[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1186 Introduced in House (IH)]
109th CONGRESS
1st Session
H. R. 1186
To amend the Internal Revenue Code of 1986 to repeal the alternative
minimum tax.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 9, 2005
Mr. English of Pennsylvania (for himself, Mr. McCrery, Mr. Hulshof, Mr.
Culberson, Mr. Simmons, Mr. McCaul of Texas, Mr. Shaw, Mr. Gillmor, Mr.
King of New York, Mr. Fossella, Mr. Hostettler, Mr. Baker, Mr. Paul,
Mr. Beauprez, Mr. Norwood, Ms. Hart, Mr. Sensenbrenner, and Mr. Sam
Johnson of Texas) 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 repeal the alternative
minimum tax.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.
(a) Short Title.--This Act may be cited as the ``Alternative
Minimum Tax Repeal Act of 2005''.
(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. ALTERNATIVE MINIMUM TAX.
(a) In General.--Part VI of subchapter A of chapter 1 (relating to
alternative minimum tax) is hereby repealed.
(b) Use of Credit for Prior Year Minimum Tax Liability.--Subsection
(c) of section 53 is amended to read as follows:
``(c) Limitations.--The credit allowable under subsection (a) for
any taxable year shall not exceed 90 percent of the regular tax
liability of the taxpayer for such taxable year reduced by the sum of
the credits allowable under subparts A, B, D, E, and F of this part.''.
(c) Conforming Amendments.--
(1) Subparagraph (B) of section 1(g)(7) (relating to
election to claim certain unearned income of child on parent's
return) is amended--
(A) by inserting ``and'' at the end of clause (i),
(B) by striking ``and'' at the end of clause (ii)
and inserting a period, and
(C) by striking clause (iii).
(2) Subsection (d) of section 2 (relating to taxes imposed
on nonresident aliens) is amended by striking ``sections 1 and
55'' and inserting ``section 1''.
(3) Subsection (a) of section 5 (relating to cross
references relating to tax on individuals) is amended by
striking paragraph (4).
(4) Subsection (d) of section 11 (relating to taxes imposed
on foreign corporations) is amended by striking ``the taxes
imposed by subsection (a) and section 55'' and inserting ``the
tax imposed by subsection (a)''.
(5) Section 12 (relating to cross references relating to
tax on corporations) is amended by striking paragraph (7).
(6) Subsection (b)(4) of section 23 (relating to adoption
expenses) is amended by striking ``plus the tax imposed by
section 55''.
(7) Subsection (b)(3) of section 24 (relating to child tax
credit) is amended by striking ``plus the tax imposed by
section 55''.
(8) Section 25(g)(1) (relating to limitation based on
amount of tax) is amended by striking ``plus the tax imposed by
section 55''.
(9) Section 26 (relating to limitation based on tax
liability; definition of tax liability) is amended--
(A) by amending subsection (a) to read as follows:
``(a) Limitation Based on Amount of Tax.--The aggregate amount of
credits allowed by this subpart (other than sections 23, 24, and 25B)
for the taxable year shall not exceed the taxpayer's regular tax
liability for the taxable year.'',
(B) in subsection (b)(2), by striking subparagraph
(A) and by redesignating subparagraphs (B) through (S)
as subparagraphs (A) through (R), respectively, and
(C) by striking subsection (c).
(10) Paragraph (6) of section 29(b) (relating to credit for
producing fuel from a nonconventional source) is amended
striking ``the excess'' and all that follows and inserting
``the regular tax for the taxable year reduced by the sum of
the credits allowable under subpart A and section 27.''
(11) Paragraph (3) of section 30(b) (relating to credit for
qualified electric vehicles) is amended by striking ``the
excess'' and all that follows and inserting ``the regular tax
for the taxable year reduced by the sum of the credits
allowable under subpart A and sections 27 and 29.''
(12) Subsection (c) of section 38 (relating to general
business credit) is amended--
(A) by amending paragraph (1) to read as follows:
``(1) In general.--The credit allowed under subsection (a)
for any taxable year shall not exceed the excess (if any) of--
``(A) the taxpayer's net regular tax liability,
over
``(B) 25 percent of so much of the taxpayer's net
regular tax liability as exceeds $25,000.
