Page:United States Statutes at Large Volume 98 Part 1.djvu/991

 PUBLIC LAW 98-369—JULY 18, 1984 into account income."

in computing qualified

98 STAT. 943

net investment

(5) TREATMENT OF ALCOHOL FUELS CREDIT.—Subparagraph (c)

of section 55(b)(l) (defining alternative minimum taxable 26 USC 55. income) is amended by striking out "section 667" and inserting in lieu thereof "section 87 or 667". (b) AMENDMENT RELATED TO SECTION 202.—Paragraph (5) of section 213(d) (relating to definitions) is amended by striking out Ante, p. 847. "paragraph (2)" and inserting in lieu thereof "paragraph (4)". (c) AMENDMENTS RELATED TO SECTION 203.— (1) CLARIFICATION OF ADJUSTED GROSS INCOME IN THE CASE OF ESTATES AND TRUSTS.—Paragraph (2) of section 165(h) (relating to

26 USC 165.

casualty and theft losses) is amended by redesignating subparagraph (B) as subparagraph (C) and by inserting after subparagraph (A) the following new subparagraph: "(B) DETERMINATION OF ADJUSTED GROSS INCOME IN CASE

OF ESTATES AND TRUSTS.—For purposes of paragraph (1), the

.adjusted gross income of an estate or trust shall be computed in the same manner as in the case of an individual, except that the deductions for costs paid or incurred in connection with the administration of the estate or trust shall be treated as allowable in arriving at adjusted gross income." (2) COORDINATION OF SECTION 165(h) WITH SECTION 1231.— (A) COORDINATION FOR 1984 AND SUBSEQUENT YEARS.— (i) CLARIFICATION OF LOSSES TO WHICH SECTION

165(c)(3) APPLIES.—Paragraph (3) of section 165(c) (relating to limitation on loss of individuals) is amended by striking out "trade or business" and inserting in lieu thereof "trade or business or a transaction entered into for profit". (ii) AMENDMENT OF SECTION 165(h).—Subsection (h) of section 165 (relating to casualty and theft losses) is amended to read as follows: "(h) TREATMENT OF CASUALTY GAINS AND LOSSES.—

"(1) $100 UMiTATiON PER CASUALTY.—Any loss of an individual described in subsection (c)(3) shall be allowed only to the extent that the amount of the loss to such individual arising from each casualty, or from each theft, exceeds $100. "(2) N E T CASUALTY LOSS ALLOWED ONLY TO THE EXTENT IT EXCEEDS 1 0 PERCENT OF ADJUSTED GROSS INCOME.—

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"(A) IN GENERAL.—If the personal casualty losses for any taxable year exceed the personal casualty gains for such taxable year, such losses shall be allowed for the taxable year only to the extent of the sum of— "(i) the amount of the personal casualty gains for the taxable year, plus "(ii) so much of such excess as exceeds 10 percent of the adjusted gross income of the individual. "(B) SPECIAL RULE WHERE PERSONAL CASUALTY GAINS EXCEED PERSONAL CASUALTY LOSSES.—If the personal cas-

ualty gains for any taxable year exceed the personal casualty losses for such taxable year— "(i) all such gains shall be treated as gains from sales or exchanges of capital assets, and "(ii) all such losses shall be treated as losses from sales or exchanges of capital assets.

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