- 58 -
Interest subject to the limitation
Under the bill, interest subject to the limitation
is all interest on debt not incurred in connection with
the taxpayer’s trade or business, other than debt
secured by the taxpayer’s residences (as described
above). Thus, interest subject to limitation generally
includes investment interest subject to the section
163(d) limitation under present law and consumer
interest, such as interest paid or incurred to purchase
an automobile for personal use. * * * [Id. at 299-300.]
The House of Representatives passed H.R. 3838 without
amendment to section 402 of H.R. 3838 as reported by the Ways and
Means Committee.
(4) The Senate’s Amendment
H.R. 3838 was received in the Senate on December 18, 1985,
and referred to the Finance Committee. Section 1421 of H.R. 3838
as reported by the Finance Committee separated the above-noted
considerations--investment interest and “consumer” interest.
Section 1421(b) of the Finance Committee’s amendment revised
section 163(d) but, unlike the House-passed bill, left that Code
provision as one dealing with investment interest. Section
1421(a) of the Finance Committee’s amendment proposed a new
section 163(h), which provided in pertinent part as follows:
SEC. 1421. LIMITATIONS ON DEDUCTION FOR NONBUSINESS
INTEREST.
(a) Disallowance of Deduction for Consumer 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:
Page: Previous 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 NextLast modified: May 25, 2011