,i #aad? ,,congress #b;d ,session ,h4 ,r4 #dcgg ,,9 ,,! ,,h\se ,,( ,,repres5tatives ,janu>y #ac1 #bjaf ,mr4 ,nunes 7= himself1 ,mr4 ,tib]i1 ,mr4 ,b\/any1 ,mr4 ,m>*ant1 ,mr4 ,hold+1 ,mr4 ,pitt5g]1 ,mr4 ,palm]1 ,mr4 ,russell1 ,mr4 ,simpson1 ,mr4 ,franks ( ,arizona1 ,mr4 ,/ew>t1 ,mr4 ,calv]t1 ,mr4 ,knight1 ,mrs4 ,mimi ,walt]s ( ,cali=nia1 ,mr4 ,valadao1 ,mr4 ,issa1 ,mr4 ,amodei1 ,mr4 ,yoho1 ,mr4 ,h>dy1 ,mr4 ,cole1 ,mr4 ,pompeo1 ,mr4 ,roe ( ,t5nessee1 ,mr4 ,fleis*mann1 ,mr4 ,emm] ( ,m9nesota1 ,mr4 ,long1 ,mr4 ,brat1 & ,mr4 ,r\z]7 introduc$ ! foll[+ bill2 :i* 0 ref]r$ to ! ,committee on ,ways & ,means ,a ,,bill ,to am5d ! ,int]nal ,rev5ue ,code ( #aihf to tax bus9ess income on a ca% fl[ basis1 & = o!r purposes4 #a4 ,%ort title1 etc 7a7 ,%ort title ,?is ,act may be cit$ z ! ,am]ican ,bus9ess ,competitiv5ess ,act ( #bjae4 7b7 ,am5dm5t ( #aihf ,code ,except z o!rwise expressly provid$1 :5ev] 9 ?is ,act an am5dm5t or repeal is express$ 9 t]ms ( an am5dm5t to1 or repeal (1 a section or o!r provision1 ! ref]5ce %all be consid]$ to be made to a section or o!r provision ( ! ,int]nal ,rev5ue ,code ( #aihf4 7c7 ,table ( cont5ts ,! table ( cont5ts is z foll[s3 ,sec4 #a4 ,%ort title1 etc4 ,sec4 #b4 ,congressional f9d+s4 ,sec4 #c4 ,maximum tax rate = net bus9ess income4 ,sec4 #d4 ,def9ition ( net bus9ess income tax base4 ,sec4 #e4 ,all[ance ( transition basis d$uction4 ,sec4 #f4 ,int]e/ income ( individuals tax$ 9 same mann] z divid5d income2 r$uc$ by int]e/ exp5se4 ,sec4 #g4 ,repeal ( depreciation1 int]national1 & o!r tax provisions4 ,sec4 #h4 ,exp&$ relief = net op]at+ losses4 ,sec4 #i4 ,repeal ( corporate ,,amt & individual ,,amt pref]5ces & adju/m5ts t p]ta9 to capital co/ recov]y4 ,sec4 #aj4 ,repeal ( bus9ess tax cr$its4 ,sec4 #aa4 ,disall[ance ( int]e/ exp5se d$uction1 except qualifi$ resid5ce int]e/4 ,sec4 #ab4 ,ca% me?od ( acc\nt+4 #b4 ,congressional f9d+s 7a7 ,f9d+s relat+ to ! depreciation sy/em ( ,f$]al bus9ess taxation ,congress f9ds ! depreciation sy/em-- 7#a7 is rife ) outdat$ asset classifications1 inaccurate depreciation s*$ules1 t>get$ cr$its & d$uctions1 & t>get$ exp5s+ provisions2 7#b7 rew>ds "s bus9ess activities ov] o!rs2 7#c7 r$uces sav+s & inve/m5t 9 ! ,unit$ ,/ates by increas+ ! rate ( return t is requir$ = inve/m5ts to be viable2 & 7#d7 creates complexity = bo? ! ,int]nal ,rev5ue ,s]vice & bus9esses4 7b7 ,f9d+s relat+ to ! d$uction ( bus9ess int]e/ ,congress f9ds t ! bus9ess int]e/ d$uction-- 7#a7 enc\rages bus9esses to f9ance _! op]ations ) debt2 7#b7 results 9 negative effective tax rates = "s inve/m5ts2 & 7#c7 height5s bankruptcy risk dur+ p]iods ( economic di/ress4 7c7 ,f9d+s relat+ to ! exp5s+ ( inve/m5t ,congress f9ds t all[+ bus9esses to exp5se _! inve/m5ts-- 7#a7 w make m inve/m5t opportunities pr(itable = bus9esses to und]take2 7#b7 w promote inve/m5t 9 ! ,unit$ ,/ates2 7#c7 w limit ! ,gov]nm5t's ability to rew>d specific bus9ess activities ?r\gh ! tax code2 & 7#d7 w simplify bus9ess taxation4 #c4 ,maximum tax rate = net bus9ess income 7a7 ,individual net bus9ess income 7#a7 ,maximum rate ( #be p]c5t ,p>agraph 7#a7 ( section #a7;h7 is am5d$-- 7,a7 9 subp>agraph 7,a7-- 7i7 by /rik+ ! net capital ga9 9 clause 7i7 & ins]t+ ! sum ( ! net capital ga9 & ! net bus9ess income2 & 7ii7 by /rik+ ! adju/$ net capital ga9 9 clause 7ii77,,ii7 & ins]t+ ! sum ( ! adju/$ net capital ga9 & ! net bus9ess income2 & 7,b7 9 subp>agraph 7,e77i7 by /rik+ unrecaptur$ section #abej ga9 & ins]t+ #be-p]c5t rate ga94 7#b7 #be-p]c5t rate ga9 ,subsection 7h7 ( section #a is am5d$ by add+ at ! end ! foll[+3 7#ab7 #be-p]c5t rate ga9 ,= purposes ( ?is subsection-- 7,a7 unrecaptur$ section #abej ga91 plus 7,b7 net bus9ess income4 4 7b7 ,corporate income tax rate r$uction2 tax impos$ only on corporation's net bus9ess income 7#a7 ,9 g5]al ,section #aa is am5d$ to read z foll[s3 #aa4 ,tax ,impos$ 7a7 ,corporations 9 g5]al ,a tax is h]eby impos$ = ea* taxable ye> on ! net bus9ess income ( e corporation4 7b7 ,am\nt ( tax ,! am\nt ( ! tax impos$ by subsection 7a7 %all be ! sum (-- 7#a7 #ae p]c5t ( s mu* ( ! net bus9ess income z does n exce$ #ej1jjj1 & 7#b7 #be p]c5t ( s mu* ( ! net bus9ess income z exce$s #ej1jjj4 ,9 ! case ( a corporation :i* has net bus9ess income 9 excess ( #ajj1jjj = any taxable ye>1 ! am\nt ( tax det]m9$ "u ! prec$+ s5t5ce = su* taxable ye> %all be increas$ by ! less] ( 7i7 #e p]c5t ( su* excess1 or 7ii7 #e1jjj4 4 7#b7 ,con=m+ ,am5dm5t ,p>agraphs 7#a7 & 7#b7 ( section #adde7;e7 are ea* am5d$ by /rik+ #ce p]c5t & ins]t+ #be p]c5t4 7c7 ,effective date ,! am5dm5ts made by ?is section %all apply to taxable ye>s beg9n+ on or aft] ,janu>y #a1 #bjae4 #d4 ,def9ition ( net bus9ess income tax base 7a7 ,9 g5]al ,subtitle ,a is am5d$ by ins]t+ aft] *apt] #b;,a ! foll[+ new *apt]3 #b;,b ,,bus9ess ,,income ,sub*apt] ,a4 ,basic ,rules ,sub*apt] ,b4 ,capital ,contributions1 ,m]g]s1 ,acquisitions1 & ,di/ributions ,sub*apt] ,c4 ,int]national ,provisions ,sub*apt] ,d4 ,f9ancial ,in/itutions ,sub*apt] ,e4 ,o!r ,def9itions ,a ,basic ,rules ,sec4 #adba4 ,net bus9ess income4 #adba4 ,net bus9ess income 7a7 ,9 g5]al ,= purposes ( ?is title1 ! t]m net bus9ess income means1 = a taxable ye> ) respect to a bus9ess entity1 ! am\nt by :i* ! taxable receipts ( ! bus9ess entity = ! taxable ye> exce$ ! d$uctible am\nts = ! bus9ess entity = ! taxable ye>4 7b7 ,taxable receipts 7#a7 ,9 g5]al ,! t]m taxable receipts means all receipts f ! sale ( prop]ty1 use ( prop]ty1 & p]=mance ( s]vices4 7#b7 ,games ( *ance ,am\nts receiv$ = play+ games ( *ance by bus9ess entities engag+ 9 ! activity ( provid+ su* games %all be treat$ z receipts f ! sale ( prop]ty or s]vices4 7#c7 ,9-,k9d receipts ,! taxable receipts attributable to ! receipt ( prop]ty1 use ( prop]ty or s]vices 9 :ole or p>tial ex*ange = prop]ty1 use ( prop]ty or s]vices equal ! fair m>ket value ( ! s]vices or prop]ty receiv$4 7#d7 ,taxes ,! t]m taxable receipts does n include any excise tax1 sales tax1 cu/om duty1 or o!r sep>ately /at$ levy impos$ by a ,f$]al1 ,/ate1 or local gov]nm5t receiv$ by a bus9ess entity 9 connection ) ! sale ( prop]ty or s]vices or ! use ( prop]ty4 7#e7 ,f9ancial receipts 7,a7 ,9 g5]al ,! t]m taxable receipts does n include f9ancial receipts4 7,b7 ,f9ancial receipts ,! t]m f9ancial receipts includes-- 7i7 int]e/1 7ii7 divid5ds & o!r di/ributions by a bus9ess entity1 7iii7 proce$s f ! sale ( /ock1 o!r own]%ip int]e/s 9 bus9ess entities1 or o!r f9ancial in/rum5ts1 7iv7 proce$s f life insurance policies1 7v7 proce$s f annuities1 7vi7 proce$s f curr5cy h$g+ or ex*anges1 & 7vii7 proce$s f o!r f9ancial transactions4 7,c7 ,f9ancial in/rum5t ,! t]m f9ancial in/rum5t means any-- 7i7 %>e ( /ock 9 a corporation1 7ii7 equity own]%ip 9 any widely held or publicly trad$ p>tn]%ip1 tru/1 or o!r bus9ess entity1 7iii7 note1 bond1 deb5ture1 or o!r evid5ce ( indebt$ness1 7iv7 int]e/ rate1 curr5cy1 or equity notional pr9cipal contract1 7v7 evid5ce or int]e/ 91 or a d]ivative f9ancial in/rum5t 91 any f9ancial in/rum5t describ$ 9 clause 7i71 7ii71 7iii71 or 7iv71 or any curr5cy1 includ+ any option1 =w>d contract1 %ort position1 & any simil> f9ancial in/rum5t 9 su* a f9ancial in/rum5t or curr5cy1 & 7vi7 a position :i*-- 7,i7 is n a f9ancial in/rum5t describ$ 9 clause 7i71 7ii71 7iii71 or 7iv71 7,,ii7 is a h$ge ) respect to su* a f9ancial in/rum5t1 & 7,,iii7 is cle>ly id5tifi$ 9 ! deal]'s records z be+ describ$ 9 ?is subp>agraph be=e ! close ( ! day on :i* x 0 acquir$ or ent]$ into4 7c7 ,d$uctible am\nts 7#a7 ,9 g5]al ,! t]m d$uctible am\nts includes = a taxable ye> ) respect to a bus9ess entity-- 7,a7 ! co/ ( bus9ess pur*ases 9 ! taxable ye> 7z det]m9$ "u subsection 7d771 7,b7 comp5sation exp5ses = an individual 7o!r ?an am\nts paid to an individual 9 8 capacity z a bus9ess entity71 or 7,c7 ! co/ ( employ]-provid$ heal? insurance = :i* ! employee1 memb]s ( 8 family1 or p]sons designat$ by him or memb]s ( 8 family are ! b5efici>ies1 7,d7 su* entity's loss c>ryov] d$uction 7det]m9$ "u section #agb71 7,e7 9 ! case ( an entity :i* is a real e/ate inve/m5t tru/1 ! am\nt ( any divid5d paym5t made to a %>ehold] ( su* tru/1 & 7,f7 ! transition basis d$uction 7z det]m9$ "u section #e ( ! ,am]ican ,bus9ess ,competitiv5ess ,act ( #bjae74 7#b7 ,comp5sation exp5ses ,= purposes ( subsection 7a71 ! t]m comp5sation exp5ses means-- 7,a7 wages1 sal>ies or o!r ca% payable = s]vices1 7,b7 any taxes impos$ on ! recipi5t t are )held by ! bus9ess entity1 7,c7 ! co/ ( prop]ty pur*as$ to provide employees ) comp5sation 7o!r ?an prop]ty incid5tal to ! provision ( fr+e b5efits t are exclud$ f income "u ! individual tax71 & 7,d7 ! co/ ( fr+e b5efits o!r ?an heal? insurance d$uctible "u p>agraph 7#a77;,c74 7#c7 ,pass-?ru wages mu/ be reasonable ,= purposes ( p>agraph 7#b77;,a71 am\nts payable z wages1 sal>ies or o!r ca% payable = s]vices by a ,s corporation1 p>tn]%ip1 or o!r pass-?ru entity %all n be treat$ z wages1 sal>ies or o!r ca% payable = s]vices unless su* am\nts are reasonable = ! s]vice r5d]$4 7d7 ,co/ ( bus9ess pur*ases 7#a7 ,bus9ess pur*ases 7,a7 ,9 g5]al ,! t]m bus9ess pur*ases means ! acquisition (-- 7i7 prop]ty1 7ii7 ! use ( prop]ty1 or 7iii7 s]vices1 = use 9 a bus9ess activity4 7,b7 ,examples ,bus9ess pur*ases include 7)\t limitation7 !