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.
 

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