PUBLIC LAW 105-34—AUG. 5, 1997 111 STAT. 951 "(I) in the case of an individual, losses of property arising from fire, storm, shipwreck, or other casualty, or from theft, "(II) in the case of a taxpayer which is a small business, net operating losses attributable to Presidentially declared disasters (as defined in section 1033(h)(3)), and "(III) in the case of a taxpayer engaged in the trade or business of farming (as defined in section 263A(e)(4)), net operating losses attributable to such Presidentially declared disasters, "(iii) SMALL BUSINESS.— For purposes of this subparagraph, the term 'small business' means a corporation or partnership which meets the gross receipts test of section 448(c) for the taxable year in which the loss arose (or, in the case of a sole proprietorship, which would meet such test if such proprietorship were a corporation).", (c) EFFECTIVE DATE. —The amendments made by this section 26 USC 172 note. shall apply to net operating losses for taxable years beginning after the date of the enactment of this Act. SEC. 1083. MODIFICATIONS TO TAXABLE YEARS TO WHICH UNUSED CREDITS MAY BE CARRIED. (a) IN GENERAL. —Section 39(a) (relating to unused credits) is amended— (1) in paragraph (1), by striking "3" each place it appears and inserting "1" and by striking "15" each place it appears and inserting "20"; and (2) in paragraph (2), by striking "18" each place it appears and inserting "22" and by striking "17" each place it appears and inserting "21". (b) EFFECTIVE DATE.— The amendments made by this section 26 USC 39 note. shall apply to credits arising in taxable years beginning after December 31, 1997. SEC. 1084. EXPANSION OF DENIAL OF DEDUCTION FOR CERTAIN AMOUNTS PAID IN CONNECTION WITH INSURANCE. (a) DENIAL OF DEDUCTION FOR PREMIUMS.— (1) IN GENERAL.— Paragraph (1) of section 264(a) is amended to read as follows: "(1) Premiums on emy life insurance policy, or endowment or annuity contract, if the taxpayer is directly or indirectly a beneficiary under the policy or contract.". (2) EXCEPTIONS.— Section 264 is amended by redesignating subsections (b), (c), and (d) as subsections (c), (d), and (e), respectively, and by inserting after subsection (a) the following new subsection: "(b) EXCEPTIONS TO SUBSECTION (a)(1). —Subsection (a)(1) shall not apply to— "(1) any annuity contract described in section 72(s)(5), and "(2) any annuity contract to which section 72(u) applies.". (b) INTEREST ON POLICY LOANS. — (1) IN GENERAL.— Paragraph (4) of section 264(a) is amended by striking "individual, who" and all that follows and inserting "individual. ".
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