Summary: H.R.2735 — 102nd Congress (1991-1992)All Information (Except Text)

Bill summaries are authored by CRS.

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Passed House amended (07/21/1992)

Miscellaneous Revenue Act of 1992 - Title I: Miscellaneous Revenue Provisions - Subtitle A: Income Tax Provisions - Amends the Internal Revenue Code to prohibit the net earnings of certain civic leagues or local associations of employees from inuring to the benefit of private shareholders or individuals.

Increases the permissible shareholders of S corporations (small business corporations) from 35 to 50. Makes such corporations eligible for capital gain treatment when subdividing real property for sale.

Provides that the special rules applicable to the deferral of income and involuntary conversions relating to the sale of livestock on account of drought shall apply to other weather-related conditions.

Permits tax-exempt private foundations and community foundations to establish tax-exempt cooperative service organizations to operate exclusively for charitable purposes. Declares that the excise tax based on investment income applies to such organizations.

Assigns the rental of tuxedos a three-year recovery period for depreciation purposes.

Exempts personal service corporations which use an accrual method of accounting for their last taxable year ending before the date of enactment of this Act from restrictions on deducting year-end regular compensation paid to any employee who is not a key employee.

Allows the deduction of a certain amount of the distributive share of expenses for the production of income by a partner in a partnership for purposes of the alternative minimum tax.

Allows 50 percent of the income received by a tax-exempt telephone cooperative from a nonmember telephone company for performing communication services to be treated as collected from members of the cooperative for the sole purpose of meeting the losses and expenses of the telephone cooperative. (Current provisions require 85 percent of such income to be collected for such purpose.) Includes billing and collection services for a nonmember telephone company under such treatment. Allows such cooperatives to earn investment reserve income limited to a specified percentage of total income. Subjects a portion of such investment income to the unrelated business income tax.

Requires that the 85-percent test be determined without regard to cancellation of indebtedness income arising from the prepayment of a rural electric cooperative loan under the Rural Electrification Act of 1936.

Excludes from gross income discharge-of-indebtedness income from the cancellation of a loan made by an educational organization designed to encourage its students to serve in occupations with unmet needs or in areas with unmet needs. Makes such exclusion inapplicable if such discharge is on account of services performed for an employer and the employer directly or indirectly provides funds for such discharge.

Directs the Secretary of the Treasury to study semi-conductor manufacturing equipment to determine the appropriate recovery period and class life for such equipment for depreciation purposes. Requires a report to the House Committee on Ways and Means and the Senate Committee on Finance.

Subtitle B: Provisions Relating to Other Taxes - Amends the Internal Revenue Code and title II (Old Age, Survivors and Disability Insurance) of the Social Security Act to revise the employment tax treatment of certain crew members on fishing vessels with a crew of ten or fewer individuals.

Exempts from the firearms tax reloaded previously-used shells and cartridges supplied by the customer (or another customer) and returned to him or her in a type and quantity identical to the ones supplied.

Permits a qualified heir to rent estate property on a net cash basis to a lineal descendant of such heir or to the spouse of such a lineal descendant without triggering the special use valuation recapture tax.

Title II: Revenue Offsets - Repeals the special rule for rental use of a dwelling of less than 15 days (thus requiring a taxpayer to include all rental income without regard to the period of the rental).

Increases the casualty loss deductible from $100 to $500.