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Section 119 of the bills provided that these amendments
“shall take effect as if included in the provision of the Reform
Act to which such amendment relates.”
On June 15, 1987, the staff of the Joint Committee on
Taxation released its Description of the Technical Corrections
Act of 1987 (H.R. 2636 and S. 1350) (JCS-15-87), June 15, 1987.
At pages 25 and 26, this staff pamphlet describes the above
amendments as follows:
Explanation of Provisions
Investment interest.–-The bill conforms the
language of the definition of investment interest to
the language of a related provision that allocates
interest expense to portfolio income under the passive
loss rule. Thus, under the bill, investment interest
is that which is properly allocable to property held
for investment. This change results in consistency in
the language of the provisions allocating interest
expense to the category of investment interest, and
permits consistent application of a standard for
allocation of interest. This change is not intended to
suggest the adoption of any particular method of
allocation, but rather to give Treasury the ability to
devise allocation rules as simple as possible
consistent with the objectives of the provision.
* * * * * * *
Personal interest.–-The bill conforms the language
of the definition of personal interest to the language
of related provisions (the passive loss rule and the
investment interest limitation) under which interest
expense may be allocated. Thus, the bill provides that
personal interest does not include interest that is
properly allocable to a trade or business. This change
results in consistency in the language of several
significant provisions under which interest is likely
to be allocated, and permits consistent application of
a standard for allocation of interest.
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