A bill to amend the Internal Revenue Code of 1954 to exclude certain interest received by individuals from gross income.

Amends the Internal Revenue Code to exclude from the gross income of individual taxpayers specified amounts of dividends received from domestic corporations and interest income earned on deposits with financial institutions and on certain debt instruments. Limits the amount of such exclusion to $500 ($1,000 for joint returns), plus 25 percent of the interest and dividends which are not otherwise eligible for the exclusion. Phases in the $500 maximum exclusion in $100 yearly increments, beginning with $200 in 1981.

Permits the exclusion of dividends distributed by real estate investment trusts.