Limitation on deductions

(A) In general No deduction shall be allowed— (i) for any miscellaneous itemized deduction (as defined in section 67(b)), or (ii) for any taxes described in paragraph (1), (2), or (3) of section 164(a) or clause (ii) of section 164(b)(5)(A). Clause (ii) shall not apply to any amount allowable in computing adjusted gross income.

(B) Interest In determining the amount allowable as a deduction for interest, subsections (d) and (h) of section 163 shall apply, except that— (i) in lieu of the exception under section 163(h)(2)(D), the term “personal interest” shall not include any qualified housing interest (as defined in subsection (e)), (ii) interest on any specified private activity bond (and any amount treated as interest on a specified private activity bond under section 57(a)(5)(B)), and any deduction referred to in section 57(a)(5)(A), shall be treated as includible in gross income (or as deductible) for purposes of applying section 163(d), (iii) in lieu of the exception under section 163(d)(3)(B)(i), the term “investment interest” shall not include any qualified housing interest (as defined in subsection (e)), and (iv) the adjustments of this section and sections 57 and 58 shall apply in determining net investment income under section 163(d).

(C) Treatment of certain recoveries No recovery of any tax to which subparagraph (A)(ii) applied shall be included in gross income for purposes of determining alternative minimum taxable income.

(D) Standard deduction and deduction for personal exemptions not allowed The standard deduction under section 63(c), the deduction for personal exemptions under section 151, and the deduction under section 642(b) shall not be allowed.

(E) Section 68 not applicable Section 68 shall not apply.