For purposes of the preceding sentence, the term `net regular
tax liability' means the regular tax liability reduced by the
sum of the credits allowable under subparts A and B of this
part.'',
(B) in paragraph (2)(A)(ii) by striking ``credit--
'' and all that follows and inserting ``credit, the
limitation under paragraph (1) shall be reduced by the
credit allowed under subsection (a) for the taxable
year (other than the empowerment zone employment credit
or the New York Liberty Zone business employee
credit).'',
(C) in paragraph (3)(A)(ii) by striking ``credit--
'' and all that follows and inserting ``credit, the
limitation under paragraph (1) shall be reduced by the
credit allowed under subsection (a) for the taxable
year (other than the New York Liberty Zone business
employee credit).'',
(D) in paragraph (4)(A)(ii) by striking ``credits--
'' and all that follows and inserting ``credits, the
limitation under paragraph (1) (as modified by
subclause (I)) shall be reduced by the credit allowed
under subsection (a) for the taxable year (other than
the specified credits).''.
(13) Section 40(g)(6)(B)(iii)(II) is amended by striking ``
or for purposes of section 55''.
(14) Paragraph (4) of section 45A(d) (relating to Indian
employment credit) is amended by striking ``for purposes'' and
all that follows and inserting ``for purposes of determining
the amount of any credit allowable under this chapter.''.
(15) Subparagraph (B) of section 45D(g)(4) (relating to new
markets tax credit) is amended by striking ``or for purposes of
section 55''.
(16) Subparagraph (B) of section 45F(d)(4) (relating to
employer-provided child care credit) is amended by striking
``or for purposes of section 55''.
(17) Subparagraph (B) of section 45H(g)(3) (relating to
credit for production of low sulfur diesel fuel) is amended by
striking ``or for purposes of section 55''.
(18) Subsection (d) of section 53 (relating to credit for
prior year minimum tax liability) is amended to read as
follows:
``(d) Definitions.--For purposes of this section--
``(1) Net minimum tax.--The term `net minimum tax' means
the tax imposed by section 55.
``(2) Credit not allowed for exclusion preferences.--
``(A) Adjusted net minimum tax.--Except as provided
in subparagraph (C), the adjusted net minimum tax for
any taxable year is--
``(i) the amount of the net minimum tax for
such taxable year, reduced by
``(ii) the amount which would be the net
minimum tax for such taxable year if the only
adjustments and items of tax preference taken
into account were those specified in
subparagraph (B) and if section 59(a)(2) did
not apply.
``(B) Specified items.--The following are specified
in this subparagraph--
``(i) the adjustments provided for in
subsection (b)(1) of section 56, and
``(ii) the items of tax preference
described in paragraphs (1), (5) and (7) of
section 57(a).
``(C) Credit allowable for exclusion preferences of
corporations.--In the case of a corporation, the
adjusted net minimum tax for any taxable year is the
amount of the net minimum tax for such year.
``(3) Treatment of references.--For purposes of this
subsection, references to sections 55, 56, 57, and 59 shall be
treated as references to such sections as in effect on the day
before the date of the enactment of the Alternative Minimum Tax
Repeal Act of 2005.''.
(19) Subsection (b) of section 59A (relating to
environmental tax) is amended by adding at the end the
following:
``For purposes of this subsection, references to sections 55 and 56
shall be treated as references to such sections as in effect on the day
before the date of the enactment of the Alternative Minimum Tax Repeal
Act of 2005.''.
(20)(A) Paragraph (2) of section 148(b) (relating to higher
yield investments) is amended by adding at the end the
following new flush sentence:
``Such term shall not include any tax-exempt bond.''
(B) Paragraph (3) of section 148(b) is hereby repealed.
(21) Subparagraph (B) of section 149(g)(3) (relating to
hedge bonds) is amended--
(A) in the heading, by striking ``bonds not subject
to minimum tax.--'' and inserting ``bonds.--'', and
(B) by striking all that follows ``invested in
bonds'' and inserting ``the interest on which is not
includible in gross income under section 103.''
(22) Subsection (j) of section 168 (relating to accelerated
cost recovery system) is amended by striking paragraph (3).
