Tax Cuts and Jobs Act Conference Report

Title:
Tax Cuts and Jobs Act, Conference Report to Accompany H.R. 1
Format:
Paperback
USA Price: 
Stock:
Backordered
GPO Stock Number:
048-004-02602-3
ISBN:
9780160944024
Description

The committee of conference on the disagreeing votes of the two Houses on the amendment of the Senate to the bill (H.R. 1), to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018, having met, after full and free conference, have agreed to recommend and do recommend to their respective Houses as follows: That the House recede from its disagreement to the amendment of the Senate and agree to the same with an amendment as follows: In lieu of the matter proposed to be inserted by the Senate amendment -  see table of contents.

Table of Contents

CONFERENCE REPORT ....................................................................................... 1

JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE ............................................................................................................. 191

TITLE I—INDIVIDUAL TAX REFORM ............................................................... 191

A. Reduction and Simplification of Individual Income Tax Rates (sec. 1001 of the House bill, sec. 11001 of the Senate amendment, and sec. 1 of the Code) ........................................................ 191

1. Increase in standard deduction (sec. 1002 of the House bill, sec. 11021 of the Senate amendment, and sec. 63 of the Code) .............................................................................. 201

2. Repeal of the deduction for personal exemptions (sec. 1003 of the House bill, sec. 11041 of the Senate amendment, and sec. 151 of the Code) ........................................................ 202

3. Alternative inflation adjustment (secs. 1001 and 1005 of the House bill, sec. 11002 of the Senate amendment, and sec. 1 of the Code) ................................................................... 204

B. Treatment of Business Income of Individuals, Trusts, and Estates ................................................................................................. 205

1. Deduction for qualified business income (sec. 1004 of the House bill, sec. 11011 of the Senate amendment, and sec. 199A of the Code) .................................................................... 205

C. Simplification and Reform of Family and Individual Tax Credits ..................................................................................................... 225

1. Enhancement of child tax credit and new family credit (sec. 1101 of the House bill, sec. 11022 of the Senate amendment, and sec. 24 of the Code) ............................................... 225

2. Credit for the elderly and permanently disabled (sec. 1102(a) of the House bill and sec. 22 of the Code) ............................. 228

3. Repeal of credit for plug-in electric drive motor vehicles (sec. 1102(c) of the House bill and sec. 30D of the Code) ..... 229

4. Termination of credit for interest on certain home mortgages (sec. 1102(b) of the House bill and sec. 25 of the Code) ....... 229

5. Modification of taxpayer identification number requirements for the child tax credit, earned income credit, and American Opportunity credit (sec. 1103 of the House bill, sec. 11022 of the Senate amendment and secs. 24, 25A and 32 of the Code) ......................................................................... 230

6. Procedures to reduce improper claims of earned income credit (sec. 1104 of the House bill and new secs. 32(c)(2)(B)(vii) and 6011(i) of the Code) .......................................................... 233

7. Certain income disallowed for purposes of the earned income tax credit (sec. 1105 of the House bill, new secs. 32(n) and 32(c)(2)(C) of the Code, and secs. 6051, 6052, 6041(a), and 6050(w) of the Code) ........................................................ 235 VerDate Sep 11 2014 09:40 Dec 17, 2017 Jkt 027788 PO 00000 Frm 00005 Fmt 5904 Sfmt 0483 E:\HR\OC\HR466.XXX HR466 SSpencer on DSKBBXCHB2PROD with REPORTS

Page IV TITLE I—INDIVIDUAL TAX REFORM—Continued 8. Limitation on losses for taxpayers other than corporations (sec. 11012 of the Senate amendment and sec. 461(l) of the Code) .................................................................................. 238

9. Reform of American opportunity tax credit and repeal of lifetime learning credit (sec. 1201 of the House bill and sec. 25A of the Code) ............................................................... 240

10. Consolidation and modification of education savings rules (sec. 1202 of the House bill, sec. 11033 of the Senate amendment, and secs. 529 and 530 of the Code) .................. 241

11. Reforms to discharge of certain student loan indebtedness (sec. 1203 of the House bill, sec. 11031 of the Senate amendment, and sec. 108 of the Code) .................................. 246

12. Repeal of deduction for student loan interest (sec. 1204 of the House bill and sec. 221 of the Code) ........................... 248

13. Repeal of deduction for qualified tuition and related expenses (sec. 1204 of the House bill and sec. 222 of the Code) ......................................................................................... 249

