,,ib  ,union ,cal5d> ,no4 #gde  #aae?   
,,congress  #b;d ,session  ,h4 ,r4 #fgef
  ,report ,no4 #aae-ieg  ,,9 ,,! ,,h\se 
,,( ,,repres5tatives  ,septemb] #aj1    
#bjah ,mr4 ,bu*anan 7= himself1 ,mr4    
,brady ( ,texas1 ,mr4 ,sam ,johnson (   
,texas1 ,mr4 ,nunes1 ,mr4 ,rei*]t1 ,mr4 
,roskam1 ,mr4 ,smi? ( ,nebraska1 ,ms4   
,j5k9s ( ,kansas1 ,mr4 ,pauls51 ,mr4    
,m>*ant1 ,mrs4 ,black1 ,mr4 ,re$1 ,mr4  
,r5acci1 ,mr4 ,kelly ( ,p5nsylvania1    
,mrs4 ,noem1 ,mr4 ,hold+1 ,mr4 ,smi? (  
,miss\ri1 ,mr4 ,rice ( ,s\? ,c>ol9a1    
,mr4 ,s*weik]t1 ,mrs4 ,walorski1 ,mr4   
,curbelo ( ,florida1 ,mr4 ,bi%op (      
,mi*igan1 ,mr4 ,la,hood1 & ,mr4 ,w5/rup7
 introduc$ ! foll[+ bill2 :i* 0 ref]r$  
to ! ,committee on ,ways & ,means       
,septemb] #bd1 #bjah;,additional        
sponsors3 ,mrs4 ,blackburn1 ,mr4        
,mit*ell1 & ,mr4 ,e/es ( ,kansas        
,septemb] #bd1 #bjah ,report$ ) an      
am5dm5t1 committ$ to ! ,committee ( !   
,:ole ,h\se on ! ,/ate ( ! ,union1 &    
ord]$ to be pr9t$ ,/rike out all aft] ! 

enact+ clause & ins]t ! "p pr9t$ 9      
italic ,= text ( introduc$ bill1 see    
copy ( bill z introduc$ on ,septemb]    
#aj1 #bjah  ,a ,,bill  ,to am5d !       
,int]nal ,rev5ue ,code ( #aihf to       
promote new bus9ess innovation1 & = o!r 
purposes4  #a4 ,%ort title ,?is ,act may
 be cit$ z ! ,am]ican ,innovation ,act (
 #bjah4  #b4 ,simplification & expansion
 ( d$uction = />t-up & organizational   
exp5ditures  7a7 ,9 g5]al ,section #aie 
( ! ,int]nal ,rev5ue ,code ( #aihf is   
am5d$ by r$esignat+ subsections 7c7 &   
7d7 z subsections 7d7 & 7e71            
respectively1 & by /rik+ all t prec$es  
subsection 7d7 7z s r$esignat$7 & ins]t+
 ! foll[+3  #aie4 ,/>t-up &             
organizational exp5ditures  7a7         
,capitalization ( exp5ditures ,except z 
o!rwise provid$ 9 ?is section1 no       
d$uction %all be all[$ = />t-up or      
organizational exp5ditures4  7b7        
,election to d$uct  7#a7 ,9 g5]al ,if a 
taxpay] elects ! application ( ?is      
subsection ) respect to any active trade

 or bus9ess--  7,a7 ! taxpay] %all be   
all[$ a d$uction = ! taxable ye> 9 :i*  
su* active trade or bus9ess beg9s 9 an  
am\nt equal to ! less] (--  7i7 !       
aggregate am\nt ( />t-up &              
organizational exp5ditures paid or      
incurr$ 9 connection ) su* active trade 
or bus9ess1 or  7ii7 #bj1jjj1 r$uc$ 7b n
 bel[ z]o7 by ! am\nt by :i* su*        
aggregate am\nt exce$s #abj1jjj1 &  7,b7
 ! rema9d] ( su* />t-up & organizational
 exp5ditures %all be *>g$ to capital    
acc\nt & all[$ z an amortization        
d$uction det]m9$ by amortiz+ su*        
exp5ditures ratably ov] ! #ahj-mon?     
p]iod beg9n+ ) ! mon? 9 :i* ! active    
trade or bus9ess beg9s4  7#b7           
,application to organizational          
exp5ditures ,9 ! case ( organizational  
exp5ditures ) respect to any corporation
 or p>tn]%ip1 ! active trade or bus9ess 
ref]r$ to 9 p>agraph 7#a7 means ! fir/  
active trade or bus9ess c>ri$ on by su* 
corporation or p>tn]%ip4  7#c7          
,inflation adju/m5t ,9 ! case ( any     

