Summary
Taxpayer Relief Act of 1997
The newly-approved Taxpayer Relief Act of 1997 features several tax breaks, simplifications, technical corrections, extensions and revenue-earning provisions. However, application of the tax law, which was signed by Pres Bill Clinton on aug 5, 1997, remains confusing. It introduces about 300 new provisions as well as 800 amendments to the Internal Revenue Code. Provisions that will most likely be encountered, including changes in tax rates, effective dates and phase-in or phase-out rules, are explained.See the full content of this document
Extract
Making sense of the Taxpayer Relief Act of 1997.
The Taxpayer Relief Act of 1997 (the Act) was passed by an overwhelming bipartisan majority of Congress (Senate 92-8; House 389-43) and signed by the President on August 5. The word "relief" in the title of the act may be a misnomer; the new law contains numerous tax breaks, extensions, technical corrections, simplifications, and revenue-generating provisions, but figuring out how to apply them will be mind-boggling. The act contains over 800 Internal Revenue Code amendments and approximately 300 new provisions, many of which must be digested by practitioners before the filing season. The scramble for information and assimilation is underway.
This article will briefly discuss provisions in the legislation expected to be encountered most frequently in the upcoming filing season. Many of the changes are very complex, with different effective dates, different tax rates, and phase-in or phase-out rules that apply. Information in this summary is taken from CCH's Taxpayer Relief Act of 1997: Law and Explanation. Individuals Sale of Personal Residence The new law allows taxpayers who sell their personal residence to exclude up to $250,000 of gain ($500,000 for married filing jointly) for sales after May 6, 1997. The individual must have owned and occupied the home as a principal residence for an aggregate of at least two of the five years prior to the date of sale. The rollover provisions under Code Sec. 1034 and the one-time $125,000 exclusion for taxpayers age 55 or older are repealed. The exclu...See the full content of this document
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