article: SECTION 1. SHORT TITLE. This Act may be cited as the ``Higher Education Family Opportunity Act of 1998''. SEC. 2. DEDUCTION FOR POSTSECONDARY TUITION AND RELATED EXPENSES IN LIEU OF HOPE AND LIFETIME LEARNING CREDIT. (a) In General.--Part VII of subchapter B of chapter 1 of the Internal Revenue Code of 1986 (relating to additional itemized deductions for individuals) is amended by redesignating section 222 as section 223 and by inserting after section 221 the following new section: ``SEC. 222. DEDUCTION FOR POSTSECONDARY TUITION AND RELATED EXPENSES IN LIEU OF HOPE AND LIFETIME LEARNING CREDIT. ``(a) Allowance of Deduction.--In the case of an individual, there shall be allowed as a deduction for the taxable year an amount equal to the qualified tuition and related expenses paid or incurred by such individual. ``(b) Limitation.-- ``(1) In general.--The amount allowable as a deduction under subsection (a) for a taxable year shall not exceed the deductible limit for each eligible student. ``(2) Deductible limit.--For purposes of paragraph (1), the deductible limit for a taxable year shall be determined in accordance with the following table: ``Taxable years beginning in calendar year: Deductible limit: 1999................................................... $5,000 2000................................................... $5,500 2001................................................... $6,000 2002................................................... $6,500 2003................................................... $7,000 2004................................................... $7,500 2005................................................... $8,000 2006................................................... $8,500 2007................................................... $9,000 2008................................................... $9,500 2009 and thereafter....................................$10,000. ``(c) Qualified Tuition and Related Expenses; Eligible Student.-- The terms `qualified tuition and related expenses' and `eligible student' shall have the same meanings given to such terms by section 25A. ``(d) Applicable Rules.--For purposes of this section, rules similar to the rules of section 25A(g) shall apply.''. (b) Deduction Not a Miscellaneous Itemized Deduction.--Subsection (b) of section 67 of such Code (relating to miscellaneous itemized deductions) is amended by striking ``and'' at the end of paragraph (11), by striking the period at the end of paragraph (12) and inserting ``, and'', and by adding at the end the following new paragraph: ``(13) the deduction under section 222 (relating to deduction for postsecondary tuition and related expenses in lieu of Hope and Lifetime Learning credit).''. (c) Conforming Amendments.-- (1) Subparagraph (B) of section 72(t)(7) of such Code is amended by inserting ``or 222(e)(2), as the case may be'' after ``section 25A(g)(2)''. (2) Paragraph (2) of section 135(d) of such Code is amended by inserting ``or 222, as the case may be,'' after ``section 25A''. (3) Paragraph (2) of section 221(e) of such Code is amended by striking ``and'' after subparagraph (A), by striking the period at the end of subparagraph (B) and inserting ``, and'', and by inserting after subparagraph (B) the following new subparagraph: ``(C) the amount allowed as a deduction under section 222.''. (4) Paragraph (2) of section 6213(g) of such Code is amended-- (A) by striking ``and'' at the end of subparagraph (J) (as added by section 201(b) of the Taxpayer Relief Act of 1997), (B) by redesignating subparagraph (J) (as added by section 1085(a)(3) of the Taxpayer Relief Act of 1997) as subparagraph (K) and by striking the period at the end of such subparagraph and inserting ``, and'', and (C) by adding at the end the following new subparagraph: ``(L) an omission of a correct TIN required under section 222(e)(1) (relating to higher education tuition and related expenses) to be included on a return.''. (d) Clerical Amendment.--The table of sections for part VII of subchapter B of chapter 1 of such Code is amended by striking the last item and inserting the following new items: ``Sec. 222. Deduction for postsecondary tuition and related expenses in lieu of Hope and Lifetime Learning credit. ``Sec. 223. Cross reference.''. (e) Effective Date.--The amendments made by this section shall apply to expenses paid or incurred after December 31, 1998, for education furnished in academic periods beginning after such date.
summary: Higher Education Family Opportunity Act of 1998 - Amends the Internal Revenue Code to permit a deduction for qualified tuition and related expenses in lieu of the Hope and Lifetime Learning credits. Sets the deductible limit at $5,000 for 1999 and increases such limit by $500 annually until it reaches $10,000 for years 2009 and thereafter.