,i  #aae? ,,congress  #a/ ,session  ,h4 
,r4 #aaf  ,,9 ,,! ,,h\se ,,(            
,,repres5tatives  ,janu>y #c1 #bjag,mr4 
,bu*anan introduc$ ! foll[+ bill2 :i* 0 
ref]r$ to ! ,committee on ,ways & ,means
  ,a ,,bill  ,to am5d ! ,int]nal ,rev5ue
 ,code ( #aihf to ensure t pass-?r\gh   
bus9esses d n pay tax at a high] rate   
?an corporations4  #a4 ,%ort title ,?is 
,act may be cit$ z ! ,ma9 ,/reet        
,fairness ,act4  #b4 ,bus9ess income (  
pass-?r\gh entities & individuals  7a7  
,qualifi$ bus9ess income tax$ at        
corporate rate ,section #a ( ! ,int]nal 
,rev5ue ,code ( #aihf is am5d$ by       
r$esignat+ subsection 7i7 z subjection  
7j7 & by ins]t+ aft] subsection 7h7 !   
foll[+3  7i7 ,qualifi$ bus9ess income   
7#a7 ,9 g5]al ,if a taxpay] has qualifi$
 bus9ess income = any taxable ye>1 ! tax
 impos$ by ?is section = su* taxable ye>
 %all n exce$ ! sum (--  7,a7 a tax     
comput$ at ! rates & 9 ! same mann] z if
 ?is subsection _h n be5 enact$ on !    
great] (--  7i7 taxable income r$uc$ by 

! sum ( net capital ga9 plus qualifi$   
bus9ess income1 or  7ii7 ! am\nt det]m9$
 "u clause 7i7 plus s mu* ( qualifi$    
bus9ess income t1 :5 add$ toge!r1 w\ld n
 be tax$ at a rate great] ?an ! maximum 
rate 9 effect "u section #aa7;b71  7,b7 
tax on qualifi$ bus9ess income r$uc$ by 
! am\nt ( qualifi$ bus9ess income on :i*
 a tax is det]m9$ "u subp>agraph 7,a7   
7if any71 det]m9$ "u section #aa = !    
taxable ye> by treat+ qualifi$ bus9ess  
income z taxable income ( a corporation1
 plus  7,c7 a tax on net capital ga91   
comput$ z if subsection 7h7 impos$ a tax
 on net capital ga94  7#b7 ,qualifi$    
bus9ess income def9$ ,= purposes ( ?is  
subsection--  7,a7 ,qualifi$ bus9ess    
income ,! t]m qualifi$ bus9ess income   
means all items ( income1 d$uction1     
loss1 or cr$it prop]ly attributable to !
 taxpay] f ! active conduct ( a trade or
 bus9ess 9 :i*--  7i7 9 ! case ( a      
p>tn]%ip1 ! taxpay] holds a capital or  
pr(its int]e/1  7ii7 9 ! case ( an ,s   
corporation1 ! taxpay] is a %>ehold]1   

7iii7 9 ! case ( a sole proprietor%ip or
 an entity o!rwise disreg>d$ z sep>ate f
 its sole own]1 ! taxpay] is ! sole     
own]1 &  7iv7 9 ! case ( a tru/ or      
e/ate1 ! taxpay] is a b5efici>y4  7,b7  
,net capital ga9 ,su* t]m %all n include
 any item tak5 into acc\nt 9 det]m9+ net
 capital ga94  7,c7 ,exception =        
f9ancial s]vices income ( p>tn]%ips ,9 !
 case ( a taxpay] :o holds a capital or 
pr(its int]e/ 9 a p>tn]%ip1 su* t]m does
 n include f9ancial s]vices income 7z   
def9$ 9 section #ijd7;d77#b77;,d774     
7#c7 ,limitation ,p>agraph 7#a7 %all    
only apply to a taxable ye> 9 :i* !     
maximum rate ( tax "u ?is section exce$s
 ! maximum rate ( tax "u section #aa4   
7#d7 ,net capital ga9 ,= purposes ( ?is 
subsection1 ! t]m net capital ga9 has ! 
mean+ giv5 to su* t]m by subsection 7h74
  7#e7 ,regulations ,! ,secret>y %all   
issue su* regulations or o!r guidance z 
may be necess>y to c>ry out ! purposes (
 ?is subsection4  4  7b7 ,effective date
 ,! am5dm5ts made by ?is section %all   

apply to taxable ye>s beg9n+ aft] ! date
 ( ! enactm5t ( ?is ,act4