14. Repeal of exclusion for qualified tuition reductions (sec. 1204 of the House bill and sec. 117(d) of the Code) ............. 249

15. Repeal of exclusion for interest on United States savings bonds used for higher education expenses (sec. 1204 of the House bill and sec. 135 of the Code) ............................... 250

16. Repeal of exclusion for educational assistance programs (sec. 1204 of the House bill and sec. 127 of the Code) ......... 251

17. Rollovers between qualified tuition programs and qualified ABLE programs (sec. 1205 of the House bill, sec. 11025 of the Senate amendment and secs. 529 and 529A of the Code) ......................................................................................... 252

18. Repeal of overall limitation on itemized deductions (sec. 1301 of the House bill, sec. 11046 of the Senate amendment, and sec. 68 of the Code) ............................................... 255

D. Simplification and Reform of Deductions and Exclusions ............. 256

1. Modification of deduction for home mortgage interest (sec. 1302 of the House bill, sec. 11043 of the Senate amendment, and sec. 163(h) of the Code) ......................................... 256

2. Modification of deduction for taxes not paid or accrued in a trade or business (sec. 1303 of the House bill, sec. 11042 of the Senate amendment, and sec. 164 of the Code) ........... 259

3. Repeal of deduction for personal casualty and theft losses (sec. 1304 of the House bill, sec. 11044 of the Senate amendment, and sec. 165 of the Code) .................................. 261

4. Limitation on wagering losses (sec. 1305 of the House bill, sec. 11051 of the Senate amendment, and sec. 165 of the Code) ......................................................................................... 262

5. Modifications to the deduction for charitable contributions (sec. 1306 of the House bill, secs. 11023, 13703, and 13704 of the Senate amendment, and sec. 170 of the Code) ........... 263

6. Repeal of Certain Miscellaneous Itemized Deductions Subject to the Two-Percent Floor (secs. 1307 and 1312 of the House bill, sec. 11045 of the Senate amendment, and secs. 62, 67 and 212 of the Code) .............................................. 273

7. Repeal of deduction for medical expenses (sec. 1308 of the House bill, sec. 11028 of the Senate amendment and sec. 213 of the Code) ....................................................................... 276

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Page V TITLE I—INDIVIDUAL TAX REFORM—Continued

8. Repeal of deduction for alimony payments and corresponding inclusion in gross income (sec. 1309 of the House bill and secs. 61, 71, and 215 of the Code) ................ 277 9.

Repeal of deduction for moving expenses (sec. 1310 of the House bill, sec. 11050 of the Senate amendment, and sec. 217 of the Code) ....................................................................... 278

10. Termination of deduction and exclusions for contributions to medical savings accounts (sec. 1311 of the House bill, secs. 106(b) and 220 of the Code) ........................................... 279

11. Denial of deduction for performing artists and certain officials; Modification of deduction for educator expenses (sec. 1312 of the House bill, sec. 11032 of the Senate amendment and sec. 62 of the Code) ................................................ 281 12. Suspension of exclusion for qualified bicycle commuting reimbursement (sec. 11048 of the Senate amendment and secs. 132(f) of the Code) .......................................................... 282

13. Limitation on exclusion for employer-provided housing (sec. 1401 of the House bill and sec. 119 of the Code) .................. 283

14. Modification of exclusion of gain on sale of a principal residence (sec. 1402 of the House bill, sec. 11047 of the Senate amendment, and sec. 121 of the Code) ..................... 284

15. Sunset of exclusion for dependent care assistance programs (sec. 1404 of the House bill and sec. 129 of the Code) ......... 285

16. Repeal of exclusion for qualified moving expense reimbursement (sec. 1405 of the House bill, sec. 11049 of the Senate amendment, and sec. 132(g) of the Code) ................. 286

17. Repeal of exclusion for adoption assistance programs (sec. 1406 of the House bill and sec. 137 of the Code) .................. 286

E. Simplification and Reform of Savings, Pensions, Retirement ....... 288

1. Repeal of special rule permitting recharacterization of IRA contributions (sec. 1501 of the House bill, sec. 13611 of the Senate amendment, and sec. 408A of the Code) ............ 288

2. Reduction in minimum age for allowable in-service distributions (sec. 1502 of the House bill and secs. 401 and 457 of the Code) .............................................................................. 291

