Text: HF00182 Text: HF00184 Text: HF00100 - HF00199 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN
1 1 Section 1. Section 422.7, Code 1997, is amended by adding
1 2 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. APPLICABILITY AND EFFECTIVE DATES. This Act,
1 12 being deemed of immediate importance, takes effect upon
1 13 enactment and applies retroactively to January 1, 1997, for
1 14 tax years beginning on or after that 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 for
1 24 federal tax purposes to offset investment income in a
1 25 subsequent tax year. When this is done the bill provides that
1 26 this amount is not again allowed as a deduction for state tax
1 27 purposes.
1 28 The bill takes effect upon enactment and applies
1 29 retroactively to tax years beginning on or after January 1,
1 30 1997.
1 31 LSB 1896HH 77
1 32 mg/sc/14
Text: HF00182 Text: HF00184 Text: HF00100 - HF00199 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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