,,ii #aai? ,,congress #a/ ,session ,s4 #bjef ,,9 ,,! ,,s5ate ,,( ,,! ,,unit$ ,,/ates ,june #ab1 #bjbe ,mr4 ,cruz introduc$ ! foll[+ bill2 :i* 0 read twice & ref]r$ to ! ,committee on ,f9ance ,a ,,bill ,to am5d ! ,int]nal ,rev5ue ,code ( #aihf to p]man5tly all[ a tax d$uction at ! "t an inve/m5t 9 qualifi$ prop]ty is made1 & = o!r purposes4 #a4 ,%ort title ,?is ,act may be cit$ z ! ,co/ ,recov]y & ,exp5s+ ,accel]ation to ,trans=m ! ,economy & ,jump/>t ,opportunities = ,bus9esses & ,/>tups ,act or ! ,,create ,,jobs ,act4 #b4 ,p]man5t full exp5s+ = qualifi$ prop]ty 7a7 ,9 g5]al ,p>agraph 7#f7 ( section #afh7k7 ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ to read z foll[s3 7#f7 ,applicable p]c5tage ,= purposes ( ?is subsection1 ! t]m applicable p]c5tage means1 9 ! case ( prop]ty plac$ 9 s]vice 7or1 9 ! case ( a specifi$ plant describ$ 9 p>agraph 7#e71 a plant :i* is plant$ or graft$7 aft] ,septemb] #bg1 #bjag1 #ajj p]c5t4 4 7b7 ,con=m+ am5dm5ts 7#a7 ,section #afh7k7 ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$-- 7,a7 9 p>agraph 7#b7-- 7i7 9 subp>agraph 7,a7-- 7,i7 9 clause 7i77,v71 by ins]t+ & at ! end1 7,,ii7 9 clause 7ii71 by /rik+ clause 7ii7 ( subp>agraph 7,e71 & & ins]t+ clause 7i7 ( subp>agraph 7,e741 & 7,,iii7 by /rik+ clause 7iii71 7ii7 9 subp>agraph 7,b7-- 7,i7 9 clause 7i7-- 7aa7 by /rik+ subclauses 7,,ii7 & 7,,iii71 & 7bb7 by r$esignat+ subclauses 7,,iv7 ?r\gh 7,,vi7 z subclauses 7,,ii7 ?r\gh 7,,iv71 respectively1 7,,ii7 by /rik+ clause 7ii71 & 7,,iii7 by r$esignat+ clauses 7iii7 & 7iv7 z clauses 7ii7 & 7iii71 respectively1 7iii7 9 subp>agraph 7,c7-- 7,i7 9 clause 7i71 by /rik+ & subclauses 7,,ii7 & 7,,iii7 ( subp>agraph 7,b77i71 & 7,,ii7 9 clause 7ii71 by /rik+ subp>agraph 7,b77iii7 & ins]t+ subp>agraph 7,b77ii71 & 7iv7 9 subp>agraph 7,e7-- 7,i7 by /rik+ clause 7i71 & 7,,ii7 by r$esignat+ clauses 7ii7 & 7iii7 z clauses 7i7 & 7ii71 respectively1 & 7,b7 9 p>agraph 7#e77;,a71 by /rik+ plant$ be=e ,janu>y #a1 #bjbg1 or is graft$ be=e su* date to a plant t has already be5 plant$1 & ins]t+ plant$ or graft$4 7#b7 ,section #dfj7;c77#f77;,b7 ( su* ,code is am5d$ by /rik+ :i* & all t foll[s ?r\gh ! p]iod & ins]t+ :i* has a recov]y p]iod ( #g ye>s or less44 7c7 ,effective date ,! am5dm5ts made by ?is section %all take effect z if includ$ 9 section #acbja ( ,public ,law #aae-ig4 #c4 ,neutral co/ recov]y depreciation adju/m5t = resid5tial r5tal prop]ty & nonresid5tial real prop]ty 7a7 ,9 g5]al ,section #afh ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by add+ at ! end !re( ! foll[+ new subsection3 7n7 ,neutral co/ recov]y depreciation adju/m5t = resid5tial r5tal prop]ty & nonresid5tial real prop]ty 7#a7 ,9 g5]al ,9 ! case ( any applicable prop]ty1 ! d$uction "u ?is section ) respect to su* prop]ty = any taxable ye> aft] ! taxable ye> dur+ :i* ! prop]ty is plac$ 9 s]vice %all be-- 7,a7 ! am\nt det]m9$ "u ?is section = su* taxable ye> )\t reg>d to ?is subsection1 multipli$ by 7,b7 ! applicable neutral co/ recov]y ratio = su* taxable ye>4 7#b7 ,applicable neutral co/ recov]y ratio ,= purposes ( p>agraph 7#a71 ! applicable neutral