Page:United States Statutes at Large Volume 117.djvu/778

 PUBLIC LAW 108–27—MAY 28, 2003

117 STAT. 759

(3) Paragraph (7) of section 57(a) is amended— (A) by striking ‘‘42 percent’’ the first place it appears and inserting ‘‘7 percent’’, and (B) by striking the last sentence. (c) TRANSITIONAL RULES FOR TAXABLE YEARS WHICH INCLUDE MAY 6, 2003.—For purposes of applying section 1(h) of the Internal Revenue Code of 1986 in the case of a taxable year which includes May 6, 2003— (1) The amount of tax determined under subparagraph (B) of section 1(h)(1) of such Code shall be the sum of— (A) 5 percent of the lesser of— (i) the net capital gain determined by taking into account only gain or loss properly taken into account for the portion of the taxable year on or after May 6, 2003 (determined without regard to collectibles gain or loss, gain described in section 1(h)(6)(A)(i) of such Code, and section 1202 gain), or (ii) the amount on which a tax is determined under such subparagraph (without regard to this subsection), (B) 8 percent of the lesser of— (i) the qualified 5-year gain (as defined in section 1(h)(9) of the Internal Revenue Code of 1986, as in effect on the day before the date of the enactment of this Act) properly taken into account for the portion of the taxable year before May 6, 2003, or (ii) the excess (if any) of— (I) the amount on which a tax is determined under such subparagraph (without regard to this subsection), over (II) the amount on which a tax is determined under subparagraph (A), plus (C) 10 percent of the excess (if any) of— (i) the amount on which a tax is determined under such subparagraph (without regard to this subsection), over (ii) the sum of the amounts on which a tax is determined under subparagraphs (A) and (B). (2) The amount of tax determined under subparagraph (C) of section (1)(h)(1) of such Code shall be the sum of— (A) 15 percent of the lesser of— (i) the excess (if any) of the amount of net capital gain determined under subparagraph (A)(i) of paragraph (1) of this subsection over the amount on which a tax is determined under subparagraph (A) of paragraph (1) of this subsection, or (ii) the amount on which a tax is determined under such subparagraph (C) (without regard to this subsection), plus (B) 20 percent of the excess (if any) of— (i) the amount on which a tax is determined under such subparagraph (C) (without regard to this subsection), over (ii) the amount on which a tax is determined under subparagraph (A) of this paragraph. (3) For purposes of applying section 55(b)(3) of such Code, rules similar to the rules of paragraphs (1) and (2) of this subsection shall apply.

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