[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 5204 Introduced in Senate (IS)]
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118th CONGRESS
2d Session
S. 5204
To amend the Internal Revenue Code of 1986 to increase the limitations
for deductible new business expenditures, to consolidate provisions for
start-up and organizational expenditures, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
September 25, 2024
Ms. Rosen (for herself, Mrs. Shaheen, Ms. Baldwin, Mr. Wyden, Mr.
Blumenthal, Ms. Klobuchar, Mr. Heinrich, Mr. Coons, and Mr. Warnock)
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 increase the limitations
for deductible new business expenditures, to consolidate provisions for
start-up and organizational expenditures, 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 ``Tax Relief for New Businesses Act''.
SEC. 2. NEW BUSINESS EXPENDITURES.
(a) Consolidation of Deduction for Start-Up and Organizational
Expenditures.--
(1) In general.--Section 195(a) of the Internal Revenue
Code of 1986 is amended by inserting ``or organizational''
after ``start-up''.
(2) Organizational expenditures.--Subsection (c) of section
195 of the Internal Revenue Code of 1986 is amended by adding
at the end the following new paragraph:
``(3) Organizational expenditures.--The term
`organizational expenditures' means any expenditure which--
``(A) is incident to the creation of a corporation
or a partnership,
``(B) is chargeable to capital account, and
``(C) is of a character which, if expended incident
to the creation of a corporation or a partnership
having a limited life, would be amortizable over such
life.''.
(3) Conforming amendments.--
(A) Section 195(b)(1) is amended--
(i) by striking ``with respect to any
start-up expenses'' and inserting ``with
respect to any active trade or business'',
(ii) by striking ``the amount of start-up
expenditures with respect to'' in subparagraph
(A)(i) thereof and inserting ``the aggregate
amount of start-up and organizational
expenditures paid in connection with'', and
(iii) by adding at the end the following
flush sentence:
``In the case of a partnership or S corporation, the election
under the preceding sentence shall be made at the entity
level.''.
(B) Section 195(b)(2) of such Code is amended--
(i) by striking ``amortization period.--In
any case'' and inserting the following:
``amortization period.--
``(A) In general.--In any case'', and
(ii) by adding at the end the following new
subparagraph:
``(B) Special partnership rule.--In the case of a
partnership or S corporation, subparagraph (A) shall be
applied at the entity level.''.
(C) Section 195(b) of such Code is amended by
striking paragraph (3).
(D)(i) Part VIII of subchapter B of chapter 1 of
such Code is amended by striking section 248 (and by
striking the item relating to such section in the table
of sections for such part).
(ii) Section 170(b)(2)(C)(ii) of such Code is
amended by striking ``(except section 248)''.
(iii) Section 312(n)(3) of such Code is amended by
striking ``Sections 173 and 248'' and inserting
``Section 173''.
(iv) Section 535(b)(3) of such Code is amended by
striking ``(except section 248)''.
(v) Paragraphs (3) and (4) of section 545(b) of
such Code are each amended by striking ``(except
section 248)''.
(vi) Section 834(c)(7) of such Code is amended by
striking ``(except section 248)''.
(vii) Section 852(b)(2)(C) of such Code is amended
by striking ``(except section 248)''.
(viii) Section 857(b)(2)(A) of such Code is amended
by striking ``(except section 248)''.
(ix) Section 1363(b) of such Code is amended by
inserting ``and'' at the end of paragraph (2), by
striking paragraph (3), and by redesignating paragraph
(4) as paragraph (3).
(x) Section 1375(b)(1)(B)(i) of such Code is
amended by striking ``(other than the deduction allowed
by section 248, relating to organization
expenditures)''.
(E)(i) Section 709 of such Code is amended to read
as follows:
``SEC. 709. TREATMENT OF SYNDICATION FEES.
``No deduction shall be allowed under this chapter to a partnership
or to any partner of the partnership for any amounts paid or incurred
to promote the sale of (or to sell) an interest in the partnership.''.
(ii) The item relating to section 709 in the table
of sections for part I of subchapter K of chapter 1 of
such Code is amended to read as follows:
``Sec. 709. Treatment of syndication fees.''.
(F) The heading of section 195 of such Code (and
the item relating to such section in the table of
sections for part VI of subchapter B of chapter 1 of
such Code) are each amended by inserting ``and
organizational'' after ``Start-up''.
(b) Increase in Limitation.--Clause (ii) of section 195(b)(1)(A) of
the Internal Revenue Code of 1986 is amended--
(1) by striking ``$5,000'' and inserting ``$50,000'', and
(2) by striking ``$50,000'' and inserting ``$150,000''.
(c) Application of Net Operating Loss Rules.--Section 172 of the
Internal Revenue Code of 1986 is amended by redesignating subsection
(g) as subsection (h) and by inserting after subsection (f) the
following new subsection:
``(g) Special Rules for Start-Up and Organizational Expenditures.--
``(1) In general.--In the case of a taxpayer making an
election under this subsection--
``(A) this section shall be applied separately to
start-up and organizational net operating losses and
other net operating losses,
``(B) in applying this section to start-up and
organizational net operating losses--
``(i) subsection (a)(2)(B) shall be applied
by substituting `100 percent' for `80 percent'
in clause (i) thereof, and
``(ii) subsection (b)(2)(C) shall not
apply, and
``(C) in applying this section to other net
operating losses, for purposes of subsections
(a)(2)(B)(ii)(I) and (b)(2), taxable income shall be
reduced by the amount of the deduction allowed under
this section with respect to start-up and
organizational net operating losses.
``(2) Start-up and organizational net operating loss.--For
purposes of this section, the term `start-up and organizational
net operating loss' means the amount which would be a net
operating loss if the only deduction taken into account were
the deduction allowed under section 195.
``(3) Other net operating losses.--For purposes of this
section, the term `other net operating loss' means the net
operating loss determined without regard to the deduction
allowed under section 195.
``(4) Election.--An election under this section shall be
made at such time and in such form and manner as the Secretary
shall prescribe. Such an election, once made, shall be
irrevocable.''.
(d) Effective Date.--The amendments made by this section shall
apply to expenses paid or incurred in taxable years beginning after
December 31, 2024.
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