[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 721 Introduced in House (IH)]
110th CONGRESS
1st Session
H. R. 721
To amend the Internal Revenue Code of 1986 to allow a deduction for
qualified timber gains.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 30, 2007
Mr. Davis of Alabama (for himself, Mr. Brady of Texas, Mr. Norwood, Mr.
Jones of North Carolina, Mr. McHenry, Mr. Jindal, Mr. Thompson of
Mississippi, Mr. Reichert, Mr. Simpson, Mr. Crenshaw, Mr. Hall of
Texas, Mr. Smith of Washington, Mr. Baird, Mr. Inslee, Mr. Melancon,
Mr. Larsen of Washington, Mr. Berry, Mr. Manzullo, Mr. Sensenbrenner,
Mr. Sessions, Mr. Gallegly, Mr. McHugh, Mr. Conaway, Mr. Hastings of
Washington, Mr. Gordon of Tennessee, Mr. Blunt, Mr. Lewis of Kentucky,
Mr. Barton of Texas, Mr. Davis of Kentucky, Mr. Cuellar, Mr. Bonner,
Mr. Butterfield, Ms. Hooley, Mr. Bishop of Georgia, Mr. Brown of South
Carolina, Mr. Wilson of South Carolina, Mr. Alexander, Mr. Dicks, Mr.
Souder, Mr. Boustany, Mr. Petri, Mr. Hayes, Mr. DeFazio, Mr. Terry, Mr.
Boozman, Mr. Cantor, Mr. Bartlett of Maryland, Ms. Foxx, Mr. Marchant,
Mrs. Cubin, Mr. Ross, Mr. Gohmert, Mr. Aderholt, and Mr. Baker)
introduced the following bill; which was referred to the Committee on
Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to allow a deduction for
qualified timber gains.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Timber Tax Act of 2007''.
SEC. 2. DEDUCTION FOR QUALIFIED TIMBER GAIN.
(a) In General.--Part I of subchapter P of chapter 1 of the
Internal Revenue Code of 1986 is amended by adding at the end the
following new section:
``SEC. 1203. DEDUCTION FOR QUALIFIED TIMBER GAIN.
``(a) In General.--In the case of a taxpayer which elects the
application of this section for a taxable year, there shall be allowed
a deduction against gross income in an amount equal to 60 percent of
the lesser of--
``(1) the taxpayer's qualified timber gain for such year,
or
``(2) the taxpayer's net capital gain for such year.
``(b) Qualified Timber Gain.--For purposes of this section, the
term `qualified timber gain' means, with respect to any taxpayer for
any taxable year, the excess (if any) of--
``(1) the sum of the taxpayer's gains described in
subsections (a) and (b) of section 631 for such year, over
``(2) the sum of the taxpayer's losses described in such
subsections for such year.
``(c) Special Rules for Pass-Thru Entities.--In the case of any
qualified timber gain of a pass-thru entity (as defined in section
1(h)(10)), the election under this section shall be made separately by
each taxpayer subject to tax on such gain.''.
(b) Coordination With Maximum Capital Gains Rates.--
(1) Taxpayers other than corporations.--Paragraph (2) of
section 1(h) of the Internal Revenue Code of 1986 is amended to
read as follows:
``(2) Reduction of net capital gain.--For purposes of this
subsection, the net capital gain for any taxable year shall be
reduced (but not below zero) by the sum of--
``(A) the amount which the taxpayer takes into
account as investment income under section
163(d)(4)(B)(iii), and
``(B) the lesser of--
``(i) the amount described in paragraph (1)
of section 1203(a), or
``(ii) the amount described in paragraph
(2) of such section.''.
(2) Corporations.--Section 1201 of such Code is amended by
redesignating subsection (b) as subsection (c) and inserting
after subsection (a) the following new subsection:
``(b) Qualified Timber Gain Not Taken Into Account.--For purposes
of this section, in the case of a corporation with respect to which an
election is in effect under section 1203, the net capital gain for any
taxable year shall be reduced (but not below zero) by the corporation's
qualified timber gain (as defined in section 1203(b)).''.
(c) Deduction Allowed Whether or Not Individual Itemizes Other
Deductions.--Subsection (a) of section 62 of the Internal Revenue Code
of 1986 is amended by inserting before the last sentence the following
new paragraph:
``(22) Qualified timber gains.--The deduction allowed by
section 1203.''.
(d) Deduction Allowed in Computing Adjusted Current Earnings.--
Subparagraph (C) of section 56(g)(4) of the Internal Revenue Code of
1986 is amended by adding at the end the following new clause:
``(vii) Deduction for qualified timber
gain.--Clause (i) shall not apply to any
deduction allowed under section 1203.''.
(e) Deduction Allowed in Computing Taxable Income of Electing Small
Business Trusts.--Subparagraph (C) of section 641(c)(2) of the Internal
Revenue Code of 1986 is amended by inserting after clause (iii) the
following new clause:
``(iv) The deduction allowed under section
1203.''.
(f) Conforming Amendments.--
(1) Subparagraph (B) of section 172(d)(2) of the Internal
Revenue Code of 1986 is amended to read as follows:
``(B) the exclusion under section 1202 and the
deduction under section 1203 shall not be allowed.''.
(2) Paragraph (4) of section 642(c) of such Code is amended
by striking the first sentence and inserting the following:
``To the extent that the amount otherwise allowable as a
deduction under this subsection consists of gain described in
section 1202(a) or qualified timber gain (as defined in section
1203(b)), proper adjustment shall be made for any exclusion
allowable to the estate or trust under section 1202 and for any
deduction allowable to the estate or trust under section
1203.''
(3) Paragraph (3) of section 643(a) of such Code is amended
by striking the last sentence and inserting the following:
``The exclusion under section 1202 and the deduction under
section 1203 shall not be taken into account.''
(4) Subparagraph (C) of section 643(a)(6) of such Code is
amended to read as follows:
``(C) Paragraph (3) shall not apply to a foreign
trust. In the case of such a trust--
``(i) there shall be included gains from
the sale or exchange of capital assets, reduced
by losses from such sales or exchanges to the
extent such losses do not exceed gains from
such sales or exchanges, and
``(ii) the deduction under section 1203
shall not be taken into account.''.
(5) Paragraph (4) of section 691(c) of such Code is amended
by inserting ``1203,'' after ``1202,''.
(6) Paragraph (2) of section 871(a) of such Code is amended
by inserting ``or 1203'' after ``section 1202''.
(7) The table of sections for part I of subchapter P of
chapter 1 of such Code is amended by adding at the end the
following new item:
``Sec. 1203. Deduction for qualified timber gain.''.
(g) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to taxable years ending after the date of the enactment
of this Act.
(2) Taxable years which include date of enactment.--In the
case of any taxable year which includes the date of the
enactment of this Act, for purposes of the Internal Revenue
Code of 1986, the taxpayer's qualified timber gain shall not
exceed the excess that would be described in section 1203(b) of
such Code, as added by this section, if only dispositions of
timber after such date were taken into account.
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