[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 197 Introduced in Senate (IS)]
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117th CONGRESS
1st Session
S. 197
To amend the Internal Revenue Code of 1986 to permanently allow a tax
deduction at the time an investment in qualified property is made, and
for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 3, 2021
Mr. Cruz introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to permanently allow a tax
deduction at the time an investment in qualified property is made, and
for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Cost Recovery and Expensing
Acceleration to Transform the Economy and Jumpstart Opportunities for
Businesses and Startups Act'' or the ``CREATE JOBS Act''.
SEC. 2. PERMANENT FULL EXPENSING FOR QUALIFIED PROPERTY.
(a) In General.--Paragraph (6) of section 168(k) of the Internal
Revenue Code of 1986 is amended to read as follows:
``(6) Applicable percentage.--For purposes of this
subsection, the term `applicable percentage' means, in the case
of property placed in service (or, in the case of a specified
plant described in paragraph (5), a plant which is planted or
grafted) after September 27, 2017, 100 percent.''.
(b) Conforming Amendments.--
(1) Section 168(k) of the Internal Revenue Code of 1986 is
amended--
(A) in paragraph (2)--
(i) in subparagraph (A)--
(I) in clause (i)(V), by inserting
``and'' at the end,
(II) in clause (ii), by striking
``clause (ii) of subparagraph (E),
and'' and inserting ``clause (i) of
subparagraph (E).'', and
(III) by striking clause (iii),
(ii) in subparagraph (B)--
(I) in clause (i)--
(aa) by striking subclauses
(II) and (III), and
(bb) by redesignating
subclauses (IV) through (VI) as
subclauses (II) through (IV),
respectively,
(II) by striking clause (ii), and
(III) by redesignating clauses
(iii) and (iv) as clauses (ii) and
(iii), respectively,
(iii) in subparagraph (C)--
(I) in clause (i), by striking
``and subclauses (II) and (III) of
subparagraph (B)(i)'', and
(II) in clause (ii), by striking
``subparagraph (B)(iii)'' and inserting
``subparagraph (B)(ii)'', and
(iv) in subparagraph (E)--
(I) by striking clause (i), and
(II) by redesignating clauses (ii)
and (iii) as clauses (i) and (ii),
respectively, and
(B) in paragraph (5)(A), by striking ``planted
before January 1, 2027, or is grafted before such date
to a plant that has already been planted,'' and
inserting ``planted or grafted''.
(2) Section 460(c)(6)(B) of such Code is amended by
striking ``which'' and all that follows through the period and
inserting ``which has a recovery period of 7 years or less.''.
(c) Effective Date.--The amendments made by this section shall take
effect as if included in section 13201 of Public Law 115-97.
SEC. 3. NEUTRAL COST RECOVERY DEPRECIATION ADJUSTMENT FOR RESIDENTIAL
RENTAL PROPERTY AND NONRESIDENTIAL REAL PROPERTY.
(a) In General.--Section 168 of the Internal Revenue Code of 1986
is amended by adding at the end thereof the following new subsection:
``(n) Neutral Cost Recovery Depreciation Adjustment for Residential
Rental Property and Nonresidential Real Property.--
``(1) In general.--In the case of any applicable property,
the deduction under this section with respect to such property
for any taxable year after the taxable year during which the
property is placed in service shall be--
``(A) the amount determined under this section for
such taxable year without regard to this subsection,
multiplied by
``(B) the applicable neutral cost recovery ratio
for such taxable year.
``(2) Applicable neutral cost recovery ratio.--For purposes
of paragraph (1), the applicable neutral cost recovery ratio
for the applicable property for any taxable year is the number
determined by--
``(A) dividing--
``(i) the gross domestic product deflator
for the calendar quarter ending in such taxable
year which corresponds to the calendar quarter
during which the property was placed in service
by the taxpayer, by
``(ii) the gross domestic product deflator
for the calendar quarter during which the
property was placed in service by the taxpayer,
and
``(B) then multiplying the number determined under
subparagraph (A) by the number equal to 1.03 to the nth
power where `n' is the number of full years in the
period beginning on the 1st day of the calendar quarter
during which the property was placed in service by the
taxpayer and ending on the day before the beginning of
the corresponding calendar quarter ending during such
taxable year.
The applicable neutral cost recovery ratio shall never be less
than 1. The applicable neutral cost recovery ratio shall be
rounded to the nearest \1/1000\.
``(3) Special rule for existing property.--In the case of
any applicable property which is placed in service before the
date of enactment of this subsection, subparagraphs (A)(ii) and
(B) of paragraph (2) shall be applied by substituting `calendar
quarter which includes the date of enactment of this
subsection' for `calendar quarter during which the property was
placed in service by the taxpayer' each place it appears.
``(4) Gross domestic product deflator.--For purposes of
paragraph (2), the gross domestic product deflator for any
calendar quarter is the implicit price deflator for the gross
domestic product for such quarter (as shown in the first
revision thereof).
``(5) Election not to have subsection apply.--This
subsection shall not apply to any applicable property if the
taxpayer elects not to have this subsection apply to such
property. Such an election, once made, shall be irrevocable.
``(6) Additional deduction not to affect basis or
recapture.--
``(A) In general.--The additional amount determined
under this section by reason of this subsection shall
not be taken into account in determining the adjusted
basis of any applicable property or of any interest in
a pass-thru entity which holds such property and shall
not be treated as a deduction for depreciation for
purposes of sections 1245 and 1250.
``(B) Pass-thru entity defined.--For purposes of
subparagraph (A), the term `pass-thru entity' means--
``(i) a regulated investment company,
``(ii) a real estate investment trust,
``(iii) an S corporation,
``(iv) a partnership,
``(v) an estate or trust, and
``(vi) a common trust fund.
``(7) Applicable property.--For purposes of this
subsection, the term `applicable property' means residential
rental property or nonresidential real property (as such terms
are defined in subsection (e)(2)).''.
(b) Minimum Tax Treatment.--Paragraph (1) of section 56(a) of the
Internal Revenue Code of 1986 is amended by adding at the end thereof
the following new subparagraph:
``(E) Use of neutral cost recovery ratio.--In the
case of property to which section 168(n) applies, the
deduction allowable under this paragraph with respect
to such property for any taxable year (after the
taxable year during which the property is placed in
service) shall be--
``(i) the amount so allowable for such
taxable year without regard to this
subparagraph, multiplied by
``(ii) the applicable neutral cost recovery
ratio for such taxable year (as determined
under section 168(n)).
This subparagraph shall not apply to any property with
respect to which there is an election in effect not to
have section 168(n) apply.''.
(c) Effective Date.--The amendments made by this section shall
apply to property placed in service before, on, or after the date of
the enactment of this Act, with respect to taxable years ending on or
after such date.
SEC. 4. ELIMINATION OF AMORTIZATION OF RESEARCH AND EXPERIMENTAL
EXPENDITURES.
(a) In General.--Subpart A of part III of subtitle C of title I of
Public Law 115-97 is amended by striking section 13206.
(b) Effective Date.--The amendment made by this section shall take
effect on the date of the enactment of this Act.
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