Text: HF02405 Text: HF02407 Text: HF02400 - HF02499 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN
1 1 Section 1. Section 422.7, Code Supplement 1995, is amended
1 2 by adding the following new subsection:
1 3 NEW SUBSECTION. 35. a. Subtract, to the extent not
1 4 otherwise deducted, interest paid on loans where the loan
1 5 proceeds are used for investment purposes other than an
1 6 investment in a passive activity of the taxpayer, as defined
1 7 in section 469(c) of the Internal Revenue Code.
1 8 b. Add the amount deducted under paragraph "a" for a prior
1 9 tax year which is deducted in computing the adjusted gross
1 10 income for the current tax year.
1 11 Sec. 2. This Act, being deemed of immediate importance,
1 12 takes effect upon enactment and applies retroactively to
1 13 January 1, 1996, for tax years beginning on or after that
1 14 date.
1 15 EXPLANATION
1 16 The bill allows for an individual taxpayer to deduct for
1 17 state individual income tax purposes the interest paid on
1 18 moneys borrowed by the taxpayer for investment purposes other
1 19 than an investment in a trade or business of the taxpayer in
1 20 which the taxpayer does not materially participate. Under
1 21 federal law, this interest is only deducted to the extent of
1 22 investment income. The amount of interest in excess of
1 23 investment income is carried forward and may be deducted to
1 24 offset investment income in a subsequent tax year. When this
1 25 is done the bill provides that this amount is not again
1 26 allowed as a deduction for state tax purposes.
1 27 The bill takes effect upon enactment and applies
1 28 retroactively to tax years beginning on or after January 1,
1 29 1996.
1 30 LSB 4159YH 76
1 31 mg/sc/14
Text: HF02405 Text: HF02407 Text: HF02400 - HF02499 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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