taxable ye> beg9n+ aft] ,decemb] #ca1   
#bjai1 ! #bj1jjj & #abj1jjj am\nts 9    
p>agraph 7#a77;,a77ii7 %all ea* be      
increas$ by an am\nt equal to--  7,a7   
su* doll> am\nt1 multipli$ by  7,b7 !   
co/-(-liv+ adju/m5t det]m9$ "u section  
#a7;f77#c7 = ! cal5d> ye> 9 :i* !       
taxable ye> beg9s1 det]m9$ by sub/itut+ 
cal5d> ye> #bjah = cal5d> ye> #bjaf 9   
subp>agraph 7,a77ii7 !re(4  ,if any     
am\nt z increas$ "u ! prec$+ s5t5ce is n
 a multiple ( #a1jjj1 su* am\nt %all be 
r\nd$ to ! ne>e/ multiple ( #a1jjj4  7c7
 ,all[ance ( d$uction ^u liquidation or 
disposition  7#a7 ,liquidation (        
p>tn]%ip or corporation ,if any p>tn]%ip
 or corporation is completely liquidat$ 
by ! taxpay]1 any />t-up or             
organizational exp5ditures paid or      
incurr$ 9 connection ) su* p>tn]%ip or  
corporation :i* 7 n all[$ z a d$uction  
by reason ( ?is section may be d$uct$ to
 ! ext5t all[able "u section #afe4  7#b7
 ,disposition ( trade or bus9ess ,if any
 trade or bus9ess is completely dispos$ 

( or discont9u$ by ! taxpay]1 any />t-up
 exp5ditures paid or incurr$ 9          
connection ) su* trade or bus9ess :i* 7 
n all[$ z a d$uction by reason ( ?is    
section 7& n tak5 into acc\nt 9         
connection ) a liquidation to :i*       
p>agraph 7#a7 applies7 may be d$uct$ to 
! ext5t all[able "u section #afe4 ,=    
purposes ( ?is p>agraph1 9 ! case ( any 
d$uction all[$ "u subsection 7b77#a7 )  
respect to bo? />t-up & organizational  
exp5ditures1 ! am\nt treat$ z s all[$ ) 
respect to />t-up exp5ditures %all be> !
 same ratio to su* d$uction z ! />t-up  
exp5ditures tak5 into acc\nt 9 det]m9+  
su* d$uction be>s to ! aggregate ( !    
/>t-up & organizational exp5ditures s   
tak5 into acc\nt4  4  7b7               
,organizational exp5ditures ,section    
#aie7;d7 ( su* ,code1 z r$esignat$ by   
subsection 7a71 is am5d$ by add+ at !   
end ! foll[+ new p>agraphs3  7#c7       
,organizational exp5ditures ,! t]m      
organizational exp5ditures means any    
exp5diture :i*-- 7,a7 is incid5t to !   

creation ( a corporation or a p>tn]%ip1 
7,b7 is *>geable to capital acc\nt1 &   
7,c7 is ( a "* :i*1 if exp5d$ incid5t to
 ! creation ( a corporation or a        
p>tn]%ip hav+ an asc]ta9able life1 w\ld 
be amortizable ov] su* life4  7#d7      
,application to c]ta9 disreg>d$ entities
 ,9 ! case ( any entity ) a s+le own] t 
is disreg>d$ z an entity sep>ate f its  
own]1 ?is section %all be appli$ 9 !    
same mann] z if su* entity 7 a          
corporation4  4  7c7 ,election ,section 
#aie7;e77#b7 ( su* ,code1 z r$esignat$  
by subsection 7a71 is am5d$ to read z   
foll[s3  7#b7 ,p>tn]%ips & ,s           
corporations ,9 ! case ( any p>tn]%ip or
 ,s corporation1 ! election "u          
subsection 7b7 %all be made 7& ?is      
section %all be appli$7 at ! entity     
level4  4  7d7 ,con=m+ am5dm5ts  7#a7   
7,a7 ,"p ,,viii ( sub*apt] ,b ( *apt] #a
 is am5d$ by /rik+ section #bdh ( su*   
,code 7& by /rik+ ! item relat+ to su*  
section 9 ! table ( sections ( su* "p74 
7,b7 ,section #agj7;b77#b77;,d77ii7 (   

