A bill to provide a limit on tax preferences and for the allocation of deductions.

Includes the amount of disallowed tax preferences as gross income under the Internal Revenue Code. Defines the amount of disallowed tax preferences as the amount by which the sum of the items of tax preference exceeds the limit on tax preferences.

Identifies tax preferences as charitable contributions of appreciated property, accelerated depreciation, interest on various governmental obligations, farm losses, and capital gains.

Limits tax preferences to an amount equal to the greater of one-half of the sum of the items of tax preference and the adjusted gross income computed as specified; or $10,000.

Provides that when disallowed tax preferences are included in gross income, the amount shall be allowed as a deduction in each of the five succeeding taxable years.

States that if a taxpayer has allocable expenses for a taxable year, the deduction otherwise allowable under this Act for such expenses shall be disallowed to the extent of an amount equal to the lesser of the aggregate of such expenses multiplied by a specified fraction, or the allowable tax preference.

Defines, for purposes of determining allocable deductions, the nature of allocable expenses and allowable tax preferences (including depletion and intangible drilling and development costs).