article: SECTION 1. SHORT TITLE. This Act may be cited as the ``Historic Rehabilitation Tax Credit Expansion Act of 1993''. SEC. 2. TREATMENT OF REHABILITATION CREDIT UNDER PASSIVE ACTIVITY LIMITATIONS. (a) General Rule.--Paragraphs (2) and (3) of section 469(i) of the Internal Revenue Code of 1986 (relating to $25,000 offset for rental real estate activities) are amended to read as follows: ``(2) Dollar limitations.-- ``(A) In general.--Except as otherwise provided in this paragraph, the aggregate amount to which paragraph (1) applies for any taxable year shall not exceed $25,000 reduced (but not below zero) by 50 percent of the amount (if any) by which the adjusted gross income of the taxpayer for the taxable year exceeds $100,000. ``(B) Phaseout not applicable to low-income housing credit.--In the case of the portion of the passive activity credit for any taxable year which is attributable to any credit determined under section 42-- ``(i) subparagraph (A) shall not apply, and ``(ii) paragraph (1) shall not apply to the extent that the deduction equivalent of such portion exceeds-- ``(I) $25,000, reduced by ``(II) the aggregate amount of the passive activity loss (and the deduction equivalent of any passive activity credit which is not so attributable and is not attributable to the rehabilitation credit determined under section 47) to which paragraph (1) applies after the application of subparagraph (A). ``(C) $55,500 limit for rehabilitation credits.--In the case of the portion of the passive activity credit for any taxable year which is attributable to the rehabilitation credit determined under section 47-- ``(i) subparagraph (A) shall not apply, and ``(ii) paragraph (1) shall not apply to the extent that the deduction equivalent of such portion exceeds-- ``(I) $55,500, reduced by ``(II) the aggregate amount of the passive activity loss (and the deduction equivalent of any passive activity credit which is not so attributable) to which paragraph (1) applies for the taxable year after the application of subparagraphs (A) and (B). ``(3) Adjusted gross income.--For purposes of paragraph (2)(A), adjusted gross income shall be determined without regard to-- ``(A) any amount includable in gross income under section 86, ``(B) any amount excludable from gross income under section 135, ``(C) any amount allowable as a deduction under section 219, and ``(D) any passive activity loss.''. (b) Conforming Amendments.-- (1) Subparagraph (B) of section 469(i)(4) of such Code is amended to read as follows: ``(B) Reduction for surviving spouse's exemption.-- For purposes of subparagraph (A), the $25,000 amounts under paragraph (2)(A) and (2)(B)(ii) and the $55,500 amount under paragraph (2)(C)(ii) shall each be reduced by the amount of the exemption under paragraph (1) (determined without regard to the reduction contained in paragraph (2)(A)) which is allowable to the surviving spouse of the decedent for the taxable year ending with or within the taxable year of the estate.''. (2) Subparagraph (A) of section 469(i)(5) of such Code is amended by striking clauses (i), (ii), and (iii) and inserting the following: ``(i) `$12,500' for `$25,000' in subparagraphs (A) and (B)(ii) of paragraph (2), ``(ii) `$50,000' for `$100,000' in paragraph (2)(A)'', and ``(iii) `$27,750' for `$55,500' in paragraph (2)(C)(ii).''. (3) The subsection heading for subsection (i) of section 469 of such Code is amended by striking ``$25,000''. (c) Effective Date.--The amendments made by this section shall apply to property placed in service on or after May 5, 1993, in taxable years ending on or after such date. SEC. 3. REHABILITATION CREDIT ALLOWED TO OFFSET PORTION OF ALTERNATIVE MINIMUM TAX. (a) In General.--Section 38(c) of the Internal Revenue Code of 1986 (relating to limitation based on amount of tax) is amended by redesignating paragraph (2) as paragraph (3) and by inserting after paragraph (1) the following new paragraph: ``(2) Rehabilitation investment credit may offset portion of minimum tax.-- ``(A) In general.--In the case of the rehabilitation investment tax credit-- ``(i) this section and section 39 shall be applied separately with respect to such credit, and ``(ii) for purposes of applying paragraph (1) to such credit-- ``(I) the tentative minimum tax under subparagraph (A) thereof shall be reduced by the minimum tax offset amount determined under subparagraph (B) of this paragraph, and ``(II) the limitation under paragraph (1) (as modified by subclause (I)) shall be reduced by the credit allowed under subsection (a) for the taxable year (other than the rehabilitation investment tax credit). ``(B) Minimum tax offset amount.--For purposes of subparagraph (A)(ii)(I), the minimum tax offset amount is an amount equal to-- ``(i) in the case of a taxpayer not described in clause (ii), the lesser of-- ``(I) 25 percent of the tentative minimum tax for the taxable year, or ``(II) $20,000, or ``(ii) in the case of a C corporation other than a closely held C corporation (as defined in section 469(j)(1)), 5 percent of the tentative minimum tax for the taxable year. ``(C) Rehabilitation investment tax credit.--For purposes of this paragraph, the term `regular investment tax credit' means the portion of the credit under subsection (a) which is attributable to the credit determined under section 47.''. (b) Conforming Amendment.--Section 38(d) (relating to components of investment credit) is amended by adding at the end the following new paragraph: ``(4) Special rule for rehabilitation credit.-- Notwithstanding paragraphs (1) and (2), the rehabilitation investment tax credit (as defined in subsection (c)(2)(C)) shall be treated as used last.''. (c) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 1992.
summary: Historic Rehabilitation Tax Credit Expansion Act of 1993 - Amends the Internal Revenue Code with respect to the offset for rental real estate activities under passive activity rules to increase the rehabilitation credit under such rules. Allows the rehabilitation investment credit to offset a portion of tentative minimum tax.