Tax Reform Act

Tax Reform Act - Title I: Gain on Certain Property Transferred at Death or by Gift - Provides that in the case of the death of a taxpayer there shall be included in computing taxable income for the taxable period in which falls the date of his death, the gains and losses which would be taken into account if the taxpayer had sold all property, which is considered to have been acquired from or to have passed from the decedent taxpayer at a selling price equal to its fair market value at death. Makes exceptions to this provision for household or personal items whose total value is less than $2000, and for property which passes or has passed to surviving spouses. Sets forth rules applicable in determining the basis for computing gain or loss.

Makes provisions and rules for including gains and losses on lifetime property gifts in computing taxable income for the taxable period in which the transfer was made.

Requires the filing of a final income tax return for a decedent by April 15 of the year following the taxable year, or 9 months after the date of death, whichever is later. Makes provisions for extension of time for paying the tax.

Title II: State and Local Bonds - Allows a state or local government to elect to issue obligations without excluding their interest from gross income. Appropriates such sums as necessary out of moneys in the Treasury to pay a fixed percentage of interest yield on taxable issues, and sets forth procedures for such payment.

Title III: Foreign Corporations - Provides that if a foreign corporation is a controlling foreign corporation for an uninterrupted period of 30 days or more during any taxable year, every United States shareholder of such corporation who owns stock in such corporation on the last day in such year on which such corporation is a controlled foreign corporation shall include in its gross income for its taxable year its pro rata share of the corporation's earnings and profits for such year. Excludes from such shareholder's gross income any previously taxed earnings or profits from a foreign corporation.

Provides that such shareholders in foreign corporations may be required to maintain records and accounts for purposes of this section of the Act. Makes conforming amendments for this section.

Title IV: Minimum Tax for Tax Preferences - Imposes for each taxable year, with respect to the income of every person, a tax equal to 20 percent (previously 10 percent) of the amount by which the sum of the items of tax preference exceeds $30,000. Repeals the provision allowing a tax carryover for 7 taxable years for excess taxes.

Title V: Oil Depletion, Intangible Drilling and Development Costs - Repeals the authorization under which the Secretary of the Treasury may grant corporations the option to deduct as expenses intangible drilling and development costs in the case of oil and gas wells in computing taxable income. Permits the deduction where the intangible drilling and development costs are incurred in drilling a nonproductive well. Reduces the oil depletion allowance from 22 percent to 15 percent.