# Pub. L. 108-27: changes to the Internal Revenue Code 2003-05-28, 117 Stat. 754. Source: . ## Legislative history - Bill: [H.R. 2](https://www.congress.gov/bill/108th-congress/house-bill/2) - House report: [H. Rept. 108-94](https://www.govinfo.gov/content/pkg/CRPT-108hrpt94/html/CRPT-108hrpt94.htm) - Conference report: [H. Rept. 108-126](https://www.govinfo.gov/content/pkg/CRPT-108hrpt126/html/CRPT-108hrpt126.htm) - Bluebook: [JCT general explanation (2005)](https://www.govinfo.gov/app/details/CPRT-109JPRT21118) ## § 1: Tax imposed - § 1(f)(8)(A): Pub. L. 108–27, § 102(b)(1), substituted “2002” for “2004”. - § 1(f)(8)(B): Pub. L. 108–27, § 102(a), inserted table item relating to years 2003 and 2004. - § 1(h)(1)(B): Pub. L. 108–27, § 301(a)(1), substituted “5 percent (0 percent in the case of taxable years beginning after 2007)” for “10 percent”. - § 1(h)(1)(C): Pub. L. 108–27, § 301(a)(2)(A), substituted “15 percent” for “20 percent”. - § 1(h)(2): Pub. L. 108–27, § 301(b)(1)(A), (B), redesignated par. (3) as (2) and struck out heading and text of former par. (2). Text read as follows: - § 1(h)(3): Pub. L. 108–27, § 302(e)(1), amended heading and text of par. (3) generally. Prior to amendment, text read as follows: “For purposes of this subsection, the term ‘adjusted net capital gain’ means net capital gain reduced (but not below zero) by the sum of— - § 1(h)(3): Pub. L. 108–27, § 301(b)(1)(B), redesignated par. (4) as (3). Former par. (3) redesignated (2). - § 1(h)(4), § 1(h)(5), § 1(h)(6), § 1(h)(7): Pub. L. 108–27, § 301(b)(1)(B), redesignated pars. (5) to (8) as (4) to (7), respectively. Former par. (4) redesignated (3). - § 1(h)(8): Pub. L. 108–27, § 301(b)(1)(C), redesignated par. (10) as (8). Former par. (8) redesignated (7). - § 1(h)(9): Pub. L. 108–27, § 301(b)(1)(A), (C), redesignated par. (11) as (9) and struck out heading and text of former par. (9). Text read as follows: “For purposes of this subsection, the term ‘qualified 5-year gain’ means the aggregate long-term capital gain from property held for more than 5 years. The determination under the preceding sentence shall be made without regard to collectibles gain, gain described in paragraph (7)(A)(i), and section 1202 gain.” - § 1(h)(10): Pub. L. 108–27, § 301(b)(1)(C), redesignated par. (12) as (10). Former par. (10) redesignated (8). - § 1(h)(11): Pub. L. 108–27, § 302(a), added par. (11). - § 1(h)(11): Pub. L. 108–27, § 301(b)(1)(C), redesignated par. (11) as (9). - § 1(h): Pub. L. 108–27, § 301(b)(1)(C), redesignated par. (12) as (10). - § 1(i)(1)(B)(i): Pub. L. 108–27, § 104(a), substituted “($12,000 in the case of taxable years beginning after December 31, 2004, and before January 1, 2008)” for “($12,000 in the case of taxable years beginning before January 1, 2008)”. - § 1(i)(1)(C): Pub. L. 108–27, § 104(b), amended heading and text of subpar. (C) generally. Text read as follows: “In prescribing the tables under subsection (f) which apply with respect to taxable years beginning in calendar years after 2000— - § 1(i)(2): Pub. L. 108–27, § 105(a), amended table generally. Prior to amendment, table read as follows: ## § 24: Child tax credit - § 24(a): Pub. L. 108–27 amended table by deleting items relating to calendar years 2001 and 2002 and increasing per child amount from $600 to $1,000 for calendar years 2003 or 2004. ## § 55: Alternative minimum tax imposed - § 55(b)(3): Pub. L. 108–27, § 301(b)(2), struck out first sentence of concluding provisions which read as follows: “In the case of taxable years beginning after December 31, 