su* ,code is am5d$ by /rik+ 7except     
section #bdh74  7,c7 ,section           
#cab7n77#c7 ( su* ,code is am5d$ by     
/rik+ ,sections #agc & #bdh & ins]t+    
,sections #agc & #aie4  7,d7 ,section   
#ece7;b77#c7 ( su* ,code is am5d$ by    
/rik+ 7except section #bdh74  7,e7      
,section #ede7;b77#c7 ( su* ,code is    
am5d$ by /rik+ 7except section #bdh74   
7,f7 ,section #ede7;b77#d7 ( su* ,code  
is am5d$ by /rik+ 7except section #bdh74
  7,g7 ,section #hcd7;c77#g7 ( su* ,code
 is am5d$ by /rik+ 7except section      
#bdh74  7,h7 ,section #heb7;b77#b77;,c7 
( su* ,code is am5d$ by /rik+ 7except   
section #bdh74  7,i7 ,section           
#heg7;b77#b77;,a7 ( su* ,code is am5d$  
by /rik+ 7except section #bdh74  7,j7   
,section #acfc7;b7 ( su* ,code is am5d$ 
by add+ & at ! end ( p>agraph 7#b71 by  
/rik+ p>agraph 7#c71 & by r$esignat+    
p>agraph 7#d7 z p>agraph 7#c74  7,k7    
,section #acge7;b77#a77;,b77i7 ( su*    
,code is am5d$ by /rik+ 7o!r ?an !      
d$uction all[$ by section #bdh1 relat+  

to organization exp5ditures74  7#b7 7,a7
 ,section #gji ( su* ,code is am5d$ to  
read z foll[s3  #gji4 ,treatm5t (       
syndication fees ,no d$uction %all be   
all[$ "u ?is *apt] to a p>tn]%ip or to  
any p>tn] ( ! p>tn]%ip = any am\nts paid
 or incurr$ to promote ! sale ( 7or to  
sell7 an int]e/ 9 ! p>tn]%ip4  4  7,b7  
,! item relat+ to section #gji 9 ! table
 ( sections = "p ,i ( sub*apt] ,k (     
*apt] #a ( su* ,code is am5d$ to read z 
foll[s3  ,sec4 #gji4 ,treatm5t (        
syndication fees4  4  7#c7 ,section     
#abjb7;e77#b77;,a7 ( su* ,code is am5d$ 
by /rik+ section #aie7;c77#a77;,a7 &    
ins]t+ section #aie7;d77#a77;,a74  7#d7 
,! item relat+ to section #aie 9 ! table
 ( cont5ts ( "p ,,vi ( sub*apt] ,b (    
*apt] #a ( su* ,code is am5d$ to read z 
foll[s3  ,sec4 #aie4 ,/>t-up &          
organizational exp5ditures4  4  7e7     
,effective date ,! am5dm5ts made by ?is 
section %all apply to exp5ditures paid  
or incurr$ 9 connection ) active trades 
or bus9esses :i* beg9 9 taxable ye>s    

beg9n+ aft] ,decemb] #ca1 #bjah4  #c4   
,pres]vation ( />t-up net op]at+ losses 
& tax cr$its aft] own]%ip *ange  7a7    
,application to net op]at+ losses       
,section #chb7;d7 ( ! ,int]nal ,rev5ue  
,code ( #aihf is am5d$ by add+ at ! end 
! foll[+ new p>agraph3  7#d7 ,exception 
= />t-up losses  7,a7 ,9 g5]al ,9 ! case
 ( any net op]at+ loss c>ry=w>d describ$
 9 p>agraph 7#a77;,a7 :i* arose 9 a     
/>t-up p]iod taxable ye>1 ! am\nt ( su* 
net op]at+ loss c>ry=w>d o!rwise tak5   
into acc\nt "u su* p>agraph %all be     
r$uc$ by ! net />t-up loss det]m9$ )    
respect to ! trade or bus9ess ref]r$ to 
9 subp>agraph 7,b77i7 = su* />t-up p]iod
 taxable ye>4  7,b7 ,/>t-up p]iod       
taxable ye> ,! t]m />t-up p]iod taxable 
ye> means any taxable ye> ( ! old loss  
corporation :i*-- 7i7 beg9s be=e ! close
 ( ! #c-ye> p]iod beg9n+ on ! date on   
:i* any trade or bus9ess ( su*          
corporation beg9s z an active trade or  
bus9ess 7z det]m9$ "u section           
#aie7;d77#b7 )\t reg>d to subp>agraph   

