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C. Interest Deduction Limitation
No deduction is allowed for personal interest
(such as interest on car loans or credit card balances
for personal expenditures). Interest on underpayments
of tax (other than certain deferred estate taxes) is
treated as personal interest under the provision. * * *
[Joint Committee Summary at 18.]
The conference committee report (H. Conf. Rept. 99-841,
supra, 1986-3 C.B. (Vol. 4) 1) was published on September 18,
1986. Section 511 of the conference committee report corresponds
to section 1421 of H.R. 3838 as passed by the Senate. In large
part, section 511(b) of the conference committee report tracks
section 1421(a) of H.R. 3838 as passed by the Senate. Section
511(b) of the conference committee report presents a new section
163(h), which provides in pertinent part as follows:
(h) Disallowance of Deduction for Personal Interest.--
(1) In general.--In the case of a
taxpayer other than a corporation, no
deduction shall be allowed under this chapter
for personal interest paid or accrued during
the taxable year.
(2) Personal interest.–-For purposes of
this subsection, the term “personal interest”
means any interest allowable as a deduction
under this chapter other than--
(A) interest paid or accrued on indebtedness
incurred or continued in connection with the
conduct of a trade or business (other than the
trade or business of performing services as an
employee),
(B) any investment interest (within the
meaning of subsection (d)),
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