(23) Paragraph (2) of section 168(k) (relating to special
allowance for certain property acquired after September 10,
2001, and before January 1, 2005) is amended by striking
subparagraph (G).
(24) Section 173 (relating to circulation expenditures) is
amended by striking ``(a) General Rule.--'' and by striking
subsection (b).
(25) Subsection (f) of section 174 (relating to research
and experimental expenditures) is amended to read as follows:
``(f) Cross Reference.--For adjustments to basis of property for
amounts allowed as deductions as deferred expenses under subsection
(b), see section 1016(a)(14).''.
(26) Section 199(d) (relating to income attributable to
domestic production activities) is amended by striking
paragraph (6) and redesignating paragraph (7) as paragraph (6).
(27) Subsection (c) of section 263 (relating to capital
expenditures) is amended by striking ``59(e) or''.
(28) Subsection (c) of section 263A (relating to
capitalization and inclusion in inventory costs of certain
expenses) is amended by striking paragraph (6).
(29) Section 382(l) (relating to limitation on net
operating loss carryforwards and certain built-in losses
following ownership change) is amended by striking paragraph
(7) and by redesignating paragraph (8) as paragraph (7).
(30) Section 443 (relating to returns for a period of less
than 12 months) is amended by striking subsection (d) and by
redesignating subsection (e) as subsection (d).
(31) Section 616 (relating to development expenditures) is
amended by striking subsection (e).
(32) Section 617 (relating to deduction and recapture of
certain mining exploration expenditures) is amended by striking
subsection (i).
(33) Subsection (c) of section 641 (relating to imposition
of tax) is amended--
(A) in paragraph (2) by striking subparagraph (B)
and redesignating subparagraphs (C) and (D) as
subparagraphs (B) and (C), respectively, and
(B) in paragraph (3), by striking ``paragraph
(2)(C)'' and inserting ``paragraph (2)(B)''.
(34) Subsections (b) and (c) of section 666 (relating to
accumulation distribution allocated to preceding years) are
each amended by striking ``(other than the tax imposed by
section 55)''.
(35)(A) Subsection (a) of section 772 (relating to
simplified flow-through) is amended by striking paragraph (5)
and redesignating paragraphs (6), (7), (8), (9), (10), and (11)
as paragraphs (5), (6), (7), (8), (9), and (10), respectively.
(B) Subsection (c) of section 772 is amended--
(i) in paragraph (2), by striking ``paragraphs
(3)(A) and (5)(A)'' and inserting ``paragraph (3)(A)'',
(ii) by striking paragraph (5), and
(iii) by redesignating paragraph (6) as paragraph
(5), and in that paragraph by striking ``paragraph (6)
of subsection (a)'' and inserting ``paragraph (5) of
subsection (a)''.
(C) Subsection (d) of section 772 is amended--
(i) by striking paragraph (3) and redesignating
paragraphs (4), (5), and (6) as paragraphs (3), (4),
and (5), respectively, and
(ii) in subparagraph (A) of paragraph (3), as so
redesignated, by striking ``subsection (a)(11)'' and
inserting ``subsection (a)(10)''.
(36) Paragraph (2) of section 815(c) (relating to
distributions to shareholders from pre-1984 policyholders
surplus account) is amended by striking the last sentence.
(37) Section 847 (relating to special estimated tax
payments) is amended--
(A) in paragraph (9), by striking the last
sentence;
(B) in paragraph (10), by inserting ``and'' at the
end of subparagraph (A), by striking subparagraph (B),
and by redesignating subparagraph (C) as subparagraph
(B).
(38) Section 848 (relating to capitalization of certain
policy acquisition expenses) is amended by striking subsection
(i) and by redesignating subsection (j) as subsection (i).
(39) Subsection (a) of section 860E (relating to treatment
of income in excess of daily accruals on residual interests) is
amended by striking paragraph (4).
(40) Section 860J (relating to non-FASIT losses not to
offset certain FASIT inclusions) is amended by striking
subsection (c) and redesignating subsection (d) as subsection
(c).
(41) Paragraph (1) of section 871(b) (relating to tax on
nonresident alien individuals) is amended by striking ``or
55''.
(42) Subsection (b) of section 877 (relating to
expatriation to avoid tax) is amended by striking ``or 55''.
