100 STAT. 2218
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PUBLIC LAW 99-514—OCT. 22, 1986
"(1) $3,000 ($1,500 in the case of a married individual filing a separate return), or "(2) the excess of such losses over such gains." ' (11) Paragraph (2) of section 12120t)) (relating to capital loss carrybacks and carryovers) is amended to read as follows: "(2) SPECIAL RULE.—For purposes of determining the excess -^ referred to in subparagraph (A) or (B) of paragraph (1), an f amount equal to the amount allowed for the taxable year under paragraph (1) or (2) of section 1211(b) shall be treated as a shortterm capital gain in such year." (12) Paragraph (1) of section 1402(i) (relating to special rules •"^'- for options and commodities dealers) is amended to read as follows: "(1) IN GENERAL.—Notwithstanding subsection (a)(3)(A), in determining the net earnings from self-employment of any options dealer or commodities dealer, there shall not be excluded any gain or loss (in the normal course of the taxpayer's activity of dealing in or trading section 1256 contracts) from ' " section 1256 contracts or property related to such contracts." (13) The table of sections for part I of subchapter P of chapter 1 is amended by striking out the item relating to section 1202. (c) EFFECTIVE DATE.—The amendments made by this section shall apply to taxable years beginning after December 31, 1986. SEC. 302. 28-PERCENT CAPITAL GAINS RATE FOR TAXPAYERS OTHER THAN CORPORATIONS.
(a) IN GENERAL.—Section 1 (relating to tax imposed on individuals), as amended by sections 101 and 1411, is amended by adding at the end thereof the following new subsection: "(j) MAXIMUM CAPITAL GAINS RATE.—
"(1) IN GENERAL.—If a taxpayer has a net capital gain for any taxable year to which this subsection applies, then the tax imposed by this section shall not exceed the sum of— "(A) a tax computed at the rates and in the same manner '^ ' as if this subsection had not been enacted on the greater r.
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"(i) the taxable income reduced by the amount of net ^ capital gain, or " ' "(ii) the amount of taxable income taxed at a rate below 28 percent, plus f/t ' "(B) a tax of 28 percent of the amount of taxable income ^ J, 1 in excess of the amount determined under subparagraph (A), plus ^. "(C) the amount of increase determined under subsection " (g). "(2) YEARS TO WHICH SUBSECTION APPLIES.—This subsection shall apply to— '(A) any taxable year beginning in 1987, and ' "(B) any taxable year beginning after 1987 if the highest . b * rate of tax set forth in subsection (a), (b), (c), (d), or (e) (whichever applies) for such taxable year exceeds 28 percent." (b) EFFECTIVE DATE.—The amendment made by this section shall apply to taxable years beginning after December 31, 1986. (c) TRANSITIONAL RULE.—The tax under section 1 of the Internal Revenue Code of 1986 on the long-term capital gain on rights to royalties paid under leases and assignments binding on Septem-
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