text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Historic Rehabilitation Tax Credit 
  Expansion Act of 1993''.
  
  SEC. 2. TREATMENT OF REHABILITATION CREDIT UNDER PASSIVE ACTIVITY 
                LIMITATIONS.
  
      (a) General Rule.--Paragraphs (2) and (3) of section 469(i) of the 
  Internal Revenue Code of 1986 (relating to $25,000 offset for rental 
  real estate activities) are amended to read as follows:
              ``(2) Dollar limitations.--
                      ``(A) In general.--Except as otherwise provided in 
                  this paragraph, the aggregate amount to which paragraph 
                  (1) applies for any taxable year shall not exceed 
                  $25,000 reduced (but not below zero) by 50 percent of 
                  the amount (if any) by which the adjusted gross income 
                  of the taxpayer for the taxable year exceeds $100,000.
                      ``(B) Phaseout not applicable to low-income housing 
                  credit.--In the case of the portion of the passive 
                  activity credit for any taxable year which is 
                  attributable to any credit determined under section 
                  42--
                              ``(i) subparagraph (A) shall not apply, and
                              ``(ii) paragraph (1) shall not apply to the 
                          extent that the deduction equivalent of such 
                          portion exceeds--
                                      ``(I) $25,000, reduced by
                                      ``(II) the aggregate amount of the 
                                  passive activity loss (and the 
                                  deduction equivalent of any passive 
                                  activity credit which is not so 
                                  attributable and is not attributable to 
                                  the rehabilitation credit determined 
                                  under section 47) to which paragraph 
                                  (1) applies after the application of 
                                  subparagraph (A).
                      ``(C) $55,500 limit for rehabilitation credits.--In 
                  the case of the portion of the passive activity credit 
                  for any taxable year which is attributable to the 
                  rehabilitation credit determined under section 47--
                              ``(i) subparagraph (A) shall not apply, and
                              ``(ii) paragraph (1) shall not apply to the 
                          extent that the deduction equivalent of such 
                          portion exceeds--
                                      ``(I) $55,500, reduced by
                                      ``(II) the aggregate amount of the 
                                  passive activity loss (and the 
                                  deduction equivalent of any passive 
                                  activity credit which is not so 
                                  attributable) to which paragraph (1) 
                                  applies for the taxable year after the 
                                  application of subparagraphs (A) and 
                                  (B).
              ``(3) Adjusted gross income.--For purposes of paragraph 
          (2)(A), adjusted gross income shall be determined without 
          regard to--
                      ``(A) any amount includable in gross income under 
                  section 86,
                      ``(B) any amount excludable from gross income under 
                  section 135,
                      ``(C) any amount allowable as a deduction under 
                  section 219, and
                      ``(D) any passive activity loss.''.
      (b) Conforming Amendments.--
              (1) Subparagraph (B) of section 469(i)(4) of such Code is 
          amended to read as follows:
                      ``(B) Reduction for surviving spouse's exemption.--
                  For purposes of subparagraph (A), the $25,000 amounts 
                  under paragraph (2)(A) and (2)(B)(ii) and the $55,500 
                  amount under paragraph (2)(C)(ii) shall each be reduced 
                  by the amount of the exemption under paragraph (1) 
                  (determined without regard to the reduction contained 
                  in paragraph (2)(A)) which is allowable to the 
                  surviving spouse of the decedent for the taxable year 
                  ending with or within the taxable year of the 
                  estate.''.
              (2) Subparagraph (A) of section 469(i)(5) of such Code is 
          amended by striking clauses (i), (ii), and (iii) and inserting 
          the following:
                              ``(i) `$12,500' for `$25,000' in 
                          subparagraphs (A) and (B)(ii) of paragraph (2),
                              ``(ii) `$50,000' for `$100,000' in 
                          paragraph (2)(A)'', and
                              ``(iii) `$27,750' for `$55,500' in 
                          paragraph (2)(C)(ii).''.
              (3) The subsection heading for subsection (i) of section 
          469 of such Code is amended by striking ``$25,000''.
      (c) Effective Date.--The amendments made by this section shall 
  apply to property placed in service on or after May 5, 1993, in taxable 
  years ending on or after such date.
  
  SEC. 3. REHABILITATION CREDIT ALLOWED TO OFFSET PORTION OF ALTERNATIVE 
                MINIMUM TAX.
  
      (a) In General.--Section 38(c) of the Internal Revenue Code of 1986 
  (relating to limitation based on amount of tax) is amended by 
  redesignating paragraph (2) as paragraph (3) and by inserting after 
  paragraph (1) the following new paragraph:
              ``(2) Rehabilitation investment credit may offset portion 
          of minimum tax.--
                      ``(A) In general.--In the case of the 
                  rehabilitation investment tax credit--
                              ``(i) this section and section 39 shall be 
                          applied separately with respect to such credit, 
                          and
                              ``(ii) for purposes of applying paragraph 
                          (1) to such credit--
                                      ``(I) the tentative minimum tax 
                                  under subparagraph (A) thereof shall be 
                                  reduced by the minimum tax offset 
                                  amount determined under subparagraph 
                                  (B) of this paragraph, and
                                      ``(II) the limitation under 
                                  paragraph (1) (as modified by subclause 
                                  (I)) shall be reduced by the credit 
                                  allowed under subsection (a) for the 
                                  taxable year (other than the 
                                  rehabilitation investment tax credit).
                      ``(B) Minimum tax offset amount.--For purposes of 
                  subparagraph (A)(ii)(I), the minimum tax offset amount 
                  is an amount equal to--
                              ``(i) in the case of a taxpayer not 
                          described in clause (ii), the lesser of--
                                      ``(I) 25 percent of the tentative 
                                  minimum tax for the taxable year, or
                                      ``(II) $20,000, or
                              ``(ii) in the case of a C corporation other 
                          than a closely held C corporation (as defined 
                          in section 469(j)(1)), 5 percent of the 
                          tentative minimum tax for the taxable year.
                      ``(C) Rehabilitation investment tax credit.--For 
                  purposes of this paragraph, the term `regular 
                  investment tax credit' means the portion of the credit 
                  under subsection (a) which is attributable to the 
                  credit determined under section 47.''.
      (b) Conforming Amendment.--Section 38(d) (relating to components of 
  investment credit) is amended by adding at the end the following new 
  paragraph:
              ``(4) Special rule for rehabilitation credit.--
          Notwithstanding paragraphs (1) and (2), the rehabilitation 
          investment tax credit (as defined in subsection (c)(2)(C)) 
          shall be treated as used last.''.
      (c) Effective Date.--The amendments made by this section shall 
  apply to taxable years beginning after December 31, 1992.
target: Historic Rehabilitation Tax Credit Expansion Act of 1993 - Amends the Internal Revenue Code with respect to the offset for rental real estate activities under passive activity rules to increase the rehabilitation credit under such rules. 
  Allows the rehabilitation investment credit to offset a portion of tentative minimum tax.
feat_title: Historic Rehabilitation Tax Credit Expansion Act of 1993