-- 7i7 pur*ase or r5tal ( real prop]ty1 7ii7 pur*ase or r5tal ( capital equipm5t1 7iii7 pur*ase ( supplies & inv5tory1 7iv7 pur*ase ( s]vices f indep5d5t contractors1 & 7v7 imports = use 9 a bus9ess activity4 7,c7 ,exclusions ,bus9ess pur*ases d n include-- 7i7 paym5ts = use ( money or capital1 su* z int]e/ or divid5ds 7except to ! ext5t t a portion s paid is a fee = f9ancial int]m$iation s]vices71 7ii7 premiums = life insurance1 7iii7 ! acquisition ( sav+s assets or o!r f9ancial in/rum5ts 7z def9$ 9 subsection 7b77#e77;,c771 7iv7 taxes 7except z provid$ 9 subsection 7b77#b7 relat+ to product taxes71 & 7v7 ! co/ ( f9ancial in/rum5ts 7z def9$ 9 subsection 7b77#e77;,c774 7#b7 ,co/ ( bus9ess pur*ases 7,a7 ,9 g5]al ,! t]m co/ ( a bus9ess pur*ase is ! am\nt paid or to be paid = ! bus9ess pur*ase4 7,b7 ,prop]ty & s]vices acquir$ = prop]ty ,if a bus9ess entity receives prop]ty or s]vices f a bus9ess entity 9 :ole or p>tial ex*ange = prop]ty or s]vices1 ! prop]ty or s]vices acquir$ %all be treat$ z if !y 7 pur*as$ = an am\nt equal to ! fair m>ket value ( ! s]vices or prop]ty receiv$4 ,= purposes ( ?is section1 prop]ty includes /ock & o!r equity int]e/s 9 bus9ess o!r ?an /ock or an equity int]e/ 9 ! bus9ess entity acquir+ ! prop]ty or s]vices4 ,see section #adbb = rules on prop]ty or s]vices receiv$ 9 ex*ange = an equity int]e/ 9 ! recipi5t4 7,c7 ,gambl+ paym5ts ,9 ! case ( a bus9ess involv+ gambl+1 lott]ies1 or o!r games ( *ance1 bus9ess pur*ases include am\nts paid to w9n]s4 7e7 ,bus9ess entity & bus9ess activity 7#a7 ,bus9ess entity ,= purposes ( det]m9+ bus9ess income1 ! t]m bus9ess entity means any corporation 7includ+ any ,s corporation71 un9corporat$ association1 p>tn]%ip1 limit$ liability company1 proprietor%ip1 indep5d5t contractor1 individual1 or any o!r p]son1 engag+ 9 bus9ess activity 9 ! ,unit$ ,/ates4 ,an individual %all be consid]$ a bus9ess entity only ) respect to ! individual's bus9ess activities4 7#b7 ,bus9ess activity ,! t]m bus9ess activity means ! sale ( prop]ty or s]vices1 ! leas+ ( prop]ty1 ! developm5t ( prop]ty or s]vices = subsequ5t sale or use 9 produc+ prop]ty or s]vices = subsequ5t sale4 ,! t]m bus9ess activity does n include casual or occasional sales ( prop]ty us$ by an individual 7o!r ?an 9 a bus9ess activity71 su* z ! sale by an individual ( a vehicle us$ by ! individual4 7#c7 ,exception = c]ta9 employees 7,a7 ,9 g5]al ,! t]m bus9ess activity does n include-- 7i7 ! p]=mance ( s]vices by an employee = an employ] t is a bus9ess entity ) respect to ! activity 9 :i* ! employee is engag$1 or 7ii7 ! p]=mance ( regul> dome/ic h\sehold s]vices 7includ+ babysitt+1 h\seclean+1 & lawn cutt+7 by an employee ( an employ] t is an individual or family4 7,b7 ,employee def9$ ,= purposes ( ?is subsection1 ! t]m employee includes an individual p>tn] :o provides s]vices to a p>tn]%ip or an individual memb] :o provides s]vices to a limit$ liability company1 or a proprietor ) respect to comp5sation = s]vices f 8 proprietor%ip4 7f7 ,sav+s assets ,! t]m sav+s assets means /ocks1 bonds1 securities1 c]tificates ( deposits1 inve/m5ts 9 p>tn]%ips & limit$ liability companies1 %>es ( mutual funds1 life insurance policies1 annuities1 & o!r simil> sav+s or inve/m5t assets4 ,b ,capital ,contributions1 ,m]g]s1 ,acquisitions1 & ,di/ributions ,sec4 #adbb4 ,contributions to a bus9ess entity4 ,sec4 #adbb;,a4 ,di/ributions ( prop]ty4 ,sec4 #adbb;,b4 ,asset acquisitions4 ,sec4 #adbb;,c4 ,m]g]s1 /ock acquisitions1 & sp9-(fs1 split-(fs1 etc4 #adbb4 ,contributions to a bus9ess entity 7a7 ,by bus9ess entity 7#a7 ,ca% ,if a bus9ess entity contributes ca% to a bus9ess entity ( :i* x is or becomes a p>tial or full own]1 ! am\nt contribut$ is n a d$uctible am\nt to ! contributor or a taxable receipt to ! recipi5t4 7#b7 ,prop]ty or s]vices ,if a bus9ess entity contributes prop]ty or s]vices to a bus9ess entity ( :i* x is or becomes a p>tial or full own]1 ! transaction w n result 9 taxable receipts to ! contributor or a d$uction = a bus9ess pur*ase = ! recipi5t & w n con/itute a sale result+ 9 taxable receipts to ! contributor4 7b7 ,by individual 7#a7 ,ca% ,if an individual contributes ca% to a bus9ess entity1 ! am\nt contribut$ is n a d$uctible am\nt to ! contributor & ! ca% receiv$ by ! bus9ess entity is n a taxable receipt4 7#b7 ,new prop]ty ,if an individual contributes to a bus9ess entity prop]ty t ! individual pur*as$ = ! bus9ess entity b :i* 0 n us$ by any p]son aft] its pur*ase1 ! prop]ty %all be consid]$ pur*as$ by su* bus9ess entity f ! p]son f :i* ! individual pur*as$ ! prop]ty & ! transaction w n result 9 a d$uctible am\nt to ! contributor4 7#c7 ,p]sonal use prop]ty 7,a7 ,9 g5]al ,if an individual contributes p]sonal use prop]ty to a bus9ess entity 9 :i* ! individual has an own]%ip int]e/ or = :i* ! individual receives an own]%ip int]e/1 ! bus9ess entity %all n be p]mitt$ to d$uct ! value ( ! prop]ty receiv$ z a bus9ess exp5se4 ,! bus9ess entity w h a tax basis 9 ! contribut$ prop]ty equal to ! contributor's basis4 7,b7 ,p]sonal use prop]ty ,! t]m p]sonal use prop]ty means any prop]ty us$ by an individual at any "t o!r ?an 9 a bus9ess activity4 7#d7 ,s]vices ,if an individual contributes s]vices to a bus9ess entity 9 :i* ! individual has an own]%ip int]e/ or receives an own]%ip int]e/1 ! bus9ess entity %all n be p]mitt$ to d$uct ! value ( ! s]vices receiv$ 7or ! value ( ! equity int]e/ provid$ to ! s]vices provid]74 #adbb;,a4 ,di/ributions ( prop]ty 7a7 ,di/ributions o!r ?an to controll+ bus9ess ,if a bus9ess entity di/ributes all or a portion ( its assets to its