3. Modification of rules governing hardship distributions (sec. 1503 of the House bill and secs. 401 and 403 of the Code) .. 292

4. Modification of rules relating to hardship withdrawals from cash or deferred arrangements (sec. 1504 of the bill, sec. 11033(c) of the Senate amendment, and sec. 401 of the Code) ......................................................................................... 293 5. Extended rollover period for the rollover of plan loan offset amounts in certain cases (sec. 1505 of the bill, sec. 13613 of the Senate amendment, and sec. 402 of the Code) ........... 294

6. Modification of nondiscrimination rules for certain plans providing benefits or contributions to older, longer service participants (sec. 1506 of the House bill and sec. 401 of the Code) .................................................................................. 296 7. Modification of rules applicable to length of service award programs for bona fide public safety volunteers (sec. 13612 of the Senate amendment and sec. 457(e) of the Code) ....... 306

F. Modifications to Estate, Gift, and Generation-Skipping Transfers Taxes (secs 1601 and 1602 of the House bill, sec. 11061 of the Senate amendment, and secs. 2001 and 2010 of the Code) .. 307

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Page VI TITLE I—INDIVIDUAL TAX REFORM—Continued

G. Alternative Minimum Tax (sec. 2001 of the House bill, sec. 12001 of the Senate amendment, and secs. 53 and 55–59 of the Code) .......................................................... 317

H. Elimination of Shared Responsibility Payment for Individuals Failing to Maintain Minimal Essential Coverage (sec. 11081 of the Senate amendment and sec. 5000A of the Code) .............. 323

I. Other Provisions ................................................................................. 325

1. Temporarily allow increased contributions to ABLE accounts, and allow contributions to be eligible for saver’s credit (sec. 11024 of the Senate amendment and sec. 529A of the Code) .............................................................................. 325 2. Extension of time limit for contesting IRS levy (sec. 11071 of the Senate amendment and secs. 6343 and 6532 of the Code) .................................................................................. 329

3. Treatment of certain individuals performing services in the Sinai Peninsula of Egypt (sec. 11026 of the Senate amendment and secs. 2, 112, 692, 2201, 3401, 4253, 6013, and 7508 of the Code) ..................................................................... 330 4. Modifications of user fees requirements for installment agreements (sec. 11073 of the Senate amendment and new sec. 6159(f) of the Code) .......................................................... 331

5. Relief for 2016 disaster areas (sec. 11029 of the Senate amendment and secs. 72(t), 165, 401-403, 408, 457, and 3405 of the Code) ..................................................................... 332

6. Attorneys’ fees relating to awards to whistleblowers (sec. 11078 of the Senate amendment and sec. 62(a)(21) of the Code) ......................................................................................... 335

7. Clarification of whistleblower awards (sec. 11079 of the Senate amendment and new sec. 7623(c) of the Code) ............... 336

8. Exclusion from gross income of certain amounts received by wrongly incarcerated individuals (sec. 11027 of the Senate amendment and sec. 139F of the Code) .......................... 340

BUSINESS TAX REFORM ..................................................................................... 341

A. Tax Rates ........................................................................................... 341

1. Reduction in corporate tax rate (sec. 3001 of the House bill, secs. 13001 and 13002 of the Senate amendment, and secs. 11 and 243 of the Code) .......................................... 341

B. Cost Recovery .................................................................................... 346

1. Increased expensing (sec. 3101 of the House bill, secs. 13201 and 13311 of the Senate amendment, and sec. 168(k) of the Code) .................................................................................. 346

2. Modifications to depreciation limitations on luxury automobiles and personal use property (sec. 13202 of the Senate amendment and sec. 280F of the Code) .......................... 357

3. Modifications of treatment of certain farm property (sec. 13203 of the Senate amendment and sec. 168 of the Code) 360 4. Applicable recovery period for real property (sec. 1320

4 of the Senate amendment and sec. 168 of the Code) ................ 362

5. Use of alternative depreciation system for electing farming businesses (sec. 13205 of the Senate amendment and sec. 168 of the Code) ....................................................................... 367

6. Expensing of certain costs of replanting citrus plants lost by reason of casualty (sec. 13207 of the Senate amendment and sec. 263A of the Code) ..................................................... 370

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Page VII BUSINESS TAX REFORM—Continued C. Small Business Reforms ................................................................... 372

1. Expansion of section 179 expensing (sec. 3201 of the House bill, sec. 13101 of the Senate amendment, and sec. 179 of the Code) .............................................................................. 372

