MODIFICATION OF RULES RELATING TO THE TAXATION OF UNEARNED INCOME OF CERTAIN CHILDREN.

SEC. 501. MODIFICATION OF RULES RELATING TO THE TAXATION OF UNEARNED INCOME OF CERTAIN CHILDREN. (a) In General.—Section 1(j) of the Internal Revenue Code of 1986 is amended by striking paragraph (4). (b) Coordination With Alternative Minimum Tax.—Section 55(d)(4)(A) of the Internal Revenue Code of 1986 is amended by striking “and” at the end of clause (i)(II), by striking the period at the end of clause (ii)(III) and inserting “, and”, and by adding at the end the following new clause: “(iii) subsection (j) of section 59 shall not apply.” . (c) [26 U.S.C. 1 note] Effective Date.— (1) In general.—Except as otherwise provided in this subsection, the amendment made by subsection (a) shall apply to taxable years beginning after December 31, 2019. (2) Coordination with alternative minimum tax.—The amendment made by subsection (b) shall apply to taxable years beginning after December 31, 2017. (3) Elective retroactive application.—A taxpayer may elect (at such time and in such manner as the Secretary of the Treasury (or the Secretary’s designee) may provide) for the amendment made by subsection (a) to also apply to taxable years of the taxpayer which begin in 2018, 2019, or both (as specified by the taxpayer in such election).