(43) Paragraph (1) of section 882(a) (relating to tax on
income of foreign corporations connected with United States
business) is amended by striking ``55,''.
(44) Subsection (a) of section 897 (relating to disposition
of investment in United States real property) is amended to
read as follows:
``(a) Treatment as Effectively Connected With United States Trade
or Business.--For purposes of this title, gain or loss of a nonresident
alien individual or a foreign corporation from the disposition of a
United States real property interest shall be taken into account--
``(1) in the case of a nonresident alien individual, under
section 871(b)(1), or
``(2) in the case of a foreign corporation, under section
882(a)(1),
as if the taxpayer were engaged in a trade or business within the
United States during the taxable year and as if such gain or loss were
effectively connected with such trade or business.''.
(45) Subsection (k) of section 904 (relating to limitation
on credit) is amended to read as follows:
``(k) Cross Reference.--For increase of limitation under subsection
(a) for taxes paid with respect to amounts received which were included
in the gross income of the taxpayer for a prior taxable year as a
United States shareholder with respect to a controlled foreign
corporation, see section 960(b).''.
(46) Paragraph (1) of section 962(a) (relating to election
by individuals to be subject to tax at corporate rates) is
amended--
(A) by striking ``sections 1 and 55'' and inserting
``section 1'', and
(B) by striking ``sections 11 and 55'' and
inserting ``section 11''.
(47) Paragraph (1) of section 965(e) (relating to temporary
dividends received deduction) is amended by striking
``determining--'' and all that follows and inserting
``determining the amount of any credit allowable under this
chapter.''.
(48) Paragraph (20) of section 1016(a) (relating to
adjustments to basis) is amended by inserting ``, as in effect
on the day before the date of the enactment of the Alternative
Minimum Tax Repeal Act of 2005'' after ``preferences)''.
(49) Paragraph (4) of section 1260(b) (relating to gains
from constructive ownership transactions) is amended by
striking ``for purposes'' and all that follows and inserting
``for purposes of determining the amount of any credit
allowable under this chapter.''
(50) Paragraph (1) of section 1397E(c) (relating to credit
to holders of qualified zone academy bonds) is amended by
striking ``plus the tax imposed by section 55''.
(51) Subsection (f) of section 1400I (relating to
commercial revitalization deduction) is amended by striking
paragraph (4).
(52) Paragraph (2) of section 1400L(b) (relating to tax
benefits for New York Liberty Zone) is amended by striking
subparagraph (E).
(53) Subsection (a) of section 1561 (relating to
limitations on certain multiple tax benefits in the case of
certain controlled corporations) is amended by striking the
last sentence.
(54) Subparagraph (B) of section 6015(d)(2) (relating to
relief from joint and several liability on joint return) is
amended by striking ``or 55''.
(55) Subparagraph (A) of section 6425(c)(1) (defining
income tax liability) is amended--
(A) by inserting ``plus'' at the end of clause (i),
and
(B) by striking clause (ii) and redesignating
clause (iii) as clause (ii).
(56) Section 6654(d)(2) (relating to failure by individual
to pay estimated income tax) is amended--
(A) in clause (i) of subparagraph (B), by striking
``, alternative minimum taxable income,'', and
(B) in clause (i) of subparagraph (C), by striking
``, alternative minimum taxable income,''.
(57) Subparagraph (A) of section 6655(g)(1) (relating to
failure by corporation to pay estimated income tax) is
amended--
(A) by striking clause (ii), and
(B) by redesignating clauses (iii) and (iv) as
clauses (ii) and (iii), respectively.
(58) Subparagraph (C) of section 6662(e)(3) (relating to
imposition of accuracy-related penalty) is amended by inserting
``, as in effect on the day before the date of the enactment of
the Alternative Minimum Tax Repeal Act of 2005'' after
``55(c)''.
(59) Paragraph (3) of section 7874(e) (relating to rules
relating to expatriated entities and their foreign parents) is
amended to read as follows:
``(3) Coordination with section 172.--Rules similar to the
rules of section 860E(a)(3) shall apply for purposes of
subsection (a). ''.
(d) Clerical Amendment.--The table of parts for subchapter A of
chapter 1 is amended by striking the item relating to part VI.
(e) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2005.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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