2. Small business accounting method reform and simplification (sec. 3202 of the House bill, secs. 13102 through 13105 of the Senate amendment, and secs. 263A, 448, 460, and 471 of the Code) .......................................................... 375

3. Modification of treatment of S corporation conversions to C corporations (sec. 3204 of the House bill, sec. 13543 of the Senate amendment, and secs. 481 and 1371 of the Code) ......................................................................................... 382 D. Reform of Business Related Exclusions, Deductions, etc. ............. 385

1. Interest (secs. 3203 and 3301 of the House bill, secs. 13301 and 13311 of the Senate amendment, and sec. 163(j) of the Code) .................................................................................. 385

2. Modification of net operating loss deduction (sec. 3302 of the House bill, sec. 13302 of the Senate amendment, and sec. 172 of the Code) ............................................................... 393

3. Like-kind exchanges of real property (sec. 3303 of the House bill, and sec. 13303 of the Senate amendment, and sec. 1031 of the Code) ..................................................................... 394

4. Revision of treatment of contributions to capital (sec. 3304 of the House bill and sec. 118 of the Code) ........................... 397

5. Repeal of deduction for local lobbying expenses (sec. 3305 of the House bill, sec. 13308 of the Senate amendment, and sec. 162(e) of the Code) .................................................... 399

6. Repeal of deduction for income attributable to domestic production activities (sec. 3306 of the House bill, sec. 13305 of the Senate amendment, and sec. 199 of the Code) ........... 400

7. Entertainment, etc. expenses (sec. 3307 of the House bill, sec. 13304 of the Senate amendment, and sec. 274 of the Code) ......................................................................................... 402

8. Repeal of exclusion, etc., for employee achievement awards (sec. 1403 of the House bill, sec. 13310 of the Senate amendment, and secs. 74(c) and 274(j) of the Code) ............ 407

9. Unrelated business taxable income increased by amount of certain fringe benefit expenses for which deduction is disallowed (sec. 3308 of the House bill and sec. 512 of the Code) ............................................................................. 408

10. Limitation on deduction for FDIC premiums (sec. 3309 of the House bill, sec. 13531 of the Senate amendment, and sec. 162 of the Code) ........................................................ 410

11. Repeal of rollover of publicly traded securities gain into specialized small business investment companies (sec. 3310 of the House bill and sec. 1044 of the Code) ................ 412

12. Certain self-created property not treated as a capital asset (sec. 3311 of the House bill and sec. 1221 of the Code) ....... 413

13. Repeal of special rule for sale or exchange of patents (sec. 3312 of the House bill and sec. 1235 of the Code)) ............... 414

14. Repeal of technical termination of partnerships (sec. 3313 of the House bill and sec. 708(b) of the Code) ....................... 415

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Page VIII BUSINESS TAX REFORM—Continued

15. Recharacterization of certain gains in the case of partnership profits interests held in connection with performance of investment services (sec. 3314 of the House bill, sec. 13310 of the Senate amendment, and secs. 1061 and 83 of the Code) .............................................................................. 416

16. Amortization of research and experimental expenditures (sec. 3315 of the House bill, sec. 13206 of the Senate amendment, and sec. 174 of the Code) .................................. 423

17. Certain special rules for taxable year of inclusion (sec. 13221 of the Senate amendment and sec. 451 of the Code) 425

18. Denial of deduction for certain fines, penalties, and other amounts (sec. 13306 of the Senate amendment and sec. 162(f) and new sec. 6050X of the Code) ................................. 430

19. Denial of deduction for settlements subject to nondisclosure agreements paid in connection with sexual harassment or sexual abuse (sec. 13307 of the Senate amendment and new sec. 162(q) of the Code) ................................................... 431

20. Uniform treatment of expenses in contingency fee cases (sec. 3316 of the House bill and new sec. 162(q) of the Code) ......................................................................................... 432

E. Reform of Business Credits .............................................................. 433

1. Repeal of credit for clinical testing expenses for certain drugs for rare diseases or conditions (sec. 3401 of the House bill, sec. 13401 of the Senate amendment, and sec. 45C of the Code) ...................................................................... 433

2. Repeal of employer-provided child care credit (sec. 3402 of the House bill and sec. 42F of the Code) ........................... 434

3. Rehabilitation credit (sec. 3403 of the House bill, sec. 13402 of the Senate amendment, and sec. 47 of the Code) ............. 435

