Prior to joining EPI, Hungerford worked at the General Accounting Office, the Office of Management and Budget, the Social Security Administration, and the Congressional Research Service. He has published research articles in journals such as the Review of Economics and Statistics, Journal of International Economics, Journal of Human Resources, Journal of Urban Economics, Review of Income and Wealth, Journal of Policy Analysis and Management, Challenge, and Tax Notes. He has taught economics at Wayne State University, American University, and Johns Hopkins University. He has a Ph.D. in economics from the University of Michigan. 30, at 21 (“A President with the power to veto items in appropriation bills might exercise a good restraining influence in cutting down the total annual expenses of the government. But this is not the right way”).
What is the Taxpayer Relief Act of 1997?
Taxpayer Relief Act of 1997 - Title I: Child Tax Credit - Amends the Internal Revenue Code (IRC) to allow a tax credit of up to $500 dollars for each qualifying child of a taxpayer, beginning in taxable years starting after December 31, 1997.
111–148, set out as a note under section 1 of this title. 16Poterba (1984, 1991) discusses the link between house prices and the real after-tax cost of homeownership. 13I control for city fixed effects rather than ZIP code fixed effects in the main regression https://turbo-tax.org/taxpayer-relief-act-of-1997-definition/ model because cities and towns are the effective jurisdictions. For example, property taxes are collected at the city/town level. In a robustness check not shown here, I control for ZIP code fixed effects instead and the results are almost identical.
PL 105-78 Depts. of Labor, HHS and Education, and Related Agencies Appropriations Act, 1998 (enacted 11/13/
Under current law, self-employed individuals can deduct 40% of the cost of their health insurance premiums. Under TRA97, the deductible percentage will gradually increase over the next ten years (in 5 or 10% increments), so that, by 2007, the entire premiums will be deductible. See 143 U.S., at 686—687 (discussing Act of Jan. 7, 1824, ch. 4, §4, 4 Stat. 3, and Act of May 24, 1828, ch. 111, 4 Stat. 308).37 A slightly different statute, Act of May 31, 1830, ch. 425, provided that certain statutory provisions imposing duties on foreign ships “shall be repealed” upon the same no-discrimination determination by the President. See 143 U.S., at 687; see also id., at 686 (discussing similar tariff statute, Act of Mar. 3, 1815, ch. 77, 3 Stat. 224, which provided that duties “are hereby repealed,” “[s]uch repeal to take effect … whenever the President” makes the required determination).
- This bill was ultimately vetoed by President Bush.
- Third, it allowed home sellers to exclude housing capital gains of $500,000 (or $250,000 for single filers) if they have owned and lived in their homes for at least two years of the previous five years.
- A corporate underpayment is considered "large" if it exceeds $100,000.
- A higher after-tax wage (due to, say, a tax reduction) increases the price of leisure.
- Its magnitude implies that a $10,000 increase in capital gains taxes reduces the semiannual home sales rate by 0.1 percentage points, or 6% from the average sales rate in the post-TRA97 sample.
- 117–2, set out as a note under section 21 of this title.
Election for 1987 Partnerships to Continue Exception from Treatment of Publicly Traded Partnerships as Corporations
The Omnibus Budget Reconciliation Act of 1987 added a provision to the Internal Revenue Code (the "Code") under which "publicly traded partnerships" are required to be treated as corporations. Two broad exceptions to this rule exist. First, partnerships that derive at least 90% of their gross income from "passive-type" sources, including https://turbo-tax.org/ interest, dividends, and real property rents, are not treated as corporations under this provision. Second, partnerships that were already publicly traded on December 17, 1987, were "grandfathered" for a period of ten years, regardless of the nature of their gross income, as long as they did not add a substantial new line of business. This "grandfather" protection has been scheduled to expire for taxable years beginning after December 31, 1997.
The Tax Policy Center's
What is the tax benefit of the tuition and fees deduction? The tuition and fees deduction can reduce the amount of your income subject to tax by up to $4,000. There are also limits to your adjusted gross income which may influence the amount of a deduction you may take. The amount of your deduction will be gradually reduced if your modified adjusted gross income is between $55,000 and $70,000 ($110,000 and $140,000 if you file a joint return).
- Exemptions for the taxpayer have been in the tax code since the beginning of the individual income tax.
- After 1997, the semi-annual sales rate of these houses increased by 0.40–0.62 percentage points, or 19–24% from the pre-TRA97 baseline levels.
- The vertical bars connect the maximum and minimum appreciation rates, and the circles indicate the appreciation rates averaged across the 26 ZIP codes at each point of time.
