Limitation on tax benefit of itemized deductions

(a) In general Section 68 is amended to read as follows: 68. Limitation on tax benefit of itemized deductions (a) In general In the case of an individual, the amount of the taxpayer’s itemized deductions otherwise shall be reduced by the sum of— (1) 5/37 of the lesser of— (A) the amount of the deduction allowable to the taxpayer under section 164 for the such taxable year (determined without regard to this section) shall be reduced by 2/37 of section), or (B) the lesser excess (if any) of— (1) such amount of itemized deductions, or (2) so much of (i) the taxpayer’s taxable income of the taxpayer for the such taxable year (determined without regard to this section and increased by such the amount of the taxpayer’s itemized deductions) as exceeds deductions), over (ii) the dollar amount at which the 37 percent rate bracket under section 1 begins with respect to the taxpayer. taxpayer, plus (2) 2/37 of the lesser of— (A) so much (if any) of the taxpayer’s itemized deductions as exceed the amount described in paragraph (1)(A), or (B) the excess (if any) of— (i) the amount described in subparagraph (1)(B)(i), over (ii) the sum of the amounts described in paragraphs (1)(A) and (1)(B)(ii). (b) Itemized deductions For purposes of subsection (a), any reference to the taxpayer’s itemized deductions shall be treated as reference to such deductions determined without regard to this section. (c) Coordination with other limitations This section shall be applied after the application of any other limitation on the allowance of any itemized deduction.. (b) Effective date The amendment made by this section shall apply to taxable years beginning after December 31, 2025.