Page:United States Statutes at Large Volume 90 Part 2.djvu/85

 PUBLIC LAW 94-455—OCT. 4, 1976

9 0 STAT. 1553

" (e) T I M B E R PREFERENCE I N C O M E DEnNED,—For purposes of t h i s

part, the term 'timber preference income' means the sum of— " (1) the gains referred to in section 631(a) and section 631(b), 26 USC 631. " (2) long-term capital gains on timber, and " (3) gains on the sale of timber included in paragraph 1231 (b)(1), multiplied by the fraction determined in paragraph 5 7 (a)(9)(B). " (d) AMENDMENTS OF SECTION 58.—Section 58 (relating to rules for 26 USC 58. application of part) is amended— (1) by striking out subsection (a) and inserting in lieu thereof the following: " (a) MARRIED INDIVIDUALS F I L J N G SEPARATE EETTJRNS.—In the case

of a married individual who files a separate return for the taxable year, section 56 shall be applied by substituting $5,000 for $10,000 each place it appears.", (2) by striking out "$30,000" each place it appears in subsections (b) and (c)(2) and inserting in lieu thereof "$10,000", and (3) by a d d i n g a t the end thereof the following new subsections: " (h) REGULATIONS To INCLUDE T A X B E N E F I T RULE. — The Secretary

shall prescribe regulations under which items of tax preference shall be properly adjusted where the tax treatment giving rise to such items will not result in the reduction of the taxpayer's tax under this subtitle for any taxable years. " (i) CORPORATION DEFINED.—Except as provided in subsection (d)(2), for purposes of this part, the term 'corporation' does not include an electing small business corporation (as defined in section 1371(b)) or a personal holding company (as defined i n section 542)." (e) CONFORMING AMENDMENT. — S u b s e c t i o n (d) of section 443 (re-

26 USC 443.

lating to adjustment in exclusion for computing minimum tax for tax preferences) is amended by striking out "$30,000" and inserting in lieu thereof "$10,00O". (f) SECTION 21 N O T To A P P L Y. — For purposes of section 21 of the 26 USC 56 note. I n t e r n a l Revenue Code of 1954, the amendments made by this section shall not be treated as a change in a r a t e of tax. (g) EFFEGTRTS D A T E. —

26 USC 56 note.

(1) IN GENERAL.—Except as provided by paragraph (4), the amendments made by this section shall apply to items of tax preference for taxable years beginning after December 31, 1975. (2) T A X CARRYOVER.—Except as provided in paragraph (4) and in section 56(e) of the I n t e r n a l Revenue Code of 1954, ^»'e, p. 1552. the amount of any tax carryover under section 56(c) of such Code ^"^e, p. 1550. from a taxable year beginning before January 1, 1976, shall not be allowed as a tax carryover for any taxable year beginning after December 31, 1975. (3) SPECIAL RULE FOR TAXABLE YEAR I 9 7 6 I N THE CASE OF A COR-

PORATION.—Notwithstanding any provision of the Internal Revenue Code of 1954 to the contrary, i n the case of a corporation 26 USC 1 et seq. which is not an electing small business corporation or a personal holding company the tax imposed by section 56 of such Code for taxable years beginning in 1976, is an amount equal to the sum of— (A) the amount of the tax which would have been imposed for such taxable year under such section as such section was in effect on the d a y before the date of the enactment of the Ante p 1520 T a x Reform Act of 1976, and (B) one-half of the amount by which the amount of the tax which would be imposed for such taxable year under such

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