Sohodojo Advisory Board Member
The Taxman86 Speaks...
13 October 2000
<< Previous issue] [Next issue >>
Let The Games Begin in 31 Empowerment Zones!
1. Jack Kemp has finally arrived.
Twenty years ago then Congressman Jack Kemp suggested that tax
free zones, also known as Enteprise Zones was the way to encourage
economic development in distressed communities. Today his dream
is about to become reality in 31 Empowerment Zones by the end of
the month, and all of Washington, D.C., and in an additional 30
Renewal Communities beginning January 1, 2002. That is the good
news, the bad is that Wilmington, DE., San Diego, CA., and all the
other Enterprise Communities will not enjoy this incentive.
More importantly the New York Times has missed this story.
We suggest you read carefully proposed IRC Section 1397B since it
will become the most interesting provision for estate planning,
and income tax planning we have ever seen, to wit, how to pass
millions without income or estate tax. Jack Kemp never had it so
good, but his Buffalo, N.Y. will not be able to participate.
"...Community Renewal and New Markets Act of 2000 (Introduced in
`(b) PER TAXPAYER LIMITATION-
SEC. 115. EMPOWERMENT ZONE CAPITAL GAIN.
- (a) IN GENERAL- Part III of subchapter U of chapter 1 is amended--
- (1) by redesignating subpart C as subpart D;
- (2) by redesignating sections 1397B and 1397C as sections 1397C and 1397D, respectively; and
- (3) by inserting after subpart B the following new subpart:
'Subpart C--Empowerment Zone Capital Gain
`Sec. 1397B. Empowerment zone capital gain.
[`SEC. 1397B. EMPOWERMENT ZONE CAPITAL GAIN.
[WHERE IS WILMINGTON DE.?]
- `(a) GENERAL RULE- Gross income shall not
include qualified capital gain from the sale or exchange of any
qualified empowerment zone asset held for more than 5 years.
- `(1) IN GENERAL- The amount of eligible
gain which may be taken into account under subsection (a) for the
taxable year with respect to any taxpayer shall not exceed
$25,000,000, reduced by the aggregate amount of eligible gain
taken into account under subsection (a) for prior taxable years
with respect to such taxpayer. [WHERE IS WILMINGTON, DE.?]
- `(2) ELIGIBLE GAIN- For purposes of this
subsection, `eligible gain' means any gain from the sale or
exchange of a qualified empowerment zone asset held for more than
5 years. [Where is Wilmington, DE.?]
- `(3) TREATMENT OF MARRIED INDIVIDUALS-
- `(A) SEPARATE RETURNS- In the case
of a separate return by a married individual, paragraph (1) shall
be applied by substituting `$12,500,000' for `$25,000,000'.
- `(B) ALLOCATION OF EXCLUSION- In
the case of a joint return, the amount of gain taken into account
- (a) shall be allocated equally
between the spouses for purposes of applying this subsection to
subsequent taxable years.
- `(C) MARITAL STATUS- For purposes
of this subsection, marital status shall be determined under
- `(4) TREATMENT OF CORPORATE TAXPAYERS- For purposes of this subsection--
- `(A) all corporations which are
members of the same controlled group of corporations (within the
meaning of section 52(a)) shall be treated as 1 taxpayer, and
- `(B) any gain excluded under
subsection (a) by a predecessor of any C corporation shall be
treated as having been excluded by such C corporation.]..."
This provision and many others will be adopted in the upcoming
$300B Tax Package being negotiated this weekend.
Although the 115 Enterprise Communities, their many thousands of
Enterprise Zone Businesses, and tens of thousands of employees,
may not make it because they may add $200M to the $39B Community
Renewal Package, a new benefit for Corning Glass at $2B may.
"...AP Washington Co. Seeks [$3B ]Tax Breaks; Offset Suits
by CURT ANDERSON
AP Tax Writer
WASHINGTON (AP) -- Former asbestos
producers Owens Corning, W.R. Grace, U.S. Gypsum and others
struggling to resolve tens of thousands of health-related lawsuits
would get $2 billion in tax breaks under legislation being
circulated on Capitol Hill in the frenzied final days of the
Jim Schneider, LL.M.
<< Previous issue] [Next issue >>
The Taxman86 Speaks... is copyright 1998-2010 by James E. Schneider, LL.M. Inc.
Our Privacy Statement
© 1998-2010 Sohodojo, Inc. unless otherwise stated.
"War College" of the Small Is Good Business Revolution
Website design and hosting by Sohodojo Business Services,
A Portfolio Life nanocorp
[ Translate page. ]
Archive Host Sohodojo Home
Go to the Visitor Center