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TITLE 26-INTERNAL REVENUE CODE term capital gains for the taxable year, but not to exceed $50,000 ($25,000 in the case of a married indi- vidual filing a separate return)" for "the amount of the subsection (d) gain". Subsec. (b)(2)(B). Pub. L. 94-455, § 1901(b)(33)(L), substituted "net capital gain" for "net section 1201 gain". Subsec. (b)(3). Pub. L. 94-455. § 1901(a)(135)(C)(iii), (b)(33)(L), substituted "the sum referred to in subpar- agraph (A)" for "the amount of the subsection (d) gain" and "net capital gain" for "net section 1201 gain". Subsec. (c). Pub. L. 94-455, § 1901(a)(135)(B), substi- tuted in the catchline "where capital gain exceeds $50,000" for "on capital gain in excess of subsection (d) gain", deleted par. (1) designation, substituted "net capital gain" for "net section 1201 gain" and "50 per- cent of the sum referred to in subsection (b)(2)(A)" for "50 percent of the subsection (d) gain", and deleted par. (2) limitation that the tax computed for purposes of subsec. (b) shall not exceed an amount equal to the following percentage of the excess of the net section 1201 gain over the subsec. (d) gain: (A) 29 percent, in the case of a taxable year be- ginning after Dec. 31, 1969, and before Jan. 1, 1971, or (B) 32 percent, in the case of a taxable year be- ginning after Dec. 31, 1971, and before Jan. 1, 1972. Subsec. (d). Pub. L. 94-455, § 1901(a)(135)(C)(i), rede- signated subsec. (e) as (d) and struck out existing subsec. (d) defining "subsection (d) gain". Subsec. (e). Pub. L. 94-455, § 1901(a)(135)(C)(i), rede- signated subsec. (e) as (d). 1969-Subsec. (a). Pub. L. 91-172 substituted refer- ence to net section 1201 gain for reference to the excess of the net long-term capital gain of a corpora- tion over the net short-term capital loss, substituted "a tax computed on the taxable income reduced by the amount of the net section 1201 gain" for "a partial tax computed on the taxable income reduced by the taxable income reduced by the amount of such excess," struck out reference to tax of an amount equal to 25 percent of excess or in the case of a tax- able year beginning before Apr. 1, 1954 an amount equal to 26 percent of such excess without regard to section 21 of this title, and added in the case of a tax- able year beginning Jan. 1, 1975 a tax of 25 percent of the lesser of the amount of the subsec. (d) gain, or the amount of the net section 1201 gain, and a tax of 30 percent (28 percent in the case of a taxable year begin- ning after Dec. 31, 1969 and before Jan. 1, 1971) of the excess (if any) of the net section 1201 gain over the subsec. (d) gain, and in case of a taxable year begin- ning after Dec. 31, 1974, a tax of 30 percent of the net section 1201 gain. Subsec. (b). Pub. L. 91-172 substituted reference to net section 1201 gain for reference to the excess of the net long-term capital gain over the net short-term cap- ital loss, substituted 'a tax computed on the taxable income reduced by an amount equal to 50 percent of the net section 1201 gain" for "a partial tax computed on the taxable income reduced by an amount equal to 50 percent of such excess," struck out reference to tax of an amount equal to 25 percent of the excess of the net long-term capital gain over the net short-term cap- ital loss, and added reference to a tax of 25 percent of the lesser of the amount of the subsec. (d) gain, or the amount of the net section 1201 gain, and if the amount of the net section 1201 gain exceeds the amount of the subsec. (d) gain, a tax computed as pro- vided in subsec. (c) on such excess. Subsec. (c). Pub. L. 91-172 added subsec. (c). Former subsec. (c) redesignated (e)(1). Subsec Cd). Pub. L. 91-172 added subsec. (d). Subsec. Ce). Pub. L. 91-172 redesignated former subsec. Cc) as par. (1) and added pars. (2) and (3). 1962--Subsec. Ca). Pub. L. 87-834 substituted "sec- tion 821(a) or (c)" for section 821(a)(1) or (b)". 1959-Subsec. (a). Pub. L. 86-69 eliminated reference to section 802(a). Subsec. (c). Pub. L. 86-69 added subsec. (c). 1956-Subsec. Ca). Act Mar. 13, 1956, inserted refer. ence to section 802(a). EFFCTIVE DATE OF 1976 AMNiDMENr Amendment by Pub. L. 94-455 applicable with re- spect to taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94-455, set out as an Ef- fective Date of 1976 Amendment note under section 2 of this title. EFECTxVE DATE OF 1969 AMENDMENT Section 511(d) of Pub. L. 91-172 provided that: "The amendments made by this section (amending this sec- tion and sections 802, 852, 857 and 1378 of this title] shall apply to taxable years beginning after December 31, 1969." EFEcTIvE DATE OF 1959 AMENDMENT Amendment by Pub. L. 86-69 applicable only with respect to taxable years beginning after Dec. 31, 1957, see section 4 of Pub. L. 86-69, set out as an Effective Date note under section 801 of this title. EFFECTIVE DATE OF 1956 AMEND&ENT Amendment by act Mar. 13, 1956. applicable only to taxable years beginning after Dec. 31, 1954, see section 6 of act Mar. 13, 1956, set out as an Effective Date of 1956 Amendment note under section 821 of this title. CROSS REFERENCES Alternative tax for mutual savings banks, see section 594 of this title. Corporate estimated tax defined, see sections 6154 and 6655 of this title. Definitions- Net long term capital gain, see section 1222 of this title. Net short term capital loss, see section 1222 of this title. Normal tax and surtax on corporations, see section 11 of this title. Rates of income tax on individuals, see section 1 of this title. Tax on nonresident alien individuals, see section 871 of this title. SECTION REFERIED TO IN OTHER SECTIONS This section is referred to in sections 5, 12, 57, 527, 594, 802, 821, 852, 871, 877, 882, 911, 1304, 1378, 1381, 6154, 6425, 6655 of this title. SECTION REFERRED TO IN D.C. CODE This section is referred to in section 47-1551c of the District of Columbia Code. § 1202. Deduction for capital gains If for any taxable year, a taxpayer other than a corporation has a net capital gain, 50 percent of the amount of the net capital gain shall be a deduction from gross income. In the case of an estate or trust, the deduction shall be computed by excluding the portion (if any), of the gains for the taxable year fi'om sales or exchanges of capital assets, which, under sections 652 and 662 (relating to inclusions of amounts in gross income of beneficiaries of trusts), is Includible by the income beneficiaries as gain derived from the sale or exchange of capital assets. (Aug. 16, 1954, ch. 736, 68A Stat. 320; Oct. 4, 1976, Pub. L. 94-455, title XIX, § 1901(b)(33)(M), 90 Stat. 1802.) AMENDMENTS 1976-Pub. L. 94-455 substituted "If for any taxable year, a taxpayer other thah a corporation has a net capital gain, 50 percent of the amount of the net cap- Page 675 § 1202