Targeted Investment Incentive and Economic Growth Act of 1997

TABLE OF CONTENTS:

Title I: Taxation of Capital Gains and Losses

Title II: Retirement Savings

Title III: Performance Stock Options

Title IV: Employer-Provided Training

Title V: Estate Tax Relief

Title VI: Transportation Investment

Targeted Investment Incentive and Economic Growth Act of 1997 - Title I: Taxation of Capital Gains and Losses - Amends the Internal Revenue Code (IRC) to recognize gain from the sale of any small business investment, if a taxpayer so elects, only to the extent that the amount realized from such sale exceeds the cost of any other eligible small business investment purchased within six months, reduced by any portion of such cost previously taken into account.

(Sec. 102) Triples the amount of loss, which otherwise would be treated as a loss from the sale or exchange of a capital asset, which an individual may treat as an ordinary loss on small business stock issued to such individual. Provides for the application of such treatment to partnership interests.

(Sec. 103) Makes the 50 percent exclusion for gain from the sale or exchange of certain qualified small business stock available to corporations. Doubles the aggregate gross assets permitted a qualifying small business concerning such exclusion. Repeals the minimum tax preference.

(Sec. 104) Revises provisions concerning the exclusion of gain from the sale of a principal residence for individuals who are 55 or older to, among other things: (1) remove any reference to the taxpayer's age; (2) double the dollar limitation; (3) reduce from three out of five years to two out of five years the period during which the property must have been used as the principal residence; and (4) make the exclusion applicable to one sale or exchange every two years, rather than applicable to only one sale or exchange.

Title II: Retirement Savings - Increases from $2,000 to $2,500 the maximum deduction allowable for contributions to individual retirement plans.

(Sec. 202) Adds a new section to the IRC which, subject to limitations, provides that if a taxpayer has a qualified net farm gain from the sale of a qualified farm asset, then, the taxpayer can elect that the gain from the sale shall be recognized only to the extent that such gain exceeds the contributions to one or more asset rollover accounts for the taxpayer for the year in which the sale occurs.

Title III: Performance Stock Options - Adds a new section to the IRC which provides, under stated conditions, that if the transfer of a share of stock to an individual pursuant to the exercise of a performance stock option is made and no disposition of such share is made within one year of the transfer then: (1) no income shall result to the individual; (2) no deduction shall be allowed to the employer; and (3) no amount, other than the price paid under the option, shall be considered as received by the employer.

(Sec. 302) Excludes from gross income 50 percent of the gain from the disposition of any stock acquired pursuant to the exercise of a performance stock option, if such disposition occurs more than two years after the date on which such option was exercised with respect to such stock.

Title IV: Employer-Provided Training - Extends indefinitely the exclusion for employer educational assistance programs.

(Sec. 402) Provides for a study of nondiscrimination rules applicable to educational assistance programs.

Title V: Estate Tax Relief - Adds a new section to the IRC which provides, in general, that, in the case of certain estates, the value of the gross estate shall not include the lesser of: (1) the adjusted value of the qualified family-owned business interests of the decedent otherwise includible in the estate; or (2) $900,000, reduced by the amount of any exclusion allowed under such new section with respect to the estate of a previously deceased spouse of the decedent.

(Sec. 502) Increases the portion of the estate tax subject to the four percent interest rate.

(Sec. 503) Exempts cash rentals of farmland or other land used for a trade or business from recapture of the special estate tax valuation when a qualified heir rents such property on a net cash basis to a member of the decedent's family if, during the period of the lease, such member of the decedent's family uses such property for farming or for the trade or business.

Title VI: Transportation Investment - Provides for the use by the States of a portion of their unobligated balances of apportioned Highway Trust Fund revenues for transportation infrastructure improvements.