Page:United States Statutes at Large Volume 92 Part 3.djvu/242

 92 STAT. 2874

PUBLIC LAW 95-600—NOV. 6, 1978 carryback or carryover to any other taxable year, the amount of the limitation under section 46(a)(3) for the current taxable year shall be deemed to be "(i) the amount of the credit allowable under section 38 for the current taxable year without regard to this subparagraph, reduced by "(ii) the amount equal to the lesser of (I) the amount of the credit allowable under section 38 for the current taxable year without regard to this subparagraph, or (II) the net tax imposed by this section for the current taxable year reduced by the sum of the amounts of reduction described in clause (ii) of subparagraphs (A) and(B).

26 USC 46. ^ 26 USC 38.

"(D) NET TAX IMPOSED BY THIS SECTION.—For purposes of

26 USC 33. 26 USC 57.

26 USC 1034.

26 USC 1371. 26 USC 542. 26 USC 56.

26 USC 63. 26 USC 164. 26 USC 213. 26 USC 165. 26 USC 691.

Post, p. 2897. \

this paragraph, the term 'net tax imposed by this section' means the tax imposed by this section reduced by the foreign tax credit allowed under section 33(a), as modified by paragraph (2). (b) AMENDMENT OF SECTION 57.—Section 57 (relating to items of tax preference) is amended— (1) by adding the following at the end of paragraph (9) subsection (a): "(D) PRINCIPAL RESIDENCE.—For purposes of subparagraph (A), gain from the sale or exchange of a principal residence (within the meaning of section 1034) shall not be taken into account,", (2) by striking out the last sentence of subsection (a) and inserting in lieu thereof the following: "Paragraphs (3) and (11) shall not apply to a corporation other than an electing small business corporation (as defined in section 1371(b)) and a personal holding company (as defined in section 542). For purposes of section 56, in the case of a taxpayer other than a corporation, the adjusted itemized deductions described in paragraph (1) and capital gains described in paragraph (9) shall not be treated as items of tax preference." (3) by striking out subsection (b)(1) and inserting the following in lieu thereof: "(1) IN GENERAL.—For purposes of paragraph (1) of subsection (a), the amount of the adjusted itemized deductions for any taxable year is the amount by which the sum of the itemized deductions (as defined in section 63(f)) other than— "(A) the deduction for State and local taxes provided by section 164(a), "(B) the deduction for medical, dental, etc., expenses provided by section 213, "(C) the deduction for casualty losses described in section 165(c)(3), and "(D) the deduction allowable under section 691(c), exceeds 60 percent of the taxpayer's adjusted gross income reduced by the items in subparagraphs (A) through (D) for the taxable year.", and (4) by striking out subparagraph (A) of subsection (b)(2), as amended by section 701 of this Act, and inserting in lieu thereof the following: "(A) IN GENERAL.—In the case of an estate or trust, for purposes of paragraph (1) of subsection (a), the amount of the adjusted itemized deductions for any taxable year is the

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