text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Higher Education Family Opportunity 
  Act of 1998''.
  
  SEC. 2. DEDUCTION FOR POSTSECONDARY TUITION AND RELATED EXPENSES IN 
                LIEU OF HOPE AND LIFETIME LEARNING CREDIT.
  
      (a) In General.--Part VII of subchapter B of chapter 1 of the 
  Internal Revenue Code of 1986 (relating to additional itemized 
  deductions for individuals) is amended by redesignating section 222 as 
  section 223 and by inserting after section 221 the following new 
  section:
  
  ``SEC. 222. DEDUCTION FOR POSTSECONDARY TUITION AND RELATED EXPENSES IN 
                LIEU OF HOPE AND LIFETIME LEARNING CREDIT.
  
      ``(a) Allowance of Deduction.--In the case of an individual, there 
  shall be allowed as a deduction for the taxable year an amount equal to 
  the qualified tuition and related expenses paid or incurred by such 
  individual.
      ``(b) Limitation.--
              ``(1) In general.--The amount allowable as a deduction 
          under subsection (a) for a taxable year shall not exceed the 
          deductible limit for each eligible student.
              ``(2) Deductible limit.--For purposes of paragraph (1), the 
          deductible limit for a taxable year shall be determined in 
          accordance with the following table:
  
  ``Taxable years beginning                                              
    in calendar year:                                   Deductible limit:
          1999................................................... $5,000 
          2000................................................... $5,500 
          2001................................................... $6,000 
          2002................................................... $6,500 
          2003................................................... $7,000 
          2004................................................... $7,500 
          2005................................................... $8,000 
          2006................................................... $8,500 
          2007................................................... $9,000 
          2008................................................... $9,500 
          2009 and thereafter....................................$10,000.
      ``(c) Qualified Tuition and Related Expenses; Eligible Student.--
  The terms `qualified tuition and related expenses' and `eligible 
  student' shall have the same meanings given to such terms by section 
  25A.
      ``(d) Applicable Rules.--For purposes of this section, rules 
  similar to the rules of section 25A(g) shall apply.''.
      (b) Deduction Not a Miscellaneous Itemized Deduction.--Subsection 
  (b) of section 67 of such Code (relating to miscellaneous itemized 
  deductions) is amended by striking ``and'' at the end of paragraph 
  (11), by striking the period at the end of paragraph (12) and inserting 
  ``, and'', and by adding at the end the following new paragraph:
              ``(13) the deduction under section 222 (relating to 
          deduction for postsecondary tuition and related expenses in 
          lieu of Hope and Lifetime Learning credit).''.
      (c) Conforming Amendments.--
              (1) Subparagraph (B) of section 72(t)(7) of such Code is 
          amended by inserting ``or 222(e)(2), as the case may be'' after 
          ``section 25A(g)(2)''.
              (2) Paragraph (2) of section 135(d) of such Code is amended 
          by inserting ``or 222, as the case may be,'' after ``section 
          25A''.
              (3) Paragraph (2) of section 221(e) of such Code is amended 
          by striking ``and'' after subparagraph (A), by striking the 
          period at the end of subparagraph (B) and inserting ``, and'', 
          and by inserting after subparagraph (B) the following new 
          subparagraph:
                      ``(C) the amount allowed as a deduction under 
                  section 222.''.
              (4) Paragraph (2) of section 6213(g) of such Code is 
          amended--
                      (A) by striking ``and'' at the end of subparagraph 
                  (J) (as added by section 201(b) of the Taxpayer Relief 
                  Act of 1997),
                      (B) by redesignating subparagraph (J) (as added by 
                  section 1085(a)(3) of the Taxpayer Relief Act of 1997) 
                  as subparagraph (K) and by striking the period at the 
                  end of such subparagraph and inserting ``, and'', and
                      (C) by adding at the end the following new 
                  subparagraph:
                      ``(L) an omission of a correct TIN required under 
                  section 222(e)(1) (relating to higher education tuition 
                  and related expenses) to be included on a return.''.
      (d) Clerical Amendment.--The table of sections for part VII of 
  subchapter B of chapter 1 of such Code is amended by striking the last 
  item and inserting the following new items:
  
                                ``Sec. 222. Deduction for postsecondary 
                                          tuition and related expenses in 
                                          lieu of Hope and Lifetime 
                                          Learning credit.
                                ``Sec. 223. Cross reference.''.
      (e) Effective Date.--The amendments made by this section shall 
  apply to expenses paid or incurred after December 31, 1998, for 
  education furnished in academic periods beginning after such date.
target: Higher Education Family Opportunity Act of 1998 - Amends the Internal Revenue Code to permit a deduction for qualified tuition and related expenses in lieu of the Hope and Lifetime Learning credits. Sets the deductible limit at $5,000 for 1999 and increases such limit by $500 annually until it reaches $10,000 for years 2009 and thereafter.
feat_title: Higher Education Family Opportunity Act of 1998