Tax Equity and Efficiency Act

Summary

Tax Equity and Efficiency Act - Amends the Internal Revenue Code to revise the accelerated cost recovery system (ACRS) for the depreciation of certain property used in a trade or business or held for the production of income. Allows an income tax deduction for the expense of recovery property in the year recovery property is purchased. (Current law requires that such deduction be taken over a specified number of years.) Bases the amount of such deduction on the present value (using a discount rate of 6.06 percent) of the depreciation deductions which would have been allowable under the straight-line method for an asset having an economic life equal to the average economic life of property in its class. Requires the Secretary of the Treasury to prescribe regulations assigning recovery property to one of 35 specified classes. Revises the method for calculating the investment tax credit to allow such credit in an amount equal to six percent of the nonexpensed qualified investment. Allows a corporate shareholder an income tax credit based on the amount of dividends received by such taxpayer during the taxable year. Sets forth the method for calculating the amount of such credit. Treats a corporate shareholder as having received distributions taxable as dividends in an amount equal to the shareholder's pro rata share of the undistributed earnings and profits of the corporation. Sets forth the method for calculating undistributed earnings and profits of a corporation. Provides that the amount of any dividend received by a shareholder shall be increased by the amount of the shareholder income tax credit. Sets forth special rules for the allocation of a corporation's earnings and profits in the case of actual distributions and losses. Sets forth rules for the treatment of shareholder income tax credits received by corporations.

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1 official file

• Introduced in House

  summary · EN · 10 October 1984

  Open at official source

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