2000, rules similar to the rules of section 1(h)(2) shall apply for purposes of subparagraphs (B) and (C).” - § 55(b)(3)(B): Pub. L. 108–27, § 301(a)(1), substituted “5 percent (0 percent in the case of taxable years beginning after 2007)” for “10 percent”. - § 55(b)(3)(C): Pub. L. 108–27, § 301(a)(2)(B), substituted “15 percent” for “20 percent”. - § 55(d)(1)(A): Pub. L. 108–27, § 106(a)(1), substituted “$58,000 in the case of taxable years beginning in 2003 and 2004” for “$49,000 in the case of taxable years beginning in 2001, 2002, 2003, and 2004”. - § 55(d)(1)(B): Pub. L. 108–27, § 106(a)(2), substituted “$40,250 in the case of taxable years beginning in 2003 and 2004” for “$35,750 in the case of taxable years beginning in 2001, 2002, 2003, and 2004”. ## § 57: Items of tax preference - § 57(a)(7): Pub. L. 108–27 substituted “7 percent” for “42 percent” after “An amount equal to” and struck out last sentence which read as follows: “In the case of stock the holding period of which begins after December 31, 2000 (determined with the application of the last sentence of section 1(h)(2)(B)), the preceding sentence shall be applied by substituting ‘28 percent’ for ‘42 percent’.” ## § 63: Taxable income defined - § 63(c)(7): Pub. L. 108–27 inserted table item relating to years 2003 and 2004. ## § 163: Interest - § 163(d)(4)(B): Pub. L. 108–27 inserted at end “Such term shall include qualified dividend income (as defined in section 1(h)(11)(B)) only to the extent the taxpayer elects to treat such income as investment income for purposes of this subsection.” ## § 168: Accelerated cost recovery system - § 168(k): Pub. L. 108–27, § 201(c)(1), substituted “January 1, 2005” for “September 11, 2004” in heading. - § 168(k)(2)(A): Pub. L. 108–27, § 201(b)(2), substituted “January 1, 2005” for “September 11, 2004” in subcls. (I) and (II). - § 168(k)(2)(B)(ii): Pub. L. 108–27, § 201(b)(1), substituted “pre-January 1, 2005” for “pre-September 11, 2004” in heading and “January 1, 2005” for “September 11, 2004” in text. - § 168(k)(2)(C)(iii): Pub. L. 108–27, § 201(b)(3), inserted at end “The preceding sentence shall be applied separately with respect to property treated as qualified property by paragraph (4) and other qualified property.” - § 168(k)(2)(D)(i): Pub. L. 108–27, § 201(b)(1)(A), substituted “January 1, 2005” for “September 11, 2004”. - § 168(k)(4): Pub. L. 108–27, § 201(a), added par. (4). ## § 179: Election to expense certain depreciable business assets - § 179(b)(1): Pub. L. 108–27, § 202(a), reenacted heading without change and amended text generally. Prior to amendment, par. (1) contained a table specifying the maximum amounts for taxable years 1997 to 2003 and thereafter which could be taken into account as the aggregate costs under subsec. (a). - § 179(b)(2): Pub. L. 108–27, § 202(b), inserted “($400,000 in the case of taxable years beginning after 2002 and before 2006)” after “$200,000”. - § 179(b)(5): Pub. L. 108–27, § 202(d), added par. (5). - § 179(c)(2): Pub. L. 108–27, § 202(e), inserted at end “Any such election or specification with respect to any taxable year beginning after 2002 and before 2006 may be revoked by the taxpayer with respect to any property, and such revocation, once made, shall be irrevocable.” - § 179(d)(1): Pub. L. 108–27, § 202(c), reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “For purposes of this section, the term ‘section 179 property’ means any tangible property (to which section 168 applies) which is section 1245 property (as defined in section 1245(a)(3)) and which is acquired