4. Repeal of work opportunity tax credit (sec. 3404 of the House bill and sec. 51 of the Code) ........................................ 436

5. Repeal of deduction for certain unused business credits (sec. 3405 of the House bill, sec. 13403 of the Senate amendment, and sec. 196 of the Code) ............................................. 438

6. Termination of new markets tax credit (sec. 3406 of the House bill and sec. 45D of the Code) ..................................... 439

7. Repeal of credit for expenditures to provide access to disabled individuals (sec. 3407 of the House bill and sec. 44 of the Code) ......................................................................... 441

8. Modification of credit for portion of employer social security taxes paid with respect to employee tips (sec. 3408 of the House bill and sec. 45B of the Code) ............................... 442

9. Employer credit for paid family and medical leave (sec. 13403 of the Senate amendment, and new sec. 45S of the Code) .................................................................................. 443

F. Energy Credits .................................................................................. 445

1. Modifications to credit for electricity produced from certain renewable resources (sec. 3501 of the House bill and sec. 45 of the Code) ......................................................................... 445

2. Modification of the energy investment tax credit (sec. 3502 of the House bill and sec. 48 of the Code) ............................. 446

3. Extension and phaseout of residential energy efficient property credit (sec. 3503 of the House bill and sec. 25D of the Code) .................................................................................. 450

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Page IX BUSINESS TAX REFORM—Continued 4. Repeal of enhanced oil recovery credit (sec. 3504 of the House bill and sec. 43 of the Code) ........................................ 452

5. Repeal of credit for producing oil and gas from marginal wells (sec. 3505 of the House bill and sec. 45I of the Code) ......................................................................................... 452

6. Modification of credit for production from advanced nuclear power facilities (sec. 3506 of the House bill and sec. 45J of the Code) .............................................................................. 453

G. Bond Reforms .................................................................................... 455

1. Termination of private activity bonds (sec. 3601 of the bill and sec. 103 of the Code) ........................................................ 455

2. Repeal of advance refunding bonds (sec. 3602 of the bill, sec. 13532 of the Senate amendment, and sec. 149(d) of the Code) .................................................................................. 458

3. Repeal of tax credit bonds (sec. 3603 of the bill and secs. 54A, 54B, 54C, 54D, 54E, 54F and 6431 of the Code) .......... 459

4. No tax-exempt bonds for professional stadiums (sec. 3604 of the bill and sec. 103 of the Code) ....................................... 462

H. Insurance ........................................................................................... 464

1. Net operating losses of life insurance companies (sec. 3701 of the House bill, sec. 13511 of the Senate amendment, and sec. 810 of the Code) ........................................................ 464

2. Repeal of small life insurance company deduction (sec. 3702 of the House bill, sec. 13512 of the Senate amendment, and sec. 806 of the Code) ........................................................ 465

3. Surtax on life insurance company taxable income (sec. 3703 of the House bill and sec. 801 of the Code) ........................... 466

4. Adjustment for change in computing reserves (sec. 3704 of the House bill, sec. 13513 of the Senate amendment, and sec. 807 of the Code) ........................................................ 466

5. Repeal of special rule for distributions to shareholders from pre-1984 policyholders surplus account (sec. 3705 of the House bill, sec. 13514 of the Senate amendment, and sec. 815 of the Code) ............................................................... 467

6. Modification of proration rules for property and casualty insurance companies (sec. 3706 of the House bill, sec. 13515 of the Senate amendment, and sec. 832 of the Code) ......................................................................................... 469

7. Modification of discounting rules for property and casualty insurance companies (sec. 3707 of the House bill and sec. 832 of the Code) ....................................................................... 470

8. Repeal of special estimated tax payments (sec. 3708 of the House bill, sec. 13516 of the Senate amendment, and sec. 847 of the Code) ....................................................................... 473

9. Computation of life insurance tax reserves (sec. 13517 of the Senate amendment and sec. 807 of the Code) ................ 476

10. Modification of rules for life insurance proration for purposes of determining the dividends received deduction (sec. 13518 of the Senate amendment and sec. 812 of the Code) 479

11. Capitalization of certain policy acquisition expenses (sec. 13519 of the Senate amendment and sec. 848 of the Code) 482

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Page X BUSINESS TAX REFORM—Continued