7,b7 !re(71 &  7ii7 ends aft] ,septemb] 
#aj1 #bjah4  7,c7 ,net />t-up loss  7i7 
,9 g5]al ,! t]m net />t-up loss means1 )
 respect to any trade or bus9ess ref]r$ 
to 9 subp>agraph 7,b77i7 = any />t-up   
p]iod taxable ye>1 ! am\nt :i* be>s !   
same ratio 7b n great] ?an #a7 to ! net 
op]at+ loss c>ry=w>d :i* arose 9 su*    
/>t-up p]iod taxable ye> z--  7,i7 ! net
 op]at+ loss 7if any7 :i* w\ld h be5    
det]m9$ = su* />t-up p]iod taxable ye>  
if only items ( income1 ga91 d$uction1 &
 loss prop]ly allocable to su* trade or 
bus9ess 7 tak5 into acc\nt1 be>s to     
7,,ii7 ! am\nt ( ! net op]at+ loss      
det]m9$ = su* />t-up p]iod taxable ye>4 
7ii7 ,special rule = la/ taxable ye> 9  
/>t-up p]iod ,9 ! case ( any />t-up     
p]iod taxable ye> :i* ends aft] ! close 
( ! #c-ye> p]iod describ$ 9 subp>agraph 
7,b77i7 ) respect to any trade or       
bus9ess1 ! net />t-up loss ) respect to 
su* trade or bus9ess = su* />t-up p]iod 
taxable ye> %all be ! same proportion ( 
su* loss 7det]m9$ )\t reg>d to ?is      

clause7 z ! proportion ( su* />t-up     
p]iod taxable ye> :i* is on or be=e !   
la/ day ( su* p]iod4  7,d7 ,application 
to net op]at+ loss aris+ 9 ye> ( own]%ip
 *ange ,subp>agraph 7,a7 %all apply to  
any net op]at+ loss describ$ 9 p>agraph 
7#a77;,b7 9 ! same mann] z su*          
subp>agraph applies to net op]at+ loss  
c>ry=w>ds describ$ 9 p>agraph 7#a77;,a71
 b by only tak+ into acc\nt ! am\nt (   
su* net op]at+ loss 7& ! am\nt ( ! net  
/>t-up loss7 :i* is allocable "u        
p>agraph 7#a77;,b7 to ! p]iod describ$ 9
 su* p>agraph4 ,prop] adju/m5t 9 !      
allocation ( ! net />t-up loss "u !     
prec$+ s5t5ce %all be made 9 ! case ( a 
taxable ye> to :i* subp>agraph 7,c77ii7 
applies4  7,e7 ,application to taxable  
ye>s :i* are />t-up p]iod taxable ye>s )
 respect to m ?an #a trade or bus9ess ,9
 ! case ( any net op]at+ loss c>ry=w>d  
:i* arose 9 a taxable ye> :i* is a      
/>t-up p]iod taxable ye> ) respect to m 
?an #a trade or bus9ess--  7i7 ?is      
p>agraph %all be appli$ sep>ately )     