by purchase for use in the active conduct of a trade or business. Such term shall not include any property described in section 50(b) and shall not include air conditioning or heating units.” ## § 301: Distributions of property - § 301(f)(4): Pub. L. 108–27 added par. (4). ## § 306: Dispositions of certain stock - § 306(a)(1)(D): Pub. L. 108–27 added subpar. (D). ## § 338: Certain stock purchases treated as asset acquisitions - § 338(h)(14): Pub. L. 108–27 struck out heading and text of par. (14). Text read as follows: “For purposes of determining whether section 341 applies to a disposition within 1 year after the acquisition date of stock by a shareholder (other than the acquiring corporation) who held stock in the target corporation on the acquisition date, section 341 shall be applied without regard to this section.” ## § 467: Certain payments for the use of property or services - § 467(c)(5)(C): Pub. L. 108–27 struck out “, 341(e)(12),” after “170(e)”. ## § 531: Imposition of accumulated earnings tax - § 531: Pub. L. 108–27 substituted “equal to 15 percent of the accumulated taxable income.” for “equal to the product of the highest rate of tax under section 1(c) and the accumulated taxable income.” ## § 541: Imposition of personal holding company tax - § 541: Pub. L. 108–27 substituted “equal to 15 percent of the undistributed personal holding company income.” for “equal to the product of the highest rate of tax under section 1(c) and the undistributed personal holding company income.” ## § 584: Common trust funds - § 584(c): Pub. L. 108–27 inserted concluding provisions. ## § 702: Income and credits of partner - § 702(a)(5): Pub. L. 108–27 amended par. (5) generally. Prior to amendment, par. (5) read as follows: “dividends with respect to which there is a deduction under part VIII of subchapter B,”. ## § 854: Limitations applicable to dividends received from regulated investment company - § 854(a): Pub. L. 108–27, § 302(c)(1), inserted “section 1(h)(11) (relating to maximum rate of tax on dividends) and” after “For purposes of”. - § 854(b)(1)(B): Pub. L. 108–27, § 302(c)(2), added subpar. (B). Former subpar. (B) redesignated (C). - § 854(b)(1)(C): Pub. L. 108–27, § 302(c)(2), (3), redesignated subpar. (B) as (C) and substituted “subparagraph (A) or (B)” for “subparagraph (A)”. - § 854(b)(2): Pub. L. 108–27, § 302(c)(4), inserted “the maximum rate under section 1(h)(11) and” after “for purposes of”. - § 854(b): Pub. L. 108–27, § 302(c)(5), added par. (5). ## § 857: Taxation of real estate investment trusts and their beneficiaries - § 857(c): Pub. L. 108–27 reenacted subsec. heading without change and amended text generally. Prior to amendment, text read as follows: “For purposes of section 243 (relating to deductions for dividends received by corporations), a dividend received from a real estate investment trust which meets the requirements of this part shall not be considered as a dividend.” ## § 1255: Gain from disposition of section 126 property - § 1255(b)(2): Pub. L. 108–27 struck out “, 341(e)(12),” after “170(e)”. ## § 1257: Disposition of converted wetlands or highly erodible croplands - § 1257(d): Pub. L. 108–27 struck out “, 341(e)(12),” after “170(e)”. ## § 1445: Withholding of tax on dispositions of United States real property interests - § 1445(e)(1): Pub. L. 108–27 substituted “15 percent” for “20 percent”. ## § 7518: Tax incentives relating to merchant marine capital construction funds - § 7518(g)(6)(A): Pub. L. 108–27 substituted “15 percent” for “20 percent” in concluding provisions.