12. Tax reporting for life settlement transactions, clarification of tax basis of life insurance contracts, and exception to transfer for valuable consideration rules (secs. 13518 through 13520 of the Senate amendment and secs. 101, 1016, and 6050X of the Code) ................................................. 483

I. Compensation ..................................................................................... 486

1. Modification of limitation on excessive employee remuneration (sec. 3801 of the House bill, sec. 13601 of the Senate amendment, and sec. 162(m) of the Code) ............................ 486

2. Excise tax on excess tax-exempt organization executive compensation (sec. 3802 of the House bill, sec. 13602 of the Senate amendment, and sec. 4960 of the Code) ................... 491

3. Treatment of qualified equity grants (sec. 3803 of the House bill, sec. 13603 of the Senate amendment, and secs. 83, 3401, and 6051 of the Code) ................................................... 494

4. Increase in excise tax rate for stock compensation of insiders in expatriated corporations (sec. 13604 of the Senate amendment and sec. 4985 of the Code) ................................. 503

J. Other Provisions ................................................................................ 509

1. Treatment of gain or loss of foreign persons from sale or exchange of interests in partnerships engaged in trade or business within the United States (sec. 13501 of the Senate amendment and secs. 864(c) and 1446 of the Code) 509

2. Modification of the definition of substantial built-in loss in the case of transfer of partnership interest (sec. 13502 of the Senate amendment and sec. 743 of the Code) ............ 512

3. Charitable contributions and foreign taxes taken into account in determining limitation on allowance of partner’s share of loss (sec. 13503 of the Senate amendment and sec. 704 of the Code) ............................................................... 513

4. Cost basis of specified securities determined without regard to identification (sec. 13533 of the Senate amendment and sec. 1012 of the Code) ............................................................. 515

5. Expansion of qualifying beneficiaries of an electing small business trust (sec. 13541 of the Senate amendment and sec. 1361 of the Code) ............................................................. 517

6. Charitable contribution deduction for electing small business trusts (sec. 13542 of the Senate amendment and sec. 642(c) of the Code) ................................................................... 518

7. Production period for beer, wine, and distilled spirits (sec. 13801 of the Senate amendment and sec. 263A of the Code) ......................................................................................... 519

8. Reduced rate of excise tax on beer (sec. 13802 of the Senate amendment and sec. 5051 of the Code) ................................. 520

9. Transfer of beer between bonded facilities (sec. 13803 of the Senate amendment and sec. 5414 of the Code) .............. 522

10. Reduced rate of excise tax on certain wine (sec. 13804 of the Senate amendment and sec. 5041 of the Code) .......... 524

11. Adjustment of alcohol content level for application of excise tax rates (sec. 13805 of the Senate amendment and sec. 5041 of the Code) ..................................................................... 526

12. Definition of mead and low alcohol by volume wine (sec. 13806 of the Senate amendment and sec. 5041 of the Code) ......................................................................................... 527

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Page XI BUSINESS TAX REFORM—Continued

13. Reduced rate of excise tax on certain distilled spirits (sec. 13807 of the Senate amendment and sec. 5001 of the Code) ......................................................................................... 529

14. Bulk distilled spirits (sec. 13808 of the Senate amendment and sec. 5212 of the Code) ...................................................... 530

15. Modification of tax treatment of Alaska Native Corporations and Settlement Trusts (sec. 13821 of the Senate amendment and sec. 6039H and new secs. 139G and 247 of the Code) .............................................................................. 531

16. Amounts paid for aircraft management services (sec. 13822 of the Senate amendment and sec. 4261 of the Code) .......... 534

17. Opportunity zones (sec. 13823 of the Senate amendment and new secs. 1400Z–1 and 1400Z–2 of the Code) ............... 537

18. Provisions relating to the low-income housing credit (secs. 13411 and 13412 of the Senate amendment and sec. 42 of the Code) .............................................................................. 540

EXEMPT ORGANIZATIONS .................................................................................. 542

A. Unrelated Business Income Tax ...................................................... 542

1. Clarification of unrelated business income tax treatment of entities exempt from tax under section 501(a) (sec. 5001 of the House bill and sec. 511 of the Code) ........................... 542

2. Exclusion of research income from unrelated business taxable income limited to publicly available research (sec. 5002 of the House bill and sec. 512(b)(9) of the Code) ......... 543

3. Unrelated business taxable income separately computed for each trade or business activity (sec. 13703 of the Senate amendment and sec. 512(a) of the Code) ............................... 545

