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residence of the taxpayer (to the extent of their fair
market values) is not subject to limitation.
* * * Consumer interest means interest not attributable
to a trade or business (other than the trade or business of
performing services as an employee) or to an activity
engaged in for profit.
* * * * * * *
Conference Agreement
The conference agreement follows the Senate amendment,
with modifications and clarifications.
* * * * * * *
Personal interest
The conference agreement follows the Senate amendment
provision with respect to consumer interest (denominated
personal interest under the conference agreement), with
modifications and clarifications.
Under the conference agreement, personal interest is
not deductible. Personal interest is any interest, other
than interest incurred or continued in connection with the
conduct of a trade or business (other than the trade or
business of performing services as a employee), investment
interest, or interest taken into account in computing the
taxpayer’s income or loss from passive activities for the
year. Personal interest also generally includes interest on
tax deficiencies.
Personal interest does not include qualified residence
interest of the taxpayer, nor does it include interest
payable on estate tax deferred under sec. 6163 or 6166. [H.
Conf. Rept. 99-841, at II-151 to II-154, supra, 1986-3 C.B.
(Vol. 4) at 151-154.]
In all material respects, section 511(b) as reported by the
conference committee was identical to section 511(b) of H.R. 3838
as ultimately enacted, on October 22, 1986. TRA 1986 sec.
511(b), Pub. L. 99-514, 100 Stat. 2085, 2246-2248, 2963.
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