
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document affected by Public Law 107-16 Section 103(a)]
[Document affected by Public Law 107-16 Section 103(b)]
[CITE: 26USC68]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                        Subtitle A--Income Taxes
 
                  CHAPTER 1--NORMAL TAXES AND SURTAXES
 
               Subchapter B--Computation of Taxable Income
 
   PART I--DEFINITION OF GROSS INCOME, ADJUSTED GROSS INCOME, TAXABLE 
                              INCOME, ETC.
 
Sec. 68. Overall limitation on itemized deductions


(a) General rule

    In the case of an individual whose adjusted gross income exceeds the 
applicable amount, the amount of the itemized deductions otherwise 
allowable for the taxable year shall be reduced by the lesser of--
        (1) 3 percent of the excess of adjusted gross income over the 
    applicable amount, or
        (2) 80 percent of the amount of the itemized deductions 
    otherwise allowable for such taxable year.

(b) Applicable amount

                           (1) In general

        For purposes of this section, the term ``applicable amount'' 
    means $100,000 ($50,000 in the case of a separate return by a 
    married individual within the meaning of section 7703).

                      (2) Inflation adjustments

        In the case of any taxable year beginning in a calendar year 
    after 1991, each dollar amount contained in paragraph (1) shall be 
    increased by an amount equal to--
            (A) such dollar amount, multiplied by
            (B) the cost-of-living adjustment determined under section 
        1(f)(3) for the calendar year in which the taxable year begins, 
        by substituting ``calendar year 1990'' for ``calendar year 
        1992'' in subparagraph (B) thereof.

(c) Exception for certain itemized deductions

    For purposes of this section, the term ``itemized deductions'' does 
not include--
        (1) the deduction under section 213 (relating to medical, etc. 
    expenses),
        (2) any deduction for investment interest (as defined in section 
    163(d)), and
        (3) the deduction under section 165(a) for casualty or theft 
    losses described in paragraph (2) or (3) of section 165(c) or for 
    losses described in section 165(d).

(d) Coordination with other limitations

    This section shall be applied after the application of any other 
limitation on the allowance of any itemized deduction.

(e) Exception for estates and trusts

    This section shall not apply to any estate or trust.

(Added Pub. L. 101-508, title XI, Sec. 11103(a), Nov. 5, 1990, 104 Stat. 
1388-406; amended Pub. L. 103-66, title XIII, Secs. 13201(b)(3)(E), 
13204, Aug. 10, 1993, 107 Stat. 459, 462; Pub. L. 105-277, div. J, title 
IV, Sec. 4004(b)(2), Oct. 21, 1998, 112 Stat. 2681-911.)

    Adjustment of Applicable Amount Under This Section for Tax Years 
                            Beginning in 2001

        For adjustment of ``applicable amount'' for determining 
    limitation on itemized deductions under this section for tax years 
    beginning in 2001, see section 3.06 of Revenue Procedure 2001-13, 
    set out as a note under section 1 of this title.


                               Amendments

    1998--Subsec. (c)(3). Pub. L. 105-277 substituted ``for casualty or 
theft losses described in paragraph (2) or (3) of section 165(c) or for 
losses described in section 165(d)'' for ``for losses described in 
subsection (c)(3) or (d) of section 165''.
    1993--Subsec. (b)(2)(B). Pub. L. 103-66, Sec. 13201(b)(3)(E), 
substituted ``1992'' for ``1989''.
    Subsec. (f). Pub. L. 103-66, Sec. 13204, struck out heading and text 
of subsec. (f). Text read as follows: ``This section shall not apply to 
any taxable year beginning after December 31, 1995.''


                    Effective Date of 1998 Amendment

    Pub. L. 105-277, div. J, title IV, Sec. 4004(c)(3), Oct. 21, 1998, 
112 Stat. 2681-911, provided that: ``The amendment made by subsection 
(b)(2) [amending this section] shall apply to taxable years beginning 
after December 31, 1990.''


                    Effective Date of 1993 Amendment

    Amendment by section 13201(b)(3)(E) of Pub. L. 103-66 applicable to 
taxable years beginning after Dec. 31, 1992, see section 13201(c) of 
Pub. L. 103-66, set out as a note under section 1 of this title.


                             Effective Date

    Section applicable to taxable years beginning after Dec. 31, 1990, 
see section 11103(e) of Pub. L. 101-508, set out as an Effective Date of 
1990 Amendment note under section 1 of this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 1, 56, 773 of this title.