own]s 7o!r ?an a controll+ bus9ess entity71 ! bus9ess entity w be treat$ z if x sold ! assets to its own]s at fair m>ket value4 ,! fair m>ket value w be det]m9$ by ! di/ribut+ bus9ess entity & ^? det]m9ations1 unless unreasonable1 w be b9d+ on ! recipi5ts4 7b7 ,di/ributions to a controll+ bus9ess ,if a bus9ess entity di/ributes all or a portion ( its assets to a controll+ bus9ess entity1 ! controll+ bus9ess entity w assume ! di/ribut+ entity's tax attributes ) respect to ! assets & nei!r entity w h taxable receipts or a d$uction z a result ( ! transaction4 7c7 ,di/ribution ( p]sonal use prop]ty ,if p]sonal use prop]ty is di/ribut$ to ! individual :o contribut$ ! p]sonal use prop]ty to a bus9ess entity1 ! fair m>ket value ( ! prop]ty = purposes ( subsection 7a7 %all equal ! basis ( ! prop]ty plus any enhancem5t 9 value ( ! prop]ty attributable to bus9ess pur*ases ) respect to ! prop]ty4 7d7 ,controll+ bus9ess entity ,a bus9ess entity is a controll+ bus9ess entity ) respect to ano!r bus9ess entity if x1 or any p]son to :i* x is relat$1 owns directly or indirectly m ?an #ej p]c5t ( ! pr(its or capital int]e/ 9 ! o!r bus9ess entity4 ,= purposes ( ! prec$+ s5t5ce1 a p]son is relat$ to a bus9ess entity if su* p]son owns directly or indirectly m ?an #ej p]c5t ( ! pr(its or capital int]e/ 9 ! bus9ess entity4 7e7 ,application ( ?is section ,?is section applies to bo? liquidat+ & nonliquidat+ di/ributions4 #adbb;,b4 ,asset acquisitions 7a7 ,9 g5]al ,if a bus9ess entity transf]s "s or all ( its assets1 ! consid]ation receiv$ = su* assets %all be allocat$ among ! assets transf]r$ 9 ! same mann] z 0 requir$ by section #ajfj ( ! ,int]nal ,rev5ue ,code ( #aihf4 ,if ! transf]ee & transf]or agree 9 writ+ on ! allocation ( any consid]ation1 or z to ! fair m>ket value ( any ( ! assets1 su* agreem5t %all be b9d+ on bo? ! transf]or & transf]ee unless ! ,secret>y det]m9es t su* allocation 7or fair m>ket value7 is n appropriate4 7b7 ,tax consequ5ces ,! tax consequ5ces ( an asset acquisition %all be det]m9$ 9 accordance ) ! rules ( ?is *apt] & %all be dep5d5t ^u allocations made "u subsection 7a74 ,9 g5]al1 consid]ation allocable to sav+s assets1 su* z /ock 9 ano!r bus9ess entity1 w\ld n be includ$ 9 taxable receipts ( ! transf]or & w\ld n be a bus9ess pur*ase ( ! pur*as]1 b consid]ation allocable to ! sale ( tangible prop]ty & intangible prop]ty 7o!r ?an sav+s assets7 w con/itute taxable receipts ( ! sell] & a bus9ess pur*ase ( ! pur*as]4 7c7 ,election ,to treat asset acquisition z a /ock acquisition ,9 ! case ( ! sale ( sub/antially all ( ! assets ( a bus9ess entity or sub/antially all ( ! assets ( a l9e ( bus9ess or a sep>ately /&+ bus9ess ( a bus9ess entity1 ! transf]ee & transf]or c jo9tly elect to treat ! acquisition z if x 7 an acquisition ( ! /ock ( a bus9ess entity hold+ ! assets s transf]r$4 ,9 su* case1 ! rules ( section #adbb;,c %all apply4 7d7 ,au?ority ,to require allocation agreem5t & notice to ! secret>y ,if ! ,secret>y det]m9es t c]ta9 types ( asset acquisitions h significant possibilities ( tax avoidance1 ! ,secret>y may require-- 7#a7 p>ties to su* types ( acquisitions to ent] into agreem5ts allocat+ consid]ation1 7#b7 p>ties to acquisitions involv+ c]ta9 k9ds ( assets to ent] into agreem5ts allocat+ "p ( ! consid]ation to ^? assets1 or 7#c7 p>ties to c]ta9 acquisitions to report in=mation to ! ,secret>y4 7e7 ,asset acquisition rules d n apply if consid]ation includes equity 9 pur*as] 7#a7 ,9 g5]al ,if a bus9ess entity issues its own equity or equity 9 a subsidi>y or o!r controll$ entity z "p ( ! consid]ation = ! transf] ( assets to x1 ! transaction %all be treat$ z a bus9ess pur*ase & n z an asset acquisition1 & ! taxpay] %all n be entitl$ to a loss c>ryov] = any unus$ d$uction attributable to ! equity portion ( su* transf]4 7#b7 ,equity ,= purposes ( ?is subsection1 equity means-- 7,a7 /ock1 9 ! case ( a corporation1 7,b7 p>tn]%ip or simil> int]e/1 9 ! case ( a p>tn]%ip or limit$ liability company1 & 7,c7 an own]%ip int]e/ or int]e/ 9 pr(its 9 ! case ( any o!r bus9ess entity4 #adbb;,c4 ,m]g]s1 /ock acquisitions1 & sp9-(fs1 split-(fs1 etc 7a7 ,m]g]s ,a m]g] ( "o bus9ess entity into ano!r or two bus9esses entities into a ?ird bus9ess entity or any o!r simil> transaction %all h no direct consequ5ces "u ! bus9ess ca% fl[ tax4 ,! surviv+ entity %all assume ! tax attributes ( ! m]g$ bus9ess entities1 includ+ any loss c>ryov]s & cr$it c>ryov]s4 7b7 ,/ock acquisition ,! acquisition ( all or sub/antially all ( ! own]%ip int]e/ 9 "o bus9ess entity ei!r = ca% or 9 ex*ange = own]%ip 9 ! acquir+ entity or an entity controll$ by ! acquir$ entity %all h no direct consequ5ces "u ! bus9ess ca% fl[ tax4 7c7 ,sp9-,(fs1 split-,(fs1 ,etc ,a sp9-(f1 split-(f or split-up ( a bus9ess entity %all h no direct tax consequ5ces "u ?is *apt]4 ,c ,int]national ,provisions ,sec4 #adbc4 ,no tax impos$ on income d]iv$ f trade or bus9ess outside ! ,unit$ ,/ates4 ,sec4 #adbc;,a4 ,no cr$it all[$ = =eign taxes on income d]iv$ f trade or bus9ess outside ! ,unit$ ,/ates4 ,sec4 #adbc;,b4 #e-p]c5t toll *>ge on undi/ribut$ =eign e>n+s4 #adbc4 ,no tax impos$ on income d]iv$ f trade or bus9ess outside ! ,unit$ ,/ates 7a7 ,9 g5]al ,only taxable receipts & d$uctible am\nts :i* are effectively connect$ ) ! conduct ( a trade or bus9ess )9 ! ,unit$ ,/ates %all be includ$ or d$uct$ 9 ! computation ( net bus9ess income4 7b7 ,no tax %all be impos$ "u ?is title on income effectively connect$ ) ! conduct ( a trade or bus9ess t is n a trade or bus9ess )9 ! ,unit$ ,/ates4 #adbc;,a4 ,no cr$it all[$ = =eign taxes on income d]iv$ f trade or bus9ess outside ! ,unit$ ,/ates 7a7 ,9 g5]al ,no cr$it %all be all[$ "u ?is title = any income1 w> pr(its1 or excess pr(its taxes paid or accru$ ) respect to income effectively connect$ ) ! conduct ( a trade or bus9ess t is n a trade or bus9ess )9 ! ,unit$ ,/ates4 7b7 ,unus$ =eign tax cr$its ,"u regulations prescrib$ by ! ,secret>y1 any taxpay] t is a corporation may elect to treat =eign tax cr$it c>ryov]s f taxable ye>s beg9n+ prior to ,janu>y #a1 #bjae1 z g5]al bus9ess cr$it c>ryov]s4 #adbc;,b4 #e-p]c5t toll *>ge on undi/ribut$ =eign e>n+s ,!re is h]eby impos$ on any dome/ic corporation :i* owns #aj p]c5t or m ( ! vot+ /ock ( a =eign corporation a tax equal to #e p]c5t ( ! corporation's po/-#aihf undi/ribut$ e>n+s = ! corporation's la/ taxable ye> beg9n+ prior to ,janu>y #a1 #bjae4 ,= purposes ( ?is subsection1 po/-#aihf undi/ribut$ e>n+s %all be comput$ z provid$ 9 section #ijb7;c77#a7 ( ! ,int]nal ,rev5ue ,code ( #aihf 7z 9 effect prior to ! enactm5t ( ! ,am]ican ,bus9ess ,competitiv5ess ,act ( #bjae71 except t su* undi/ribut$ e>n+s %all be dim9i%$ by ! divid5ds di/ribut$ dur+ su* taxable ye>4 ,except z provid$ 9 regulations prescrib$ by ! ,secret>y1 ! tax impos$ by ?is subsection %all be paid at ! same "t & 9 ! same mann] z ! tax impos$ by section #aa = ! corporation's fir/ taxable ye> beg9n+ on or aft] ,janu>y #a1 #bjae4 ,d ,f9ancial ,in/itutions ,sec4 #adbd4 ,real-plus-f9ancial treatm5t ( c]ta9 transactions involv+ f9ancial in/itutions4 #adbd4 ,real-plus-f9ancial treatm5t ( c]ta9 transactions involv+ f9ancial in/itutions 7a7 ,taxation ( transactions betwe5 f9ancial in/itutions & bus9esses 7#a7 ,g5]al rule ,9 ! case ( a taxpay] t is a f9ancial in/itution1 taxable receipts %all include all am\nts receiv$ 9 cov]$ f9ancial transactions & d$uctible am\nts & %all include all am\nts paid 9 cov]$ f9ancial transactions4 7#b7 ,f9ancial in/itutions ,= purposes ( ?is section1 f9ancial in/itution %all mean1 "u regulations prescrib$ by ! ,secret>y1 any bus9ess entity t is regulat$ by any ,f$]al or ,/ate ag5cy z a f9ancial in/itution4 ,su* t]m includes regulat$ banks1 insurance companies1 inve/m5t banks1 securities brok]s1 & mutual funds4 ,su* t]m does n include cr$it unions4 7#c7 ,cov]$ f9ancial transactions ,= purposes ( ?is section1 cov]$ f9ancial transactions %all mean transactions betwe5 a f9ancial in/itution & a p>ty t is n a bus9ess entity z def9$ 9 section #adba7;e77#a74 ,"u regulations prescrib$ by ! ,secret>y1 transactions t d n involve any significant provision ( f9ancial s]vices 7o!r ?an s]vices = :i* explicit fees are *>g$7 %all be treat$ z n be+ cov]$ f9ancial transactions4 7b7 ,transition rule ,"u regulations prescrib$ by ! ,secret>y1 a tax is impos$ on any f9ancial in/itution equal to #be p]c5t ( ! in/itution's net claims aga9/ p>ties t are n bus9ess entities1 z def9$ 9 section #adba7;e77#a74 ,su* claims %all be valu$ at ! end ( ! f9ancial in/itution's la/ taxable ye> beg9n+ be=e ,janu>y #a1 #bjae1 ) value measur$ by ! in/itution's basis 9 su* claims4 ,except z provid$ 9 regulations prescrib$ by ! ,secret>y1 ! tax impos$ by ?is subsection %all be paid at ! same "t & 9 ! same mann] z ! net bus9ess income tax = ! f9ancial in/itution's fir/ taxable ye> beg9n+ on or aft] ,janu>y #a1 #bjae4 ,e ,o!r ,def9itions ,sec4 #adbe4 ,o!r def9itions4 #adbe4 ,o!r def9itions 7a7 ,9 g5]al ,:5 us$ 9 ?is *apt]1 :]e n o!rwise di/9ctly express$ or manife/ly incompatible ) ! int5t !re(-- 7#a7 ,unit$ ,/ates ,! t]m ,unit$ ,/ates includes ! ,/ates & ! ,di/rict ( ,columbia4 7#b7 ,treatm5t ( possessions 7,a7 ,9 g5]al ,= purposes ( ?is *apt]1 ! ,unit$ ,/ates possessions %all n be treat$ z "p ( ! ,unit$ ,/ates4 7,b7 ,possession ,= purposes ( p>agraph 7#a71 ,unit$ ,/ates possession or possession means a possession ( ! ,unit$ ,/ates & includes ! ,commonweal? ( ,pu]to ,rico1 ! ,commonweal? ( ! ,nor!rn ,m>ianas ,isl&s1 ,guam1 ,am]ican ,samoa1 & ! ,unit$ ,/ates ,virg9 ,isl&s4 7#c7 ,def9itions g5]ally ,any def9ition includ$ 9 ?is *apt] %all apply = all purposes ( ?is *apt] unless-- 7,a7 su* def9ition is limit$ to ! purposes ( a p>ticul> *apt]1 section1 or subsection1 or 7,b7 ! def9ition cle>ly w\ld n be applicable 9 a p>ticul> context4 7b7 ,int]pretations consi/5t ) re/ ( ,int]nal ,rev5ue ,code ( #aihf ,t]ms n def9$ 