co/ recov]y ratio = ! applicable prop]ty = any taxable ye> is ! numb] det]m9$ by-- 7,a7 divid+-- 7i7 ! gross dome/ic product deflator = ! cal5d> qu>t] end+ 9 su* taxable ye> :i* corresponds to ! cal5d> qu>t] dur+ :i* ! prop]ty 0 plac$ 9 s]vice by ! taxpay]1 by 7ii7 ! gross dome/ic product deflator = ! cal5d> qu>t] dur+ :i* ! prop]ty 0 plac$ 9 s]vice by ! taxpay]1 & 7,b7 !n multiply+ ! numb] det]m9$ "u subp>agraph 7,a7 by ! numb] equal to #a4jc to ! n? p[] :]e n is ! numb] ( full ye>s 9 ! p]iod beg9n+ on ! #a/ day ( ! cal5d> qu>t] dur+ :i* ! prop]ty 0 plac$ 9 s]vice by ! taxpay] & end+ on ! day be=e ! beg9n+ ( ! correspond+ cal5d> qu>t] end+ dur+ su* taxable ye>4 ,! applicable neutral co/ recov]y ratio %all nev] be less ?an #a4 ,! applicable neutral co/ recov]y ratio %all be r\nd$ to ! ne>e/ #a_/ajjj4 7#c7 ,special rule = exi/+ prop]ty ,9 ! case ( any applicable prop]ty :i* is plac$ 9 s]vice be=e ! date ( enactm5t ( ?is subsection1 subp>agraphs 7,a77ii7 & 7,b7 ( p>agraph 7#b7 %all be appli$ by sub/itut+ cal5d> qu>t] :i* includes ! date ( enactm5t ( ?is subsection = cal5d> qu>t] dur+ :i* ! prop]ty 0 plac$ 9 s]vice by ! taxpay] ea* place x appe>s4 7#d7 ,gross dome/ic product deflator ,= purposes ( p>agraph 7#b71 ! gross dome/ic product deflator = any cal5d> qu>t] is ! implicit price deflator = ! gross dome/ic product = su* qu>t] 7z %[n 9 ! fir/ revision !re(74 7#e7 ,election n to h subsection apply ,?is subsection %all n apply to any applicable prop]ty if ! taxpay] elects n to h ?is subsection apply to su* prop]ty4 ,su* an election1 once made1 %all be irrevocable4 7#f7 ,additional d$uction n to affect basis or recapture 7,a7 ,9 g5]al ,! additional am\nt det]m9$ "u ?is section by reason ( ?is subsection %all n be tak5 into acc\nt 9 det]m9+ ! adju/$ basis ( any applicable prop]ty or ( any int]e/ 9 a pass-?ru entity :i* holds su* prop]ty & %all n be treat$ z a d$uction = depreciation = purposes ( sections #abde & #abej4 7,b7 ,pass-?ru entity def9$ ,= purposes ( subp>agraph 7,a71 ! t]m pass-?ru entity means-- 7i7 a regulat$ inve/m5t company1 7ii7 a real e/ate inve/m5t tru/1 7iii7 an ,s corporation1 7iv7 a p>tn]%ip1 7v7 an e/ate or tru/1 & 7vi7 a common tru/ fund4 7#g7 ,applicable prop]ty ,= purposes ( ?is subsection1 ! t]m applicable prop]ty means resid5tial r5tal prop]ty or nonresid5tial real prop]ty 7z su* t]ms are def9$ 9 subsection 7e77#b774 4 7b7 ,m9imum tax treatm5t ,p>agraph 7#a7 ( section #ef7;a7 ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by add+ at ! end !re( ! foll[+ new subp>agraph3 7,e7 ,use ( neutral co/ recov]y ratio ,9 ! case ( prop]ty to :i* section #afh7n7 applies1 ! d$uction all[able "u ?is p>agraph ) respect to su* prop]ty = any taxable ye> 7aft] ! taxable ye> dur+ :i* ! prop]ty is plac$ 9 s]vice7 %all be-- 7i7 ! am\nt s all[able = su* taxable ye> )\t reg>d to ?is subp>agraph1 multipli$ by 7ii7 ! applicable neutral co/ recov]y ratio = su* taxable ye> 7z det]m9$ "u section #afh7n774 ,?is subp>agraph %all n apply to any prop]ty ) respect to :i* !re is an election 9 effect n to h section #afh7n7 apply4 4 7c7 ,effective date ,! am5dm5ts made by ?is section %all apply to prop]ty plac$ 9 s]vice be=e1 on1 or aft] ! date ( ! enactm5t ( ?is ,act1 ) respect to taxable ye>s end+ on or aft] su* date4 #d4 ,elim9ation ( amortization ( rese>* & exp]im5tal exp5ditures 7a7 ,9 g5]al ,section #agd ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ to read z foll[s3 #agd4 ,rese>* & exp]im5tal exp5ditures 7a7 ,treatm5t z ,exp5ses 7#a7 ,9 g5]al ,a taxpay] may treat rese>* or exp]im5tal exp5ditures :i* are paid or incurr$ by him dur+ ! taxable ye> 9 connection ) 8 trade or bus9ess z exp5ses :i* are n *>geable to capital acc\nt4 ,! exp5ditures s treat$ %all be all[$ z a d$uction4 7#b7 ,:5 me?od may be adopt$ 7,a7 ,)\t cons5t ,a taxpay] may1 )\t ! cons5t ( ! ,secret>y1 adopt ! me?od provid$ 9 ?is subsection = 8 fir/ taxable ye> = :i* exp5ditures describ$ 9 p>agraph 7#a7 are paid or incurr$4 7,b7 ,) cons5t ,a taxpay] may1 ) ! cons5t ( ! ,secret>y1 adopt at any "t ! me?od provid$ 9 ?is subsection4 7#c7 ,scope ,! me?od adopt$ "u ?is subsection %all apply to all exp5ditures describ$ 9 p>agraph 7#a74 ,! me?od adopt$ %all be adh]$ to 9 comput+ taxable income = ! taxable ye> & = all subsequ5t taxable ye>s unless1 ) ! approval ( ! ,secret>y1 a *ange to a diff]5t me?od is au?oriz$ ) respect to "p or all ( su* exp5ditures4 7b7 ,amortization ( ,c]ta9 ,rese>* & ,exp]im5tal ,exp5ditures 7#a7 ,9 g5]al ,at ! election ( ! taxpay]1 made 9 accordance ) regulations prescrib$ by ! ,secret>y1 rese>* or exp]im5tal exp5ditures :i* are-- 7,a7 paid or incurr$ by ! taxpay] 9 connection ) 8 trade or bus9ess1 7,b7 n treat$ z exp5ses "u subsection 7a71 & 7,c7 *>geable to capital acc\nt b n *>geable to prop]ty ( a "* :i* is subject to ! all[ance "u section #afg 7relat+ to all[ance = depreciation1 etc47 or section #faa 7relat+ to all[ance = depletion71 may be treat$ z def]r$ exp5ses4 ,9 comput+ taxable income1 su* def]r$ exp5ses %all be all[$ z a d$uction ratably ov] su* p]iod ( n less ?an #fj mon?s z may be select$ by ! taxpay] 7beg9n+ ) ! mon? 9 :i* ! taxpay] fir/ realizes b5efits f su* exp5ditures74 ,su* def]r$ exp5ses are exp5ditures prop]ly *>geable to capital acc\nt = purposes ( section #ajaf7;a77#a7 7relat+ to adju/m5ts to basis ( prop]ty74 7#b7 ,"t = & scope ( election ,! election provid$ by p>agraph 7#a7 may be made = any taxable ye>1 b only if made n lat] ?an ! "t prescrib$ by law = fil+ ! return = su* taxable ye> 7includ+ ext5sions !re(74 ,! me?od s elect$1 & ! p]iod select$ by ! taxpay]1 %all be adh]$ to 9 comput+ taxable income = ! taxable ye> = :i* ! election is made & = all subsequ5t taxable ye>s unless1 ) ! approval ( ! ,secret>y1 a *ange to a diff]5t me?od 7or to a diff]5t p]iod7 is au?oriz$ ) respect to "p or all ( su* exp5ditures4 ,! election %all n apply to any exp5diture paid or incurr$ dur+ any taxable ye> be=e ! taxable ye> = :i* ! taxpay] makes ! election4 7c7 ,l& & o!r prop]ty ,?is section %all n apply to any exp5diture = ! acquisition or improvem5t ( l&1 or = ! acquisition or improvem5t ( prop]ty to be us$ 9 connection ) ! rese>* or exp]im5tation & ( a "* :i* is subject to ! all[ance "u