To amend the Internal Revenue Code of 1986 to repeal the dollar limitation on the deduction of interest on education loans.

March 13, 2003

Mr. WU introduced the following bill; which was referred to the Committee on Ways and Means

To amend the Internal Revenue Code of 1986 to repeal the dollar limitation on the deduction of interest on education loans.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. REPEAL OF DOLLAR LIMITATION ON DEDUCTION OF INTEREST ON EDUCATION LOANS.

(a) IN GENERAL- Subsection (b) of section 221 of the Internal Revenue Code of 1986 (relating to maximum deduction) is amended to read as follows:

`(b) LIMITATION BASED ON MODIFIED ADJUSTED GROSS INCOME-

`(1) IN GENERAL- The amount which would (but for this subsection) be allowable as a deduction under this section shall be reduced (but not below zero) by the amount determined under paragraph (2).

`(2) AMOUNT OF REDUCTION- The amount determined under this paragraph is the amount which bears the same ratio to the amount which would be so taken into account as--

`(A) the excess of--

`(i) the taxpayer's modified adjusted gross income for such taxable year, over

`(ii) $50,000 ($100,000 in the case of a joint return), bears to

`(B) $15,000 ($30,000 in the case of a joint return).

`(3) MODIFIED ADJUSTED GROSS INCOME- The term `modified adjusted gross income' means adjusted gross income determined--

`(A) without regard to this section and sections 222, 911, 931, and 933, and

`(B) after application of sections 86, 135, 137, 219, and 469.'.

(b) EFFECTIVE DATE- The amendment made by this section shall apply to payments made in taxable years beginning after December 31, 2002.

END