9 ?is *apt]1 b def9$ else:]e 9 ?is title1 %all be int]pret$ 9 a mann] consi/5t ) ?is title1 except to ! ext5t su* int]pretation w\ld be inconsi/5t ) ! pr9ciples & purposes ( ?is *apt]4 4 7b7 ,exempt organizations & unrelat$ bus9ess income ,sections #eab & #ead are bo? am5d$ by /rik+ gross income ea* place x appe>s & ins]t+ net bus9ess income4 7c7 ,effective date ,! am5dm5ts made by ?is section %all apply to taxable ye>s beg9n+ on or aft] ,janu>y #a1 #bjae1 except to ! ext5t o!rwise specifically provid$ 9 ! text ( su* am5dm5ts4 #e4 ,all[ance ( transition basis d$uction ,9 ! case ( any prop]ty held by ! taxpay] on ,decemb] #ca1 #bjad1 & us$ 9 a trade or bus9ess ( ! taxpay] on su* date1 ! foll[+ rules %all apply3 7#a7 ,basis ,! basis ( su* prop]ty %all be z]o4 7#b7 ,d$uction 7,a7 ,9 g5]al ,!re %all be all[$ to ! taxpay] a d$uction ) respect to su* prop]ty1 o!r ?an l&4 7,b7 ,am\nt ( d$uction ,except z provid$ 9 subp>agraph 7,d71 su* d$uction %all be det]m9$ = a taxable ye> by amortiz+ ! basis ( su* prop]ty on ! same s*$ule & me?od t appli$ to su* prop]ty be=e ! enactm5t ( ?is ,act4 7,c7 ,disposal ( prop]ty ,subp>agraph 7,a7 %all apply ) respect to prop]ty held by ! taxpay] on ,decemb] #ca1 #bjad1 :e!r or n ! taxpay] disposes ( su* prop]ty aft] ,decemb] #ca1 #bjad4 7,d7 ,inv5tory ,9 ! case ( inv5tory1 ! d$uction all[$ by subp>agraph 7,a7 %all be all[$ 9 ! taxable ye> ( ! taxpay] :i* includes ,janu>y #a1 #bjae4 #f4 ,int]e/ income ( individuals tax$ 9 same mann] z divid5d income2 r$uc$ by int]e/ exp5se 7a7 ,9 g5]al ,subp>agraph 7,a7 ( section #a7;h77#aa7 is am5d$ by /rik+ qualifi$ divid5d income & ins]t+ ! sum ( qualifi$ divid5d income & qualifi$ int]e/ income & r$uc$ by int]e/ exp5se4 7b7 ,qualifi$ int]e/ income ,p>agraph 7#aa7 ( section #a7;h7 is am5d$ by add+ at ! end ! foll[+3 7,e7 ,qualifi$ int]e/ income ,= purposes ( ?is p>agraph1 ! t]m qualifi$ int]e/ income means-- 7i7 int]e/ on deposits ) a bank 7z def9$ 9 section #eha71 7ii7 am\nts 7:e!r or n designat$ z int]e/7 paid1 9 respect ( deposits1 inve/m5t c]tificates1 or )drawable or repur*asable %>es1 by-- 7,i7 a mutual sav+s bank1 coop]ative bank1 dome/ic build+ & loan association1 indu/rial loan association or bank1 or cr$it union1 or 7,,ii7 any o!r sav+s or ?rift in/itution :i* is *>t]$ & sup]vis$ "u ,f$]al or ,/ate law1 ! deposits or acc\nts 9 :i* are insur$ "u ,f$]al or ,/ate law or :i* are protect$ & gu>ante$ "u ,/ate law1 7iii7 int]e/ on-- 7,i7 evid5ces ( indebt$ness 7includ+ bonds1 deb5tures1 notes1 & c]tificates7 issu$ by a dome/ic corporation 9 regi/]$ =m1 & 7,,ii7 to ! ext5t provid$ 9 regulations prescrib$ by ! ,secret>y1 o!r evid5ces ( indebt$ness issu$ by a dome/ic corporation ( a type (f]$ by corporations to ! public1 7iv7 int]e/ on obligations ( ! ,unit$ ,/ates1 a ,/ate1 or a political subdivision ( a ,/ate 7n exclud$ f gross income ( ! taxpay] "u any o!r provision ( law71 & 7v7 int]e/ attributable to p>ticipation %>es 9 a tru/ e/abli%$ & ma9ta9$ by a corporation e/abli%$ pursuant to ,f$]al law4 4 7c7 ,int]e/ exp5se ,p>agraph 7#aa7 ( section #a7;h71 z am5d$ by subsection 7b71 is am5d$ by ins]t+ at ! end ! foll[+3 7,f7 ,int]e/ exp5se ,! t]m int]e/ exp5se means int]e/ paid by ! taxpay] o!r ?an qualifi$ resid5ce int]e/4 4 7d7 ,con=m+ am5dm5t ,! head+ = section #a7;h77#aa7 is am5d$ by ins]t+ & int]e/ aft] divid5ds4 7e7 ,effective date ,! am5dm5ts made by ?is section %all apply to taxable ye>s beg9n+ aft] ,decemb] #ca1 #bjad4 #g4 ,repeal ( depreciation1 int]national1 & o!r tax provisions 7a7 ,depreciation & co/ recov]y provisions ,! foll[+ sections ( ! ,int]nal ,rev5ue ,code ( #aihf are h]eby repeal$3 7#a7 ,section #afg 7relat+ to depreciation74 7#b7 ,section #afh 7relat+ to accel]at$ co/ recov]y sy/em74 7#c7 ,section #afi 7relat+ to amortization ( pollution control facilities74 7#d7 ,section #agc 7relat+ to circulation exp5ditures74 7#e7 ,section #agd 7relat+ to rese>* & exp]im5tal exp5ditures74 7#f7 ,section #age 7relat+ to soil & wat] cons]vation exp5ditures2 endang]$ species recov]y exp5ditures74 7#g7 ,section #agf 7relat+ to paym5ts ) respect to employees ( c]ta9 =eign corporations74 7#h7 ,section #agh 7relat+ to amortization ( co/ ( acquir+ a lease74 7#i7 ,section #agi 7relat+ to election to exp5se c]ta9 depreciable bus9ess assets74 7#aj7 ,section #agi;,a 7relat+ to d$uction = clean-fuel vehicles & c]ta9 refuel+ prop]ty74 7#aa7 ,section #agi;,b 7relat+ to d$uction = capital co/s incurr$ 9 comply+ ) ,environm5tal ,protection ,ag5cy sulfur regulations74 7#ab7 ,section #agi;,c 7relat+ to election to exp5se c]ta9 ref9]ies74 7#ac7 ,section #agi;,d 7relat+ to en]gy effici5t comm]cial build+s d$uction74 7#ad7 ,section #agi;,e 7relat+ to election to exp5se advanc$ m9e safety equipm5t74 7#ae7 ,section #ahj 7relat+ to exp5ditures by f>m]s = f]tiliz]1 etc474 7#af7 ,section #aha 7relat+ to treatm5t ( c]ta9 qualifi$ film & television productions74 7#ag7 ,section #aij 7relat+ to