respect to ea* su* trade or bus9ess1 &  
7ii7 ! aggregate r$uctions "u           
subp>agraph 7,a7 %all n exce$ su* net   
op]at+ loss c>ry=w>d4  7,f7 ,cont9uity (
 bus9ess requirem5t ,if ! new loss      
corporation does n cont9ue ! trade or   
bus9ess ref]r$ to 9 subp>agraph 7,b77i7 
at all times dur+ ! #b-ye> p]iod beg9n+ 
on ! *ange date1 ?is p>agraph %all n    
apply ) respect to su* trade or bus9ess4
  7,g7 ,c]ta9 title #aa or simil> cases 
7i7 ,multiple own]%ip *anges ,9 ! case (
 a #bnd own]%ip *ange to :i* subsection 
7l77#e77;,d7 applies1 ?is p>agraph %all 
n apply = purposes ( det]m9+ ! pre-*ange
 loss ) respect to su* #bnd own]%ip     
*ange4  7ii7 ,c]ta9 insolv5cy           
transactions ,if subsection 7l77#f7     
applies = purposes ( det]m9+ ! value ( !
 old loss corporation "u subsection 7e71
 ?is p>agraph %all n apply4  7,h7 ,n    
applicable to disall[$ int]e/ ,?is      
p>agraph %all n apply = purposes (      
apply+ ! rules ( p>agraph 7#a7 to !     
c>ryov] ( disall[$ int]e/ "u p>agraph   

7#c74  7,i7 ,transition rule ,?is       
p>agraph %all n apply ) respect to any  
trade or bus9ess if ! date on :i* su*   
trade or bus9ess beg9s z an active trade
 or bus9ess 7z det]m9$ "u section       
#aie7;d77#b7 )\t reg>d to subp>agraph   
7,b7 !re(7 is on or be=e ,septemb] #aj1 
#bjah4  4  7b7 ,application to excess   
cr$its ,section #chc ( su* ,code is     
am5d$ by r$esignat+ subsection 7e7 z    
subsection 7f7 & by ins]t+ aft]         
subsection 7d7 ! foll[+ new subsection3 
7e7 ,exception = />t-up excess cr$its   
7#a7 ,9 g5]al ,9 ! case ( any unus$     
g5]al bus9ess cr$it ( ! corporation "u  
section #ci :i* arose 9 a />t-up p]iod  
taxable ye>1 ! am\nt ( su* unus$ g5]al  
bus9ess cr$it o!rwise tak5 into acc\nt  
"u subsection 7a77#b77;,a7 %all be r$uc$
 by ! />t-up excess cr$it det]m9$ )     
respect to any trade or bus9ess ref]r$  
to 9 section #chb7;d77#d77;,b77i7 = su* 
/>t-up p]iod taxable ye>4  7#b7 ,/>t-up 
p]iod taxable ye> ,= purposes ( ?is     
subsection1 ! t]m />t-up p]iod taxable  

ye> has ! mean+ giv5 su* t]m 9 section  
#chb7;d77#d77;,b74  7#c7 ,/>t-up excess 
cr$it ,= purposes ( ?is subsection1 !   
t]m />t-up excess cr$it means1 ) respect
 to any trade or bus9ess ref]r$ to 9    
section #chb7;d77#d77;,b77i7 = any      
/>t-up p]iod taxable ye>1 ! am\nt :i*   
be>s ! same ratio to ! unus$ g5]al      
bus9ess cr$it :i* arose 9 su* />t-up    
p]iod taxable ye> z--  7,a7 ! am\nt ( ! 
g5]al bus9ess cr$it :i* w\ld h be5      
det]m9$ = su* />t-up p]iod taxable ye>  
if only cr$its prop]ly allocable to su* 
trade or bus9ess 7 tak5 into acc\nt1    
be>s to  7,b7 ! am\nt ( ! g5]al bus9ess 
cr$it det]m9$ = su* />t-up p]iod taxable
 ye>4  7#d7 ,application ( c]ta9 rules  
,rules simil> to ! rules ( subp>agraphs 
7,c77ii71 7,d71 7,e71 & 7,f7 ( section  
#chb7;d77#d7 %all apply = purposes ( ?is
 subsection4  7#e7 ,transition rule ,?is
 subsection %all n apply ) respect to   
any trade or bus9ess if ! date on :i*   
su* trade or bus9ess beg9s z an active  
trade or bus9ess 7z det]m9$ "u section  

#aie7;d77#b7 )\t reg>d to subp>agraph   
7,b7 !re(7 is on or be=e ,septemb] #aj1 
#bjah4  4  7c7 ,effective date ,!       
am5dm5ts made by ?is section %all apply 
to taxable ye>s end+ aft] ,septemb] #aj1
 #bjah4  ,septemb] #bd1 #bjah ,report$ )
 an am5dm5t1 committ$ to ! ,committee ( 
! ,:ole ,h\se on ! ,/ate ( ! ,union1 &  
ord]$ to be pr9t$