A bill to amend the Internal Revenue Code of 1954 to require conformity between the loan loss reserve accounts maintained by certain financial institutions for tax purposes and for financial statement purposes.

[AI summary unavailable — showing source text] Amends the Internal Revenue Code to permit a bank to take a deduction for the amount necessary to bring its reserve for loan losses for tax purposes up to the level of its loan loss reserve for financial statement purposes. Precludes a deduction for additions to a book reserve in excess of 1.5 percent of the total loans of the institution. Provides further that the addition to the tax reserve for which a deduction is allowed cannot exceed one-half of one percent of the total loans of the taxpayer as of the close of the taxable year, plus net charge-offs. Permits a six-year adjustment period where the tax reserve for bad debts maintained by the taxpayer as of the close of the last taxable year beginning before 1985 is less than the balance of the financial statement reserve for bad debts maintained by the taxpayer as of the close of such taxable year.…