        provisions of this Act, is amended by striking ``subparagraph 
        (A)(ii)'' and inserting ``subparagraph (A)''.
            (3) Section 62(a) is amended by striking ``subtitle'' in 
        the matter preceding paragraph (1) and inserting ``title''.
            (4) Section 641(c)(2)(E) is amended to read as follows:
                    ``(E) Section 642(c) shall not apply.''.
            (5) Section 1411(a)(2) is amended by striking ``(as defined 
        in section 67(e))''.
            (6) Section 6654(d)(1)(C) is amended by striking clause 
        (iii).
            (7) Section 67 is amended in the heading, by striking ``2-
        percent floor on'' and inserting ``denial of''.
            (8) The table of sections for part 1 of subchapter B of 
        chapter 1 is amended by striking the item relating to section 
        67 and inserting the following new item:

``Sec. 67. Denial of miscellaneous itemized deductions.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2017.

SEC. 146. REPEAL OF OVERALL LIMITATION ON ITEMIZED DEDUCTIONS.

    (a) In General.--Part 1 of subchapter B of chapter 1 is amended by 
striking section 68 (and the item relating to such section in the table 
of sections for such part).
    (b) Conforming Amendments.--
            (1) Section 1(f)(7)(A), as amended by sections 121 and 141, 
        is amended by striking ``or section 68(b)(2)''.
            (2) Section 56(b)(1), as amended by the preceding 
        provisions of this Act, is amended by striking subparagraph 
        (E).
            (3) Section 164(b)(5)(H)(ii)(III) is amended by striking 
        ``(as determined under section 68(b))''.
            (4) Section 164(b)(5)(H) is amended by adding at the end 
        the following new clause:
                            ``(iii) Applicable amount defined.--For 
                        purposes of clause (ii), the term `applicable 
                        amount' means--
                                    ``(I) $300,000 in the case of a 
                                joint return or a surviving spouse,
                                    ``(II) $275,000 in the case of a 
                                head of household,
                                    ``(III) $250,000 in the case of an 
                                individual who is not married and who 
                                is not a surviving spouse or head of 
                                household, and
                                    ``(IV) \1/2\ the amount applicable 
                                under subclause (I) in the case of a 
                                married individual filing a separate 
                                return.
                        For purposes of this paragraph, marital status 
                        shall be determined under section 7703. In the 
                        case of any taxable year beginning in calendar 
                        years after 2017, each of the dollar amounts in 
                        this clause shall be increased by an amount 
                        equal to such dollar amount, multiplied by the 
                        cost-of-living adjustment determined under 
                        section 1(f)(3) for the calendar year in which 
                        the taxable year begins, determined by 
                        substituting `2012' for `2016' in subparagraph 
                        (A)(ii) thereof. If any amount after adjustment 
                        under the preceding sentence is not a multiple 
                        of $50, such amount shall be rounded to the 
                        next lowest multiple of $50.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2017.

SEC. 147. TERMINATION OF EXCLUSION FOR QUALIFIED BICYCLE COMMUTING 
              REIMBURSEMENT.

    (a) In General.--Section 132(f)(1) is amended by striking 
subparagraph (D).
    (b) Conforming Amendments.--
            (1) Section 132(f)(2) is amended by adding ``and'' at the 
        end of subparagraph (A), striking ``, and'' at the end of 
        subparagraph (B) and inserting a period, and striking 
        subparagraph (C).
            (2) Section 132(f)(4) is amended by striking ``(other than 
        a qualified bicycle commuting reimbursement)''.
            (3) Section 132(f) is amended by striking paragraph (8).
            (4) Section 274(l)(2) is amended by striking ``after 
        December 31, 2017, and before January 1, 2026''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2017.

SEC. 148. QUALIFIED MOVING EXPENSE REIMBURSEMENT EXCLUSION LIMITED TO 
              MEMBERS OF ARMED FORCES.

    (a) In General.--Section 132(g) is amended--
            (1) by striking ``by an individual'' in paragraph (1) and 
        inserting ``by a qualified military individual'', and
            (2) by striking paragraph (2) and inserting the following 
        new paragraph:
            ``(2) Qualified military individual.--For purposes of this 
        subsection, the term `qualified military individual' means a 
        member of the Armed Forces of the United States on active duty 
        who moves pursuant to a military order and incident to a 
        permanent change of station.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2017.

SEC. 149. DEDUCTION FOR MOVING EXPENSES LIMITED TO MEMBERS OF ARMED 
              FORCES.

    (a) In General.--Section 217 is amended--
            (1) by amending subsection (a) to read as follows:
    ``(a) Deduction Allowed.--There shall be allowed as a deduction 
moving expenses paid or incurred during the taxable year by a member of 
the Armed Forces of the United States on active duty who moves pursuant 
to a military order and incident to a permanent change of station.'',
            (2) by striking subsections (c), (d), (f), and (g) and 
        redesignating subsections (h), (i), (j), and (k) as subsections 
        (c), (d), (f) and (g), respectively, and
            (3) by inserting after subsection (d), as so redesignated, 
        the following new subsection:
    ``(e) Expenses Furnished in Kind.--Any moving and storage expenses 
which are furnished in kind (or for which reimbursement or an allowance 
is provided, but only to the extent of the expenses paid or incurred)--
            ``(1) to such member, his spouse, or his dependents, shall 
        not be includible in gross income, and no reporting with 
        respect to such expenses shall be required by the Secretary of 
        Defense or the Secretary of Transportation, as the case may be, 
        and
            ``(2) to such member's spouse and his dependents with 
        regard to moving to a location other than the one to which such 
        member moves (or from a location other than the one from which 
        such member moves), this section shall apply with respect to 
        the moving expenses of his spouse and dependents as if his 
        spouse commenced work as an employee at a new principal place 
        of work at such location.''.
    (b) Conforming Amendments.--
            (1) Subsections (d)(3)(C) and (e) of section 23 are each 
        amended by striking ``section 217(h)(3)'' and inserting 
        ``section 217(c)(3)''.
            (2) Section 7872(f) is amended by striking paragraph (11).
            (3) Section 217 is amended in the heading by striking 
        ``moving expenses'' and inserting ``certain moving expenses of 
        members of armed forces''.
            (4) The table of sections for part VII of subchapter B of 
        chapter 1 is amended by striking the item relating to section 
        217 and inserting the following new item:

``Sec. 217. Certain moving expenses of members of Armed Forces.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2017.

SEC. 150. LIMITATION ON WAGERING LOSSES.

    (a) In General.--Section 165(d) is amended by striking ``in the 
case of taxable years beginning after December 31, 2017, and before 
January 1, 2026,''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2017.

         Subtitle F--Increase in Estate and Gift Tax Exemption

SEC. 151. INCREASE IN ESTATE AND GIFT TAX EXEMPTION.

    (a) In General.--Section 2010(c)(3) is amended in subparagraph (A), 
by striking ``$5,000,000'' and inserting ``$10,000,000''.
    (b) Conforming Amendments.--
            (1) Section 2001(g) is amended to read as follows:
    ``(g) Modifications to Gift Tax Payable to Reflect Different Tax 
Rates.--For purposes of applying subsection (b)(2) with respect to 1 or 
more gifts, the rates of tax under subsection (c) in effect at the 
decedent's death shall, in lieu of the rates of tax in effect at the 
time of such gifts, be used both to compute--
            ``(1) the tax imposed by chapter 12 with respect to such 
        gifts, and
            ``(2) the credit allowed against such tax under section 
        2505, including in computing--
                    ``(A) the applicable credit amount under section 
                2505(a)(1), and
                    ``(B) the sum of the amounts allowed as a credit 
                for all preceding periods under section 2505(a)(2).''.
            (2) Section 2010(c)(3) is amended by striking subparagraph 
        (C).
    (c) Effective Date.--The amendments made by this section shall 
apply to estates of decedents dying and gifts made after December 31, 
2017.

    TITLE II--INCREASED EXEMPTION FOR ALTERNATIVE MINIMUM TAX MADE 
                               PERMANENT

SEC. 201. INCREASED EXEMPTION FOR INDIVIDUALS.

    (a) In General.--Section 55(d)(1) is amended--
            (1) by striking ``$78,750'' in subparagraph (A) and 
        inserting ``$109,400'', and
            (2) by striking ``$50,600'' in subparagraph (B) and 
        inserting ``$70,300''.
    (b) Phase-out of Exemption Amount.--Section 55(d)(2) is amended--
            (1) by striking ``$150,000'' in subparagraph (A) and 
        inserting ``$1,000,000'', and
            (2) by striking subparagraphs (B) and (C) and by inserting 
        the following new subparagraphs:
                    ``(B) 50 percent of the dollar amount applicable 
                under subparagraph (A) in the case of a taxpayer 
                described in paragraph (1)(B) or (1)(C), and
                    ``(C) $75,000 in the case of a taxpayer described 
                in paragraph (1)(D).'',
    (c) Inflation Adjustment.--Section 55(d)(3) is amended to read as 
follows:
            ``(3) Inflation adjustment.--In the case of any taxable 
        year beginning in a calendar year after 2018, each dollar 
        amount described in clause (i) or (ii) of subparagraph (B) 
        shall be increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, determined by substituting--
                            ``(i) in the case of a dollar amount 
                        contained in paragraph (1)(D) or (2)(C) or in 
                        subsection (b)(1)(A), `calendar year 2011' for 
                        `calendar year 2016' in subparagraph (A)(ii) 
                        thereof, and
                            ``(ii) in the case of a dollar amount 
                        contained in paragraph (1)(A), (1)(B), or 
                        (2)(A), `calendar year 2017' for `calendar year 
                        2016' in subparagraph (A)(ii) thereof.
        Any increased amount determined under this paragraph shall be 
        rounded to the nearest multiple of $100 ($50 in the case of the 
        dollar amount contained in paragraph (2)(C)).''.
    (d) Conforming Amendment.--Section 55(d) is amended by striking 
paragraph (4).
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2017.

                      TITLE III--BUDGETARY EFFECTS

SEC. 301. BUDGETARY EFFECTS.

    (a) Statutory PAYGO Scorecards.--The budgetary effects of this Act 
shall not be entered on either PAYGO scorecard maintained pursuant to 
section 4(d) of the Statutory Pay-As-You-Go Act of 2010.
    (b) Senate PAYGO Scorecards.--The budgetary effects of this Act 
shall not be entered on any PAYGO scorecard maintained for purposes of 
section 4106 of H. Con. Res. 71 (115th Congress).

            Passed the House of Representatives September 28, 2018.

            Attest:

                                                                 Clerk.
115th CONGRESS

  2d Session

                               H. R. 6760

_______________________________________________________________________

                                 AN ACT

 To amend the Internal Revenue Code of 1986 to make permanent certain 
    provisions of the Tax Cuts and Jobs Act affecting individuals, 
                    families, and small businesses.