Page:United States Statutes at Large Volume 95.djvu/296

 95 STAT. 270

PUBLIC LAW 97-34—AUG. 13, 1981 certificate acquired by an estate by reason of the death of the decedent— "(i) subparagraph (A) shall not apply, and "(ii) subsection O> shall be applied as if the estate were t) the decedent." (b) CONFORMING AMENDMENTS.—

(1) The table of sections for part III of subchapter B of chapter 1 is amended by striking out the item relating to section 128 and inserting in lieu thereof the following new items: "Sec. 128. Interest on certain savings certificates. "Sec. 129. Cross references to other Acts."

26 USC 265.

26 USC 584. 26 USC 643.

26 USC 702.

94 Stat. 306. 26 USC 128 note. Report to Congress. 26 USC 128 note.

Ante, p. 267.

(2) Section 265 (relating to expenses and interest relating to tax-exempt income) is amended by inserting ", or to purchase or carry any certificate to the extent the interest on such certificate is excludable under section 128" after "116". (8) Paragraph (2) of section 584(c) (relating to income of participants in common trust funds), as in effect for taxable years beginning in 1981, is amended by inserting "or 128" after 116". (4) Paragraph (7) of section 643(a) (defining distributable net income), as in effect for taxable years beginning in 1981, is amended by inserting "or section 128 (relating to interest on certain savings certificates)" after "received)". (5) Section 702(a)(5) (relating to income and credits of partners), as in effect for taxable years beginning in 1981, is amended by inserting "or 128" after "116". (6) Each of the following provisions, as in effect for taxable years beginning after December 31, 1981, are amended by inserting "or interest" after "dividends" each place it appears in the caption or text: (A) section 584(c)(2), (B) section 643(a)(7), (C) section 702(a)(5). (c) STUDY.—The Secretary of the Treasury or his delegate shall conduct a study of the exemption from income of interest earned on depository institution tax-exempt savings certificates established by this section to determine the exemption^ effectiveness in generating additional savings. Such report shall be submitted to the Congress before June 1, 1983. (d) EFFECTIVE DATES.—

(1) IN GENERAL.—Except as provided in paragraph (2), the amendments made by this section shall apply to taxable years ending after September 30, 1981. (2) CONFORMING AMENDMENTS.—The amendments made by subsection (b)(6) shall apply to taxable years beginning after December 31, 1981.

SEC. 302. PARTIAL EXCLUSION OF INTEREST. (a) AMOUNT OF EXCLUSION.—Section 128 (relating to the interest on

certain savings certificates) is amended to read as follows: "SEC. 128. PARTIAL EXCLUSION OF INTEREST.

"(a) IN GENERAL.—Gross income does not include the amounts received during the taxable year by an individual as interest. "(b) MAXIMUM DOLLAR AMOUNT.—The aggregate amount excludable under subsection (a) for any taxable year shall not exceed 15 percent of the lesser of— "(1) $3,000 ($6,000 in the case of a joint return under section 6013), or

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