exp5ditures to remove ar*itectural & transportation b>ri]s to ! h&icapp$ & eld]ly74 7#ah7 ,section #aib 7relat+ to contributions to black lung b5efit tru/74 7#ai7 ,section #aic 7relat+ to t]ti>y injectants74 7#bj7 ,section #aid 7relat+ to treatm5t ( re=e/ation exp5ditures74 7#ba7 ,section #aie 7relat+ to />t-up exp5ditures74 7#bb7 ,section #aif 7relat+ to d$uction = c]ta9 unus$ bus9ess cr$its74 7#bc7 ,section #aig 7relat+ to amortization ( goodwill & c]ta9 o!r intangibles74 7#bd7 ,section #aih 7relat+ to exp5s+ ( environm5tal rem$iation co/s74 7#be7 ,section #aih;,a 7relat+ to exp5s+ ( qualifi$ disa/] exp5ses74 7#bf7 ,section #aii 7relat+ to income attributable to dome/ic production activities74 7#bg7 ,section #bfc 7relat+ to capital exp5ditures74 7#bh7 ,section #bfc;,a 7relat+ to capitalization & inclusion 9 inv5tory co/s ( c]ta9 exp5ses74 7#bi7 ,section #dga 7relat+ to g5]al rule = inv5tories74 7#cj7 ,section #dgb 7relat+ to la/-91 fir/-out inv5tories74 7#ca7 ,section #dgc 7relat+ to qualifi$ liquidations ( ,,lifo inv5tories74 7#cb7 ,section #dgd 7relat+ to simplifi$ doll>-value ,,lifo me?od = c]ta9 small bus9esses74 7#cc7 ,section #faa 7relat+ to all[ance ( d$uction = depletion74 7#cd7 ,section #fab 7relat+ to basis = co/ depletion74 7#ce7 ,section #fac 7relat+ to p]c5tage depletion74 7#cf7 ,section #fac;,a 7relat+ to limitations on p]c5tage depletion 9 case ( oil & gas wells74 7#cg7 ,section #fad 7relat+ to def9ition ( prop]ty74 7#ch7 ,section #faf 7relat+ to developm5t exp5ditures74 7#ci7 ,section #fag 7relat+ to d$uction & recapture ( c]ta9 m9+ exploration exp5ditures74 7b7 ,special d$uctions = corporations ,! foll[+ sections ( ! ,int]nal ,rev5ue ,code ( #aihf are h]eby repeal$3 7#a7 ,section #bda 7relat+ to all[ance ( special d$uctions74 7#b7 ,section #bdc 7relat+ to divid5ds receiv$ by corporations74 7#c7 ,section #bdd 7relat+ to divid5ds receiv$ on c]ta9 pref]r$ /ock74 7#d7 ,section #bde 7relat+ to divid5ds receiv$ f c]ta9 =eign corporations74 7#e7 ,section #bdf 7relat+ to rules apply+ to d$uctions = divid5ds receiv$74 7#f7 ,section #bdf;,a 7relat+ to divid5ds receiv$ d$uction r$uc$ :]e portfolio /ock is debt f9anc$74 7#g7 ,section #bdg 7relat+ to divid5ds paid on c]ta9 pref]r$ /ock ( public utilities74 7#h7 ,section #bdh 7relat+ to organizational exp5ditures74 7#i7 ,section #bdi 7relat+ to limitation on d$uction ( bond premium on repur*ase74 7c7 ,recognition ( rev5ue & tim+ ( d$uction provisions ,! foll[+ provisions ( ! ,int]nal ,rev5ue ,code ( #aihf are h]eby repeal$3 7#a7 ,"p ,x ( sub*apt] ,b ( *apt] #a ( ! ,int]nal ,rev5ue ,code ( #aihf 7relat+ to t]m9al railroad corporations & _! %>ehold]s74 7#b7 ,section #def 7relat+ to prepaid dues income ( c]ta9 memb]%ip organizations74 7#c7 ,section #deh 7relat+ to magaz9es1 pap]backs1 & records return$ aft] ! close ( ! taxable ye>74 7#d7 ,section #dfj 7relat+ to special rules = long-t]m contracts74 7#e7 ,section #dfg 7relat+ to c]ta9 paym5ts = ! use ( prop]ty or s]vices74 7#f7 ,section #dfh 7relat+ to special rules = m9+ & solid wa/e reclamation & clos+ co/s74 7d7 ,int]national provisions ,! foll[+ provisions ( ! ,int]nal ,rev5ue ,code ( #aihf are h]eby repeal$3 7#a7 ,section #ijb 7relat+ to deem$ paid cr$it :]e dome/ic corporation owns #aj p]c5t or m ( vot+ /ock ( =eign corporation74 7#b7 ,section #ijg 7relat+ to special rules 9 case ( =eign oil & gas income74 7#c7 ,subp>t ,f ( "p ,,iii ( sub*apt] ,n ( *apt] #a 7relat+ to controll$ =eign corporations7 o!r ?an section #ife4 7#d7 ,subp>t ,g ( "p ,,iii ( sub*apt] ,n ( *apt] #a 7relat+ to export trade corporations74 7#e7 ,"p ,,iv ( "p ,,iii ( sub*apt] ,n ( *apt] #a 7relat+ to dome/ic int]national sales corporations74 7e7 ,effective date 7#a7 ,subsection 7a7 ,! am5dm5ts made by subsection 7a7 %all apply to prop]ty plac$ 9 s]vice aft] ,decemb] #ca1 #bjad1 9 taxable ye>s end+ aft] t date4 7#b7 ,subsection 7b7 ,! am5dm5ts made by subsection 7b7 %all apply ) respect to divid5ds receiv$ or accru$ aft] ,decemb] #ca1 #bjad1 9 taxable ye>s end+ aft] su* date4 7#c7 ,subsections 7c7 & 7d7 ,! am5dm5ts made by subsections 7c7 & 7d7 %all apply to taxable ye>s beg9n+ on or aft] ,janu>y #a1 #bjae4 #h4 ,exp&$ relief = net op]at+ losses 7a7 ,ext5d$ c>ryback2 unlimit$ c>ry=w>d ) int]e/ ,p>agraph 7#a7 ( section #agb7;b7 is am5d$ to read z foll[s3 7#a7 ,ye>s to :i* loss may be c>ri$ 7,a7 ,9 g5]al ,a net op]at+ loss = any taxable ye>-- 7i7 %all be a net op]at+ loss c>ryback to ea* ( ! #e taxable ye>s prec$+ ! taxable ye> ( su* loss1 & 7ii7 %all be a net op]at+ loss c>ryov] to ! succe$+ taxable ye> & add$ to ! d$uction all[able "u subsection 7a7 = su* taxable ye>4 7,b7 ,limitation ,a net op]at+ loss may n be c>ri$ back to any taxable ye> end+ be=e ,janu>y #a1 #bjae1 except t a loss aris+ 9 a taxable ye> beg9n+ 9 cal5d> ye> #bjae or cal5d> ye> #bjaf may be c>ri$ back to ! two prec$+ taxable ye>s4 4 7b7 ,int]e/ on c>ry=w>d ,section #agb7;b7 is am5d$ by add+ at ! end ! foll[+ new p>agraph3 7#d7 ,int]e/ on c>ry=w>d ,! am\nt ( any net op]at+ loss c>ryov] %all1 prior to be+ c>ri$ to a succe$+ taxable ye>1 be increas$ by an am\nt equal to su* c>ryov] multipli$ by ! ,f$]al %ort-t]m rate 7z def9$ 9 section #abgd7;d77 = ! mon? 9 :i* or ) :i* ! taxable ye> ends4 4 7c7 ,con=m+ am5dm5ts 7#a7 ,section #agb7;d77#a7 is am5d$ by ins]t+ 7o!r ?an by reason ( subsection 7b77#a77;,b77 aft] d$uction4 7#b7 ,section #agb is am5d$ by /rik+ subsections 7f71 7i71 & 7j7 & r$esignat+ subsections 7g71 7h71 & 7k7 z subsections 7f71 7g71 & 7h71 respectively4 7d7 ,effective date ,! am5dm5ts made by ?is section %all apply to net op]at+ losses aris+ 9 taxable ye>s beg9n+ aft] ,decemb] #ca1 #bjad4 #i4 ,repeal ( corporate ,,amt & individual ,,amt pref]5ces & adju/m5ts t p]ta9 to capital co/ recov]y 7a7 ,corporate ,,amt ,section #ee7;a77#a77;,b7 is am5d$ by add+ at ! end ! foll[+ flu% s5t5ce3 ,= purposes ( ?is title1 ! t5tative m9imum tax ( any corporation = any taxable ye> end+ aft] ,decemb] #ca1 #bjad1 %all be z]o4 4 7b7 ,individual ,,amt 7#a7 ,section #ef is am5d$-- 7,a7 by /rik+ p>agraphs 7#a71 7#b71 7#c71 7#e71 & 7#f7 ( subsection 7a72 & 7,b7 by /rik+ subsection 7b77#b74 7#b7 ,section #eg is am5d$-- 7,a7 by /rik+ p>agraphs 7#a71 7#b71 7#f71 & 7#g7 ( subsection 7a72 & 7,b7 by /rik+ subsection 7b74 7c7 ,effective date 7#a7 ,corporate ,,amt ,! am5dm5ts made by subsection 7a7 %all apply to taxable ye>s end+ aft] ,decemb] #ca1 #bjad4 7#b7 ,individual ,,amt ,! am5dm5ts made by subsection 7b7 %all apply to am\nts paid or incurr$ aft] ,decemb] #ca1 #bjad4 #aj4 ,repeal ( bus9ess tax cr$its 7a7 ,9 g5]al ,subp>ts ,d & ,e ( "p ,,iv ( sub*apt] ,a ( *apt] #a are h]eby repeal$4 7b7 ,special rule = c>ryback & c>ry=w>d ( unus$ cr$its ,any c>ryback or c>ry=w>d t arose "u section #ci ( ! ,int]nal ,rev5ue ,code ( #aihf 7z 9 effect be=e ! repeal ( su* section by subsection 7a77 %all be all[$ "u section #ch ( su* ,code 7z 9 effect be=e ! repeal ( su* section by subsection 7a771 9 accordance ) ! t]ms ( su* sections 7z s 9 effect74 7c7 ,effective date ,! repeals made by ?is section %all apply ) respect to am\nts paid or incurr$1 & prop]ty plac$ 9 s]vice1 9 taxable ye>s beg9n+ aft] ,decemb] #ca1 #bjad4 #aa4 ,disall[ance ( int]e/ exp5se d$uction1 except qualifi$ resid5ce int]e/ 7a7 ,9 g5]al ,section #afc is am5d$ by add+ at ! end ! foll[+3 7#a7 9 subsection 7a7 by /rik+ ,!re & ins]t+ ,except z provid$ by subsection 7n71 !re1 7#b7 by r$esignat+ subsection 7n7 z subsection 7o71 & 7#c7 by ins]t+ aft] subsection 7m7 ! foll[+ new subsection3 7n7 ,t]m9ation 7#a7 ,9 g5]al ,except z provid$ by subsection 7h77#b77;,d7 & p>agraph 7#b71 ?is section %all n apply to int]e/ paid or accru$ aft] ,decemb] #ca1 #bjad4 7#b7 ,transition int]e/ d$uction 7,a7 ,9 g5]al ,9 ! case ( a taxpay] :o is a corporation1 !re %all be all[$ z a d$uction = a taxable ye> ! sum ( ! mon?ly transition int]e/ d$uctions = ! taxable ye>4 7,b7 ,mon?ly transition int]e/ d$uction ,= purposes ( subp>agraph 7,a7-- 7i7 ,9 g5]al ,! mon?ly transition int]e/ d$uction = any mon? is ! transition int]e/ am\nt multipli$ by ! applicable p]c5tage = su* mon?4 7ii7 ,applicable p]c5tage def9$ ,! t]m applicable p]c5tage means1 ) respect to a mon?1 #ajj p]c5t r$uc$ 7b n bel[ z]o7 by 4#hcc = ea* mon? ( ! transition p]iod occurr+ be=e ! mon? = :i* su* p]c5tage is det]m9$4 7iii7 ,transition int]e/ am\nt ,! transition int]e/ am\nt is ! d$uction all[$ to ! taxpay] "u ?is section = ! la/ full taxable ye> end+ be=e ,janu>y #a1 #bjae4 7iv7 ,transition p]iod ,! t]m transition p]iod means ! #abj-mon? p]iod beg9n+ ) ,janu>y #bjae4 4 7b7 ,effective date ,! am5dm5t made by subsection 7a7 %all apply to int]e/ paid or accru$ on or aft] ,janu>y #a1 #bjae4 #ab4 ,ca% me?od ( acc\nt+ 7a7 ,9 g5]al ,subsection 7a7 ( section #ddf is am5d$ to read z foll[s3 7a7 ,g5]al ,rule ,taxable income %all be comput$ "u ! ca% receipts & disbursem5ts me?od ( acc\nt+4 4 7b7 ,con=m+ am5dm5ts 7#a7 ,section #ddf is am5d$ by /rik+ subsections 7b71 7c71 & 7e74 7#b7 ,! foll[+ sections ( ! ,int]nal ,rev5ue ,code ( #aihf are repeal$3 7,a7 ,section #ddg 7relat+ to me?od ( acc\nt+ = corporations engag$ 9 f>m+74 7,b7 ,section #ddh 7relat+ to limitation on use ( ca% me?od ( acc\nt+74 7c7 ,effective date 7#a7 ,9 g5]al ,! am5dm5ts made by ?is section %all apply to taxable ye>s beg9n+ aft] ,decemb] #ca1 #bjad4 7#b7 ,*ange 9 me?od ( acc\nt+ ,9 ! case ( any taxpay] requir$ by an am5dm5t made by ?is section to *ange its me?od ( acc\nt+ = its fir/ taxable ye> beg9n+ aft] ! date ( ! enactm5t ( ?is ,act-- 7,a7 su* *ange %all be treat$ z initiat$ by ! taxpay]2 7,b7 su* *ange %all be treat$ z made ) ! cons5t ( ! ,secret>y ( ! ,treasury2 & 7,c7 ! net am\nt ( ! adju/m5ts requir$ to be tak5 into acc\nt by ! taxpay] "u section #dha ( ! ,int]nal ,rev5ue ,code ( #aihf %all be tak5 into acc\nt ratably ov] a p]iod 7n great] ?an #h taxable ye>s7 beg9n+ ) su* fir/ taxable ye>4