Sec. 910. MODIFICATION OF ADJUSTED GROSS INCOME DEFINITION FOR EARNED INCOME CREDIT
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## SEC. 910 MODIFICATION OF ADJUSTED GROSS INCOME DEFINITION FOR EARNED INCOME CREDIT ###
(a)In General Subsections (a)(2)(B), (c)(1)(C), and (f)(2)(B) of section 32 of the Internal Revenue Code of 1986 are each amended by striking “adjusted gross income” each place it appears and inserting “modified adjusted gross income”. ###
(b)Modified Adjusted Gross Income Defined Section 32(c) of such Code (relating to definitions and special rules) is amended by adding at the end the following new paragraph: > > #### “(5) Modified adjusted gross income > > > ##### “(A) In general > > The term ‘**modified adjusted gross income**’ means adjusted gross income determined without regard to the amounts described in subparagraph (B). > > > ##### “(B) Certain amounts disregarded > > An amount is described in this subparagraph if it is— > > > ###### “(i) > > the amount of losses from sales or exchanges of capital assets in excess of gains from such sales or exchanges to the extent such amount does not exceed the amount under section 1211(b)(1), > > > ###### “(ii) > > the net loss from estates and trusts, > > > ###### “(iii) > > the excess (if any) of amounts described in subsection (i)(2)(C)(ii) over the amounts described in subsection (i)(2)(C)(i) (relating to nonbusiness rents and royalties), and > > > ###### “(iv) > > 50 percent of the net loss from the carrying on of trades or businesses, computed separately with respect to— > > > ###### “(I) > > trades or businesses (other than farming) conducted as sole proprietorships, > > > ###### “(II) > > trades or businesses of farming conducted as sole proprietorships, and > > > ###### “(III) > > other trades or businesses. > > For purposes of clause (iv), there shall not be taken into account items which are attributable to a trade or business which consists of the performance of services by the taxpayer as an employee.” > . ###
(c)Effective Dates **[**[26 U.S.C. 32 note](/us/usc/t26/s32)**]** ####
(1)In general Except as provided in paragraph (2), the amendments made by this section shall apply to taxable years beginning after December 31, 1995. ####
(2)Advance payment individuals In the case of any individual who on or before June 26, 1996, has in effect an earned income eligibility certificate for the individual's taxable year beginning in 1996, the amendments made by this section shall apply to taxable years beginning after December 31, 1996.
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Sec. 910
MODIFICATION OF ADJUSTED GROSS INCOME DEFINITION FOR EARNED INCOME CREDIT
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