Internal Revenue Code:Sec. 68. Overall limitation on itemized deductions
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Contents |
Location in Internal Revenue Code
TITLE 26 - INTERNAL REVENUE CODE Subtitle A - Income Taxes CHAPTER 1 - NORMAL TAXES AND SURTAXES Subchapter B - Computation of Taxable Income PART I - DEFINITION OF GROSS INCOME, ADJUSTED GROSS INCOME, TAXABLE INCOME, ETC.
Statute
Sec. 68. Overall limitation on itemized deductions (a) General rule In the case of an individual whose adjusted gross income exceeds the applicable amount, the amount of the itemized deductions otherwise allowable for the taxable year shall be reduced by the lesser of - (1) 3 percent of the excess of adjusted gross income over the applicable amount, or (2) 80 percent of the amount of the itemized deductions otherwise allowable for such taxable year. (b) Applicable amount (1) In general For purposes of this section, the term ''applicable amount'' means $100,000 ($50,000 in the case of a separate return by a married individual within the meaning of section 7703). (2) Inflation adjustments In the case of any taxable year beginning in a calendar year after 1991, each dollar amount contained in paragraph (1) shall be increased by an amount equal to - (A) such dollar amount, multiplied by (B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, by substituting ''calendar year 1990'' for ''calendar year 1992'' in subparagraph (B) thereof. (c) Exception for certain itemized deductions For purposes of this section, the term ''itemized deductions'' does not include - (1) the deduction under section 213 (relating to medical, etc. expenses), (2) any deduction for investment interest (as defined in section 163(d)), and (3) the deduction under section 165(a) for casualty or theft losses described in paragraph (2) or (3) of section 165(c) or for losses described in section 165(d). (d) Coordination with other limitations This section shall be applied after the application of any other limitation on the allowance of any itemized deduction. (e) Exception for estates and trusts This section shall not apply to any estate or trust.
Sources
(Added Pub. L. 101-508, title XI, Sec. 11103(a), Nov. 5, 1990, 104 Stat. 1388-406; amended Pub. L. 103-66, title XIII, Sec. 13201(b)(3)(E), 13204, Aug. 10, 1993, 107 Stat. 459, 462; Pub. L. 105-277, div. J, title IV, Sec. 4004(b)(2), Oct. 21, 1998, 112 Stat. 2681-911; Pub. L. 107-16, title I, Sec. 103(a), June 7, 2001, 115 Stat. 44.)
Amendment of Section
ADJUSTMENT OF APPLICABLE AMOUNT UNDER THIS SECTION FOR TAX YEARS BEGINNING IN 2002 For adjustment of ''applicable amount'' for determining limitation on itemized deductions under this section for tax years beginning in 2002, see section 3.08 of Revenue Procedure 2001-59, set out as a note under section 1 of this title. ENACTMENT OF SUBSECTIONS (F) AND (G) Pub. L. 107-16, title I, Sec. 103, 901, June 7, 2001, 115 Stat. 44, 150, provided that, applicable to taxable years beginning after Dec. 31, 2005, this section is temporarily amended by adding subsections (f) and (g) to read as follows: (f) Phaseout of limitation (1) In general In the case of taxable years beginning after December 31, 2005, and before January 1, 2010, the reduction under subsection (a) shall be equal to the applicable fraction of the amount which would (but for this subsection) be the amount of such reduction. (2) Applicable fraction For purposes of paragraph (1), the applicable fraction shall be determined in accordance with the following table:
Miscellaneous
--------------------------------------------------------------------- For taxable years beginning in The applicable fraction is - calendar year - --------------------------------------------------------------------- 2006 and 2007 2/3 2008 and 2009 1/3. ------------------------------- (g) Termination This section shall not apply to any taxable year beginning after December 31, 2009. See Effective and Termination Dates of 2001 Amendment note below. AMENDMENTS 1998 - Subsec. (c)(3). Pub. L. 105-277 substituted ''for casualty or theft losses described in paragraph (2) or (3) of section 165(c) or for losses described in section 165(d)'' for ''for losses described in subsection (c)(3) or (d) of section 165''. 1993 - Subsec. (b)(2)(B). Pub. L. 103-66, Sec. 13201(b)(3)(E), substituted ''1992'' for ''1989''. Subsec. (f). Pub. L. 103-66, Sec. 13204, struck out heading and text of subsec. (f). Text read as follows: ''This section shall not apply to any taxable year beginning after December 31, 1995.'' EFFECTIVE AND TERMINATION DATES OF 2001 AMENDMENT Pub. L. 107-16, title I, Sec. 103(b), June 7, 2001, 115 Stat. 45, provided that: ''The amendment made by this section (amending this section) shall apply to taxable years beginning after December 31, 2005.'' Amendment by Pub. L. 107-16 inapplicable to taxable, plan, or limitation years beginning after Dec. 31, 2010, and the Internal Revenue Code of 1986 to be applied and administered to such years as if such amendment had never been enacted, see section 901 of Pub. L. 107-16, set out as a note under section 1 of this title. EFFECTIVE DATE OF 1998 AMENDMENT Pub. L. 105-277, div. J, title IV, Sec. 4004(c)(3), Oct. 21, 1998, 112 Stat. 2681-911, provided that: ''The amendment made by subsection (b)(2) (amending this section) shall apply to taxable years beginning after December 31, 1990.'' EFFECTIVE DATE OF 1993 AMENDMENT Amendment by section 13201(b)(3)(E) of Pub. L. 103-66 applicable to taxable years beginning after Dec. 31, 1992, see section 13201(c) of Pub. L. 103-66, set out as a note under section 1 of this title. EFFECTIVE DATE Section applicable to taxable years beginning after Dec. 31, 1990, see section 11103(e) of Pub. L. 101-508, set out as an Effective Date of 1990 Amendment note under section 1 of this title.
References
SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 1, 56, 773 of this title.