Page:United States Statutes at Large Volume 100 Part 3.djvu/516

 100 STAT. 2324

PUBLIC LAW 99-514—OCT. 22, 1986

apply (in lieu of the treatment applicable for purposes of computing the regular tax): "(1) LIMITATION ON ITEMIZED DEDUCTIONS.—

"(A) IN GENERAL.—No deduction shall be allowed— "(i) for any miscellaneous itemized deduction (as defined in section 67(b)), or "(ii) for any taxes described in paragraph (1), (2), or (3) of section 164(a). Clause (ii) shall not apply to any amount allowable in computing adjusted gross income. "(B) MEDICAL EXPENSES.—In determining the amount allowable as a deduction under section 213, subsection (a) of section 213 shall be applied by substituting '10 percent' for "(C) INTEREST.—In determining the amount allowable as a deduction for interest, subsections (d) and (h) of section 163 shall apply, except that— "(i) in lieu of the exception under section 163(h)(2)(D), the term 'personal interest' shall not include any qualified housing interest (as defined in subsection (e)), "(ii) sections 163(d)(6) and 163(h)(6) (relating to phaseins) shall not apply, and "(iii) interest on any specified private activity bond (and any amount treated as interest on a specified activity bond under section 56(a)(5)(B)), and any deduction referred to in section 57(a)(5)(A), shall be treated as includible in gross income (or as deductible) for purposes of applying section 163(d). "(D) TREATMENT OF CERTAIN RECOVERIES.—No recovery of any tax to which subparagraph (A)(ii) applied shall be included in gross income for purposes of determining alternative minimum taxable income. "(E) STANDARD DEDUCTION NOT ALLOWED.—The standard deduction provided in section 63(c) shall not be allowed. "(2) CIRCULATION AND RESEARCH AND EXPERIMENTAL EXPENDITURES.—
 * 7.5 percent'.

"(A) IN GENERAL.—The amount allowable as a deduction under section 173 or 174(a) in computing the regular tax for amounts paid or incurred after December 31, 1986, shall be capitalized and— "(i) in the case of circulation expenditures described in section 173, shall be amortized ratably over the 3year period beginning with the taxable year in which the expenditures were made, or "(ii) in the case of research and experimental expenditures described in section 174(a), shall be amortized ratably over the 10-year period beginning with the taxable year in which the expenditures were made. "(B) Loss ALLOWED.—If a loss is sustained with respect to any property described in subparagraph (A), a deduction shall be allowed for the expenditures described in subparagraph (A) for the taxable year in which such loss is sustained in an amount equal to the lesser of— "(i) the amount allowable under section 165(a) for the expenditures if they had remained capitalized, or "(ii) the amount of such expenditures which have not previously been amortized under subparagraph (A).

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