B. Excise Taxes ...................................................................................... 548

1. Simplification of excise tax on private foundation investment income (sec. 5101 of the House bill and sec. 4940 of the Code) ......................................................................................... 548

2. Private operating foundation requirements relating to operation of an art museum (sec. 5102 of the House bill and sec. 4942(j) of the Code) .......................................................... 549

3. Excise tax based on investment income of private colleges and universities (sec. 5103 of the House bill, sec. 13701 of the Senate amendment, and new sec. 4968 of the Code) . 552

4. Provide an exception to the private foundation excess business holdings rules for philanthropic business holdings (sec. 5104 of the House bill and sec. 4943 of the Code) ....... 556

C. Requirements for Organizations Exempt From Tax ...................... 559

1. Section 501(c)(3) organizations permitted to make statements relating to political campaign in ordinary course of activities in carrying out exempt purpose (sec. 5201 of the House bill and sec. 501 of the Code) ........................... 559

2. Additional reporting requirements for donor advised fund sponsoring organizations (sec. 5202 of the House bill and sec. 6033 of the Code) ............................................................. 561

INTERNATIONAL TAX PROVISIONS ................................................................. 595

A. Establishment of Participation Exemption System for Taxation of Foreign Income ........................................................................... 595

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Page XII INTERNATIONAL TAX PROVISIONS—Continued

1. Deduction for foreign-source portion of dividends received by domestic corporations from specified 10-percent owned foreign corporations (sec. 4001 of the House bill, sec. 14101 of the Senate amendment, and new sec. 245A of the Code) 595

2. Modification of subpart F inclusion for increased investments in United States property (sec. 4002 of the House bill, sec. 14218 of the Senate amendment, and sec. 956 of the Code) .............................................................................. 600

3. Special rules relating to sales or transfers involving specified 10-percent owned foreign corporations (sec. 4003 of the House bill, sec. 14102 of the Senate Amendment and secs. 367(a)(3)(C), 961, 1248 and new sec. 91 of the Code) .. 601

4. Treatment of deferred foreign income upon transition to participation exemption system of taxation and deemed repatriation at two-tier rate (sec. 4004 of the House bill, sec. 14103 of the Senate amendment, and secs. 78, 904, 907 and 965 of the Code) ........................................................ 606

5. Election to increase percentage of domestic taxable income offset by overall domestic loss treated as foreign source (sec. 14305 of the Senate amendment and sec. 904(g) of the Code) .................................................................................. 622 B. Rules Related to Passive and Mobile Income ................................. 622

1. Deduction for foreign-derived intangible income and global intangible low-taxed income (sec. 14202 of the Senate amendment and new sec. 250 of the Code) ........................... 622

2. Special rules for transfers of intangible property from controlled foreign corporations to United States shareholders (sec. 14203 of the Senate amendment and new sec. 966 of the Code) .............................................................................. 627 C. Modifications Related to Foreign Tax Credit System .................... 628

1. Repeal of section 902 indirect foreign tax credits; determination of section 960 credit on current year basis (sec. 4101 of the House bill, sec. 14301 of the Senate amendment, and secs. 902 and 960 of the Code) ........................................ 628 2. Source of income from sales of inventory determined solely on basis of production activities (sec. 4102 of the House bill, sec. 14304 of the Senate amendment, and sec. 863(b) of the Code) ...................................................................... 629

3. Separate foreign tax credit limitation basket for foreign branch income (sec. 14302 of the Senate amendment and sec. 904 of the Code) ............................................................... 630

4. Acceleration of election to allocate interest, etc., on a worldwide basis (sec. 14303 of the Senate amendment and sec. 864 of the Code) ....................................................................... 630

D. Modification of Subpart F Provisions .............................................. 631

1. Repeal of inclusion based on withdrawal of previously excluded subpart F income from qualified investment (sec. 4201 of the House bill, sec. 14213 of the Senate amendment, and sec. 955 of the Code) ............................................. 631

2. Repeal of treatment of foreign base company oil related income as subpart F income (sec. 4202 of the House bill, sec. 14211 of the Senate amendment, and sec. 954(a) of the Code) .................................................................................. 631 VerDate Sep 11 2014 09:40 Dec 17, 2017 Jkt 027788 PO 00000 Frm 00014 Fmt 5904 Sfmt 0483 E:\HR\OC\HR466.XXX HR466 SSpencer on DSKBBXCHB2PROD with REPORTS