- First, the roll-over rule prior to TRA97 allowed home sellers to postpone capital gains.
- Under TRA97, the deductible percentage will gradually increase over the next ten years (in 5 or 10% increments), so that, by 2007, the entire premiums will be deductible.
These tax credits can be thought of as government transfers, part of which is used to pay income tax liability (the nonrefundable part) and the rest available for consumption or saving (the refundable part). Adding the amount of the EITC and CTC to family income reduced the number of people in poverty by almost six million in 2011 (according to the authors’ analysis of March 2012 Current Population Survey data). Over half of the individuals moved above the poverty threshold were children. Taxes and tax provisions can change taxpayer behavior by introducing incentives or disincentives. The EITC and CTC affect the monetary rewards to working and having children.
PL 105-264 Travel and Transportation Reform Act of 1998 (enacted 10/19/
A RIC organized as a corporate trust is exempt from the Massachusetts personal income tax at the entity level, provided it qualifies under § 851 of the Code as defined in chapter 62. A literal reading of the statute may require that RICs organized as corporate trusts must continue to comply with RIC requirements in effect as of January 1, 1988, in order to continue to qualify for an exemption from Massachusetts taxation under § 8(b)(i). Thus, under this literal interpretation, corporate trusts could not take advantage of the new federal rules if they wish to retain their status as RICs for Massachusetts purposes. (2)
A similar Code update issue arises with respect to RIC shareholders.
- This tax provision, unofficially called the “roll-over rule,” had been in the Internal Revenue Code since 1951.
- See, for example, Deaton and Muellbauer (1980).
- A publicly traded partnership that makes this election will nevertheless be treated as a corporation commencing on any day on which it adds a substantial new line of business.
- In late January or early February, you will receive Form 1098T from the State University of New York.
- This restriction would apply regardless of whether a RIC is subject to the jurisdiction of Massachusetts.
The estimation results suggest that a $10,000 increase in tax liability reduces the semiannual sales rate by 0.1–0.2 percentage points, or 6–13% from the average sales rate in the post-TRA97 sample. Both the EITC and CTC reduce the tax liability of eligible taxpayers and, consequently, reduce tax revenue. The Joint Committee on Taxation (2013) estimates that the earned income tax credit reduced federal tax revenue by $59.0 billion in fiscal 2012 and will reduce tax revenue by $325.9 billion between fiscal 2013 and 2017 (see Table 2). The forgone tax revenue from the child tax credit is estimated to have been $56.8 billion in fiscal 2012. In comparison, fiscal 2012 outlays for the main federal family assistance program—Temporary Assistance for Needy Families—was $16.1 billion, while outlays for food stamps (now called the Supplemental Nutrition Assistance Program) were $80.0 billion. In contrast, forgone tax revenue from two tax provisions primarily benefiting higher-income taxpayers—the exclusion of pension contributions and earnings, and the reduced tax rates on capital gains and dividends—amounted to over $200 billion in fiscal 2012.
Your Responsibility as a Taxpayer
The issuer of a debt instrument is generally allowed a deduction for interest paid or accrued on that debt instrument and the holder of a debt instrument is required to include the interest in income. If a debt instrument is issued with "original issue discount," or "OID" (which may in some cases include all or a portion of the stated interest on the instrument), the issuer and holder will generally account for the OID on the accrual method, regardless of their respective overall methods of accounting. The issuer of an equity interest, by contrast, cannot generally deduct dividends paid with respect to that interest, but a corporate holder of stock in another corporation may be entitled to a "deduction for dividends received" that lowers the effective rate of tax on dividend income. In order to prevent the manipulation of these rules, the tax law has long contained nonstatutory doctrines under which the Internal Revenue Service may attempt to recharacterize purported debt instruments in some cases, such as "thin capitalization," as equity.
Rollover of Gain from Sale of Qualified Stock
Prior to the 1997 Act, the maximum Federal income tax rate applicable to capital gains of noncorporate taxpayers was generally 28%. However, the Revenue Reconciliation Act of 1993 (the "1993 Act") created a preferential maximum tax rate of only 14% for noncorporate taxpayers in the case of certain sales of stock in small, start-up enterprises; the 1993 Act achieved this by allowing the taxpayer to exclude 50% of the gain from income. In order to qualify for this special rate, the stock has to have been acquired by the taxpayer after December 31, 1992, and at its original issuance and has to be held for more than five years.
111–148 applicable to taxable years beginning after Dec. 31, 2009, see section 10909(d) of Pub. Amendment by section 1401(d)(3) of Pub. 111–148, as added by section 10105(d) of Pub.
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