Individual Tax Reduction and Tax Reform Act

Individual Tax Reduction and Tax Reform Act - Authorizes the individual taxpayer to elect a $250 credit against income tax in lieu of the deduction for personal exemptions under the Internal Revenue Code.

Repeals the percentage depletion allowance for all oil and gas wells except for those gas wells located in the northern quadrisphere. Exempts that part of the taxpayer's average daily production of crude oil in the northern quadrisphere that does not exceed $3,000 barrels.

Provides for a reduction in the amount allowed as foreign tax for purposes of computation of the foreign tax credit.

Provides a formula for the recapture of foreign oil-related loss by treating that portion of foreign oil-related income equal to the amount of such loss up to 50 percent of the foreign oil-related income for the succeeding taxable year as income from sources within (and not from without) the United States.

Disqualifies from Domestic International Sales Corporation treatment those DISC corporations which are partly owned by corporations not presently qualified as Domestic International Sales Corporations.

Imposes (in lieu of the present minimum tax) a tax equal to the tax which would be imposed on an individual if his taxable income were an amount equal to one-half of his adjusted economic income. Defines adjusted economic income as the adjusted gross income for the taxable year, plus an amount equal to the items of tax preference, minus: (1) the investment expense adjustment; (2) extraordinary medical expenses; (3) extraordinary casualty losses, and (4) the charitable contribution adjustment. Defines the above listed items for the purposes of this Act. Provides an exemption of $20,000 minus the excess of adjusted economic income over $20,000 from this minimum tax.