Page XIII INTERNATIONAL TAX PROVISIONS—Continued

3. Inflation adjustment of de minimis exception for foreign base company income (sec. 4203 of the House bill, sec. 14212 of the Senate amendment, and sec. 954(b)(3) of the Code) ......................................................................................... 632 4. Look-thru rule for related controlled foreign corporations made permanent (sec. 4204 of the House bill, sec. 14217 of the Senate amendment, and sec. 954(c)(6) of the Code) .. 632

5. Modification of stock attribution rules for determining CFC status (sec. 4205 of the House bill, sec. 14214 of the Senate amendment, and secs. 318 and 958 of the Code) .................. 633

6. Modification of definition of United States shareholder (sec. 14215 of the Senate amendment and sec. 951 of the Code) 634

7. Elimination of requirement that corporation must be controlled for 30 days before subpart F inclusions apply (sec. 4206 of the House bill, sec. 14216 of the Senate amendment, and sec. 951(a)(1) of the Code) .................................... 634

8. Current year inclusion of foreign high return amounts or global intangible low-taxed income by United States shareholders (sec. 4301 of the House bill, sec. 14201 of the Senate amendment, and secs. 78 and 960 and new sec. 951A of the Code) .................................................................... 635

9. Limitation on deduction of interest by domestic corporations which are members of an international group (sec. 4302 of the House bill, sec. 14221 of the Senate amendment, and new sec. 163(n) of the Code) ........................................... 645 E. Prevention of Base Erosion .............................................................. 649

1. Base erosion using deductible cross-border payments between affiliated companies (sec. 4303 of the House bill and new secs. 4491 and 6038E of the Code; sec. 14401 of the Senate amendment and secs. 6038A and 6038C and new secs. 59A and 59B of the Code) ............................... 649

2. Limitations on income shifting through intangible property transfers (sec. 14222 of the bill and secs. 367, 482, and 936 of the Code) ....................................................................... 661

3. Certain related party amounts paid or accrued in hybrid transactions or with hybrid entities (sec. 14223 of the Senate amendment and sec. 267A of the Code) .......................... 662

4. Shareholders of surrogate foreign corporations not eligible not eligible for reduced rate on dividends (sec. 14225 of the Senate amendment and sec. 1 of the Code) .................... 664

F. Provisions Related to the Possessions of the United States .......... 664

1. Extension of deduction allowable with respect to income attributable to domestic production activities in Puerto Rico (sec. 4401 of the House bill and sec. 199 of the Code) . 664

2. Extension of temporary increase in limit on cover over of rum excise taxes to Puerto Rico and the Virgin Islands (sec. 4402 of the House bill and sec. 7652(f) of the Code) .... 666

3. Extension of American Samoa economic development credit (sec. 4403 of the House bill and sec. 119 of Pub. L. No. 109–432) ................................................................................... 667

G. Other International Reforms ........................................................... 669

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Page XIV INTERNATIONAL TAX PROVISIONS—Continued

1. Restriction on insurance business exception to the passive foreign investment company rules (sec. 4501 of the House bill, sec. 14502 of the Senate amendment, and sec. 1297 of the Code) .............................................................................. 669 2. Repeal of fair market value of interest expense apportionment (sec. 14503 of the Senate amendment and sec. 864 of the Code) .............................................................................. 672

3. Modification to source rules involving possessions (sec. 14504 of the Senate amendment and sec. 865 of the Code) 672 TITLE II—JOINT EXPLANATORY STATEMENT .............................................. 675

CONGRESSIONAL EARMARKS, LIMITED TAX BENEFITS, AND LIMITED TARIFF BENEFITS ............................................................................................. 676

TAX COMPLEXITY ANALYSIS ............................................................................ 676 

Audience

Members of Congress, tax advisors and preparers, accountants, IRS officals and agents, U.S taxpayers

Product Details

Availability Details:
Backordered
USA Price:
$80.00
International Price:
$112.00
Publisher:
Congress, Committee on Conference or Treasury Dept., Internal Revenue Service
Year/Pages:
2018: 440 p.
Key Phrases:
  • Job Creation
  • Taxation
  • Tax Reform
Weight:
3.0625
Quantity Price:
Discount
Cover:
Paper
Unit of Issue (US):
1
Unit of Issue (Non-US):
1
Item available Date:
01/08/2018
Last Status Update:
04/10/2018
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