Community Revitalization Tax Act of 1989

Community Revitalization Tax Act of 1989 - Amends Internal Revenue Code income tax accounting rules to treat rehabilitation investment credits and low-income housing credits as credits not derived from passive activities.

Revises the limitation on the general business credit to allow a maximum annual credit equal to the first $20,000 of an individual taxpayer's income tax liability plus 80 percent of any excess liability.

 
HR 796 IH
101st CONGRESS
1st Session
 H. R. 796
To amend the Internal Revenue Code of 1986 to provide that certain credits
will not be subject to the passive activity rules, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
February 2, 1989
Mrs. KENNELLY (for herself, Mr. SCHULZE, Mr. RANGEL, Mr. GEPHARDT, Mr. DOWNEY,
Mr. MATSUI, Mr. FLIPPO, Mr. COYNE, Mr. ANDREWS, Mr. MOODY, Mrs. JOHNSON of
Connecticut, Mr. FOGLIETTA, Mr. ROWLAND of Connecticut, Mr. LEWIS of Georgia,
Mr. NEAL of Massachusetts, Mrs. MORELLA, Mr. HILER, Mrs. COLLINS, Mrs. MARTIN
of Illinois, Mr. FRANK, Mr. MAZZOLI, Mr. MARTINEZ, Mr. NOWAK, Mr. FASCELL,
Mrs. BENTLEY, Mr. MCHUGH, Mr. HAYES of Illinois, Mr. WOLPE, Mr. WALKER,
Ms. SCHNEIDER, Mr. MOAKLEY, Mr. MURPHY, Mr. TRAFICANT, Mr. ATKINS, Mr. GILMAN,
Mr. GEJDENSON, Mr. CHAPMAN, Mr. GRAY, Mr. HORTON, Mrs. VUCANOVICH, Mr. MCDADE,
Mr. GARCIA, Mr. RINALDO, Mr. SCHUMER, Mrs. BYRON, Mr. STUDDS, Mr. MAVROULES,
Mr. TOWNS, Mr. BORSKI, Mr. KOLTER, Mr. MORRISON of Connecticut, and Mr. SHAYS)
introduced the following bill; which was referred to the Committee on Ways
and Means
A BILL
To amend the Internal Revenue Code of 1986 to provide that certain credits
will not be subject to the passive activity rules, and for other purposes.
  Be it enacted by the Senate and House of Representatives of the United
  States of America in Congress assembled,
SECTION 1. SHORT TITLE.
  This Act may be cited as the `Community Revitalization Tax Act of 1989'.
SEC. 2. EXCEPTION FROM PASSIVE ACTIVITY RULES FOR REHABILITATION CREDIT AND
LOW-INCOME HOUSING CREDIT.
  (a) GENERAL RULE- Paragraph (2) of section 469(d) of the Internal Revenue
  Code of 1986 (defining passive activity credit) is amended by adding at
  the end thereof the following new sentence:
`For purposes of the preceding sentence, any rehabilitation investment credit
(within the meaning of section 48(o)) and any credit determined under section
42 shall be treated as a credit which is not from passive activities.'
  (b) CONFORMING AMENDMENTS-
  (1) Paragraph (3) of section 469(i) of such Code is amended by striking
  subparagraphs (B) and (C) and by redesignating subparagraph (D) as
  subparagraph (B).
  (2) Paragraph (6) of section 469(i) of such Code is amended by striking
  subparagraph (B) and by redesignating subparagraphs (C) and (D) as
  subparagraphs (B) and (C), respectively.
  (c) EFFECTIVE DATE- The amendments made by this section shall apply to
  property placed in service after December 31, 1988, in taxable years ending
  after such date.
SEC. 3. LIMITATION PROVISIONS OF GENERAL BUSINESS CREDIT MODIFIED WITH
RESPECT TO INDIVIDUALS.
  (a) IN GENERAL- Subparagraph (A) of section 38(c)(4) of the Internal Revenue
  Code of 1986 (relating to special rules for limitation of general business
  credit based on amount of tax) is amended to read as follows:
  `(A) INDIVIDUALS-
  `(i) IN GENERAL- Except as provided in clause (ii), in the case of an
  individual--
  `(I) the amount specified under subparagraph (B) of paragraph (1) shall
  be $20,000 in lieu of $25,000, and
  `(II) the percentage specified under subparagraph (B) of paragraph (1)
  shall be 80 percent in lieu of 25 percent.
  `(ii) MARRIED INDIVIDUALS FILING SEPARATELY- In the case of a husband
  or wife who files a separate return, clause (i)(I) shall be applied by
  substituting `$10,000' for `$20,000'. This clause shall not apply if the
  spouse of the taxpayer has no business credit carryforward or carryback
  to, and has no current year business credit for, the taxable year of such
  spouse which ends within or with the taxpayer's taxable year.'
  (b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to
  taxable years beginning after December 31, 1988.