PUBLIC LAW 102-164—NOV. 15, 1991 105 STAT. 1063 "(I) the annualized amount of the modified adjusted gross income for months in the current year
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ending before the due date for the installment determined by assuming that all items referred to in clause (i) of subparagraph (D) accrued ratably during the current year, and "(11) the annualized amount of the adjusted gross income for months in the current year ending before the due date for the installment. Any reduction in an installment under the preceding sentence shall be recaptured by increasing the amount of the 1st succeeding required installment (with respect to which the requirements of the preceding sentence are not met) by the amount of such reduction. " (D) MODIFIED ADJUSTED GROSS INCOME FOR CURRENT YEAR. —For purposes of this paragraph, the term 'modified adjusted gross income' means the amount of the adjusted gross income shown on the return for the current year determined with the following modifications: "(i) The qualified pass-thru items shown on the return for the preceding taxable year shall be treated as also shown on the return for the current year (and the actual qualified pass-thru items (if any) for the current year shall be disregarded). "(ii) The amount of any gain from any involuntary conversion (within the meaning of section 1033) which is shown on the return for the current year shall be disregarded. "(iii) The amount of any gain from the sale or exchange of a principal residence (within the meaning of section 1034) which is shown on the return for the current year shall be disregarded. " (E) QuAUFiED PASS-THRU ITEM.—For purposes of this paragraph— "(i) IN GENERAL.— Except as otherwise provided in this subparagraph, the term 'qualified pass-thru item' means any item of income, gain, loss, deduction, or ' credit attributable to an interest in a partnership or S corporation. Such term shall not include any gain or loss from the disposition of an interest in an entity referred to in the preceding sentence. "(ii) 10-PERCENT OWNERS AND GENERAL PARTNERS EX- CLUDED. —The term 'qualified pass-thru item' shall not include, with respect to any year, any item attributable to— "(I) an interest in an S corporation, if at any time during such year the individual was a 10-percent owner in such corporation, or "(II) an interest in a partnership, if at any time during such year the individual was a 10-percent owner or general partner in such partnership, " (iii) 10-PERCENT OWNER.—The term '10-percent owner' means— "(I) in the case of an S corporation, an individual who owns 10 percent or more (by vote or value) of the stock in such corporation, and
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