Page:United States Statutes at Large Volume 78.djvu/152

 110

68A Stat. 5; il'vici 26 USC 1201.

PUBLIC LAW 88-272-FEB. 26, 1964

" (A) by adding so much of the aiiioiiiit thereof as does not exceed average base period capital gain net income above 1331^ percent of average base period income, and " (B) by adding the remainder (if any) of such net income above the 20 percent of the averagable income as taken into account for purposes of computing the tax imposed by section ^ (and abovc the amounts (if any) referred to in subsection (f)(1)). "(2) COMPUTATION or ALTERNATIVE TAX.—In the case of any taxpayer who has capital gain net mcome for the computation year, section 1201(b) shall be treated as imposing a tax equal to the t-ax imposed by section 1, reduced by the amount (if any) by which— " (A) the tax imposed by section 1 and attributable to the capital gain net income for the computation year (determined under paragraph (1)), exceeds " (B) an amount equal to 25 percent of the excess of the net long-term capital gain over the net short-term capital loss. "(f)

Ante, p. 106.

26 USC 72 ^'

Ante, p. 106.

26U°sc72 ^2\%r\Al

26 USC 144.

[78 STAT.

TREATMENT OF CERTAIN OTHER ITEMS.— "(1) G I F T OR WAGERING INCOME.—The tax imposed

by section 1 for the computation year which is attributable to the amounts subtracted from taxable income under paragraphs (2) and (3) of section 1302(b) shall equal the increase in tax under section 1 which results from adding such amounts above the 20 percent of the averagable income as taken into account for purposes of cx)mputing the tax imposed thereon by section 1. "^^) SECTION 72(m)(5).—Section 72(m)(5) (relating to penalties applicable to certain amounts received by owner-employees) shall be applied as if this part had not been enacted. "(3) OTHER ITEMS.—Except as otherwise provided in this part, the order and manner in which items of income shall be taken into account in computing the tax imposed by this chapter on the iucome of any eligible individual to whom section 1301 applies for any coniputation year shall be determined under regulations prescribed by the Secretary or his delegate. " (g) SHORT IAXARLE YEARS.—In the case of any computation year or base period year which is a short taxable year, this part shall be applied in the manner provided in regulations prescribed by the Secretary or his delegate. "SEC. 1305. REGULATIONS. "The Secretary or his delegate shall prescribe such regulations as may be necessary to carry out the purposes of this part." (^) REPEAL OF SECTION 72(e)(3).—Section 72(e)(3) (relating to limit on tax attributable to receipt of lump sum) is hereby repealed. (^) AMENDMENT OF SECTION 144.—Section 144 (relating to election of standard deduction) is amended by adding after subsection (c) (as added by 112(c)(2) of this Act) the following new subsection: " (d) INDIVIDUALS ELECTING INCOME A\T5RAGING.—In the case of a taxpayer who chooses to have the benefits of part I of siil)chapter Q, (relating to income averaging) for the taxable year— "(1) subsection (a) shall not apply for such taxable year, and "(2) the standard deduction shall be allowed if the taxpayer so elects in his retuni for such taxable year. The Secu'etary or his delegate shall by regulations prescribe the manner of signifying such election in the return. I f the taxpayer on making his return fails to signify, in the manner so prescribed, his election to take the standard deduction, such failure shall be considered his election not to take the standard deduction."

