100 STAT. 2246
PUBLIC LAW 99-514—OCT. 22, 1986
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"(i) the applicable percentage of the amount which „,^^. ^ (without regard to this paragraph) is not allowed as a deduction under this subsection for the taxable year to ^^.,,;, _ the extent such amount does not exceed the ceiling ^ amount, "(ii) the amount which (without regard to this paragraph) is not allowed as a deduction under this subsec-,. _, tion in excess of the ceiling amount, plus "(iii) the amount of any carryforward to such taxable , §{'•'• ^^^^ under paragraph (2) with respect to which a deduction was disallowed under this subsection for a '|.^.. preceding taxable year. For purposes of this subparagraph, the amount under f., clause (i) or (ii) shall be computed without regard to the amount described in clause (iii). "(B) APPLICABLE PERCENTAGE.—For purposes of this paragraph, the applicable percentage shall be determined in ,. accordance with the following table:
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"In the case of taxable years beginning in: 1987 1988 1989 1990
The applicable percentage is: 35 60 80 90.
"(C) CEILING AMOUNT.—For purposes of this paragraph, ^, n..^... ^j^^ term 'ceiling amount' means— "(i) $10,000 in the case of a taxpayer not described in clause (ii) or (iii), "(ii) $5,000 in the case of a married individual filing a separate return, and "(iii) zero in the case of a trust." (b)
DISALLOWANCE OF DEDUCTION FOR PERSONAL INTEREST OF
INDIVIDUALS.—Section 163 (relating to deduction for interest) is amended by redesignating subsection (h) as subsection (i) and by inserting after subsection (g) the following new subsection: "(h) DISALLOWANCE OF DEDUCTION FOR PERSONAL INTEREST.—
"(1) IN GENERAL.—In the case of a taxpayer other than a corporation, no deduction shall be allowed under this chapter for personal interest paid or accrued during the taxable year. ' f V "(2) PERSONAL INTEREST.—For purposes of this subsection, the ^^ term 'personal interest' means any interest allowable as a V- ^' deduction under this chapter other than— "(A) interest paid or accrued on indebtedness incurred or continued in connection with the conduct of a trade or .0n f business (other than the trade or business of performing services as an employee), , -' "(B) any investment interest (within the meaning of subsection (d)), "(C) any interest which is taken into account under section 469 in computing income or loss from a passive activity of the taxpayer, "(D) any qualified residence interest (within the meaning '"' of paragraph (3)), and "(E) any interest payable under section 6601 on any -"' "* unpaid portion of the tax imposed by section 2001 for the period during which an extension of time for payment of such tax is in effect under section 6163 or 6166.
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