Investment Expense Deduction Act of 1991

Investment Expense Deduction Act of 1991 - Amends the Internal Revenue Code to modify the computation of alternative minimum tax with respect to itemized deductions and net investment income from partnerships.

Requires the issuer of an interest in a corporation to determine or classify whether such interest is to be treated as stock or indebtedness (or as in part stock and in part indebtedness). Provides that such determination is binding on all successors to such interest.

 
HR 4001 IH
102d CONGRESS
1st Session
 H. R. 4001
To amend the Internal Revenue Code of 1986 to modify the individual
alternative minimum tax to allow for the deduction of certain investment
expenses, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
November 26, 1991
Mr. MCGRATH (for himself and Mr. JENKINS) 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 modify the individual
alternative minimum tax to allow for the deduction of certain investment
expenses, 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. SHORT TITLE, ETC.
  (a) SHORT TITLE- This Act may be cited as the `Investment Expense Deduction
  Act of 1991'.
  (b) AMENDMENT OF 1986 CODE- Except as otherwise expressly provided,
  whenever in this Act an amendment or repeal is expressed in terms of an
  amendment to, or repeal of, a section or other provision, the reference
  shall be considered to be made to a section or other provision of the
  Internal Revenue Code of 1986.
SEC. 2. MODIFICATION TO COMPUTATION OF ALTERNATIVE MINIMUM TAX.
  Subparagraph (A) of section 56(b)(1) (relating to limitation on itemized
  deductions) is amended by inserting before the last sentence thereof
  the following: `Clause (i) shall not apply to the amount of a taxpayer's
  itemized deductions under section 212 (relating to expenses for production
  of income) which does not exceed the taxpayer's net investment income for
  the taxable year from partnerships in which the taxpayer is a partner,
  but only to the extent this amount exceeds 2 percent of the taxpayer's
  adjusted gross income.'
SEC. 3. CLASSIFICATION OF CERTAIN INTERESTS IN CORPORATIONS AS STOCK OR
INDEBTEDNESS.
  Section 385 is amended by adding the following subsection at the end thereof:
  `(c) All determinations or classifications of whether an interest in a
  corporation is treated for purposes of this title as stock or indebtedness
  (or as in part stock and in part indebtedness), whether under regulations
  issued pursuant to this section, by judicial decision or otherwise, must
  be made only in connection with such interest in the hands of the issuer
  thereof. Such determination or classification is binding on the initial
  holder of the interest and all successors in interest thereto.'
SEC. 4. EFFECTIVE DATE.
  The amendments made by this Act shall apply to all taxable years beginning
  after December 31, 1991.