INCREASE IN AMOUNT OF ORDINARY INCOME AGAINST WHICH CAPITAL LOSS MAY BE OFFSET.

SEC. 1401. INCREASE IN AMOUNT OF ORDINARY INCOME AGAINST WHICH CAPITAL LOSS MAY BE OFFSET. (a) General Rule.— Subparagraph (B) of section 1211(b)(1) (relating to limitation on capital losses for taxpayers other than corporations) is amended by striking out “$1,000” and inserting in lieu thereof “the applicable amount”. (b) Applicable Amount Defined.— Paragraph (2) of section 1211(b) (relating to limitation on capital losses for taxpayers other than corporations) is amended to read as follows: “(2) Applicable amount.— For purposes of paragraph (1)(B), the term ‘applicable amount’ means— “(A) $2,000 in the case of any taxable year beginning in 1977; and “(B) $3,000 in the case of any taxable year beginning after 1977. In the case of a separate return by a husband or wife, the applicable amount shall be one-half of the amount determined under the preceding sentence.” (c) Effective Date.— The amendments made by this section shall apply to taxable years beginning after December 31, 1976.