Internal Revenue Code:Sec. 68. Overall limitation on itemized deductions
From TaxAlmanac, A Free Online Resource
Note: You are using this website at your own risk, subject to our Disclaimer and Website Use and Contribution Terms.
From TaxAlmanac
(Redirected from Sec. 68. Overall limitation on itemized deductions)
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.