section #afg 7relat+ to all[ance = depreciation1 etc47 or section #faa 7relat+ to all[ance = depletion72 b = purposes ( ?is section all[ances "u section #afg1 & all[ances "u section #faa1 %all be consid]$ z exp5ditures4 7d7 ,exploration exp5ditures ,?is section %all n apply to any exp5diture paid or incurr$ = ! purpose ( asc]ta9+ ! exi/5ce1 location1 ext5t1 or quality ( any deposit ( ore or o!r m9]al 7includ+ oil & gas74 7e7 ,only ,reasonable ,rese>* ,exp5ditures ,eligible ,?is section %all apply to a rese>* or exp]im5tal exp5diture only to ! ext5t t ! am\nt !re( is reasonable "u ! circum/ances4 7f7 ,cross ,ref]5ces 7#a7 ,= adju/m5ts to basis ( prop]ty = am\nts all[$ z d$uctions z def]r$ exp5ses "u subsection 7b71 see section #ajaf7;a77#ad74 7#b7 ,= election ( #aj-ye> amortization ( exp5ditures all[able z a d$uction "u subsection 7a71 see section #ei7;e74 4 7b7 ,cl]ical ,am5dm5t ,! table ( sections = "p ,,vi ( sub*apt] ,b ( *apt] #a ( su* ,code is am5d$ by /rik+ ! item relat+ to section #agd & ins]t+ ! foll[+ new item3 ,sec4 #agd4 ,rese>* & exp]im5tal exp5ditures 4 7c7 ,con=m+ ,am5dm5ts 7#a7 ,section #da7;d77#a77;,a7 ( su* ,code is am5d$ by /rik+ specifi$ rese>* or exp]im5tal exp5ditures "u section #agd & ins]t+ exp5ses "u section #agd4 7#b7 ,section #bhj;,c7c7 ( su* ,code is am5d$ to read z foll[s3 7c7 ,cr$it = ,increas+ ,rese>* ,activities 7#a7 ,9 g5]al ,no d$uction %all be all[$ = t portion ( ! qualifi$ rese>* exp5ses 7z def9$ 9 section #da7;b77 or basic rese>* exp5ses 7z def9$ 9 section #da7;e77#b77 o!rwise all[able z a d$uction = ! taxable ye> :i* is equal to ! am\nt ( ! cr$it det]m9$ = su* taxable ye> "u section #da7;a74 7#b7 ,simil> rule :]e taxpay] capitalizes r ?an d$ucts exp5ses ,if-- 7,a7 ! am\nt ( ! cr$it det]m9$ = ! taxable ye> "u section #da7;a77#a71 exce$s 7,b7 ! am\nt all[able z a d$uction = su* taxable ye> = qualifi$ rese>* exp5ses or basic rese>* exp5ses 7det]m9$ )\t reg>d to p>agraph 7#a771 ! am\nt *>geable to capital acc\nt = ! taxable ye> = su* exp5ses %all be r$uc$ by ! am\nt ( su* excess4 7#c7 ,election ( r$uc$ cr$it 7,a7 ,9 g5]al ,9 ! case ( any taxable ye> = :i* an election is made "u ?is p>agraph-- 7i7 p>agraphs 7#a7 & 7#b7 %all n apply1 & 7ii7 ! am\nt ( ! cr$it "u section #da7;a7 %all be ! am\nt det]m9$ "u subp>agraph 7,b74 7,b7 ,am\nt ( r$uc$ cr$it ,! am\nt ( cr$it det]m9$ "u ?is subp>agraph = any taxable ye> %all be ! am\nt equal to ! excess (-- 7i7 ! am\nt ( cr$it det]m9$ "u section #da7;a7 )\t reg>d to ?is p>agraph1 ov] 7ii7 ! product (-- 7,i7 ! am\nt describ$ 9 clause 7i71 & 7,,ii7 ! rate ( tax "u section #aa7;b74 7,c7 ,election ,an election "u ?is p>agraph = any taxable ye> %all be made n lat] ?an ! "t = fil+ ! return ( tax = su* ye> 7includ+ ext5sions71 %all be made on su* return1 & %all be made 9 su* mann] z ! ,secret>y may prescribe4 ,su* an election1 once made1 %all be irrevocable4 7#d7 ,controll$ gr\ps ,p>agraph 7#c7 ( subsection 7b7 %all apply = purposes ( ?is subsection4 4 7d7 ,effective date ,! am5dm5ts made by ?is section %all apply to am\nts paid or incurr$ 9 taxable ye>s beg9n+ aft] ,decemb] #ca1 #bjba4