115 S1144 IS: Investment in New Ventures and Economic Success Today Act of 2017
U.S. Senate
2017-05-17
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.Short title; amendment of 1986 Code; table of contents
(a)
This Act may be cited as the Investment in New Ventures and Economic Success Today Act of 2017
or the INVEST Act of 2017
.
(b)Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986.
(c)Sec. 1. Short title; amendment of 1986 Code; table of contents.
TITLE I—Start-up and organizational business expenses
Sec. 101. Unification and expansion of deduction for start-up and organizational expenditures.
TITLE II—Accounting methods
Sec. 201. Modifications of gross receipts test for use of cash method of accounting by corporations
and partnerships.
Sec. 202. Clarification of inventory accounting rules for small businesses.
Sec. 203. Modification of rules for capitalization and inclusion in inventory costs of certain
expenses.
Sec. 204. Increase in gross receipts test for construction contract exception to percentage of
completion method.
TITLE III—Modifications of expensing and cost recovery rules
Subtitle A—Expensing rules
Sec. 301. Modifications of rules for expensing depreciable business assets.
Subtitle B—Cost recovery rules
Sec. 311. 50-percent expensing made permanent.
Sec. 312. Modifications of treatment of certain farm property.
Sec. 313. Secretarial requirement to reexamine economic depreciation for classes of depreciable
property.
Sec. 314. Modifications to depreciation limitations on luxury automobiles and personal use
property.
Sec. 315. Reduction in amortization period for intangibles.
<enum>I</enum><header>Start-up and organizational business expenses</header>
<section id="HF979485293D54248B2BEE840CA87467F"><enum>101.</enum><header>Unification and expansion of
deduction for start-up and organizational expenditures</header>
<subsection id="HE3216195137C489CB63CFD6DCC3897FA"><enum>(a)</enum><header>Unification</header>
<paragraph id="idB10C746CE89144388DC83A4881F0365D"><enum>(1)</enum><header>In general</header><text>Subsection (a) of <external-xref legal-doc="usc" parsable-cite="usc/26/195">section 195</external-xref> is amended by inserting <quote>and organizational</quote> after <quote>start-up</quote>.</text>
</paragraph><paragraph id="HE84EBDDFD2634655800504DCBCCA175D"><enum>(2)</enum><header>Organizational
expenditures</header><text>Subsection (c) of <external-xref legal-doc="usc" parsable-cite="usc/26/195">section 195</external-xref> is amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H07B6426D87E14A349D51B2EA3665F7A4" style="OLC">
<paragraph id="HA33EA9BD108A4484B773390B150E36AB"><enum>(3)</enum><header>Organizational
expenditures</header><text display-inline="yes-display-inline">The term <quote>organizational expenditures</quote> means any expenditure which—</text>
<subparagraph id="H8F8EA954D5E047BD93B9D889D40B5C4E"><enum>(A)</enum><text>is incident to the creation of a corporation or a partnership,</text>
</subparagraph><subparagraph id="HA675E2A8B7034EAA8E7261E9EA200530"><enum>(B)</enum><text>is chargeable to capital account, and</text>
</subparagraph><subparagraph id="HD6A462334E5B4A048EE0EA69533C587C"><enum>(C)</enum><text>is of a character which, if expended incident to the creation of a corporation or a partnership having an ascertainable life, would be amortizable over such life.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="id30192F3E392C4EC4AA6F456835D833A0"><enum>(3)</enum><header>Conforming amendment</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/195">Section 195(b)(1)</external-xref> is amended by inserting <quote>or organizational</quote> after <quote>start-up</quote> each place it appears.</text>
</paragraph></subsection><subsection id="H08F6477F229647ADB5D87DF5EB8F976C"><enum>(b)</enum><header>Dollar
amounts and amortization period</header>
<paragraph id="id08E0FE02EE70428F8654D1C00D5333CF"><enum>(1)</enum><header>Dollar amounts</header>
<subparagraph id="idF726D67175584CC7979AAFD783BFFA18"><enum>(A)</enum><header>Increase</header><text display-inline="yes-display-inline">Clause (ii) of <external-xref legal-doc="usc" parsable-cite="usc/26/195">section 195(b)(1)(A)</external-xref> is amended—</text>
<clause id="HB0685400717D446982FAB28C664370D3"><enum>(i)</enum><text>by striking <quote>$5,000</quote> and inserting <quote>$50,000</quote>, and</text>
</clause><clause id="H366E54E756674990B7383176E21B6D20"><enum>(ii)</enum><text>by striking <quote>$50,000</quote> and inserting <quote>$100,000</quote>.</text>
</clause></subparagraph><subparagraph id="id77B25546748140EB859F68817C6A3CE0"><enum>(B)</enum><header>Adjustment for inflation</header><text>Paragraph (3) of <external-xref legal-doc="usc" parsable-cite="usc/26/195">section 195(b)</external-xref> is amended to read as follows:</text> <quoted-block act-name="" display-inline="no-display-inline" id="idB4A9BDB9D0A34827B53CB5EBAB6629AF" style="OLC"> <paragraph id="id83FE5D7330674DD8A366C8DF627D38FE"><enum>(3)</enum><header>Adjustment for inflation</header><text>In the case of any taxable year beginning after December 31, 2018, the $50,000 and $100,000 amounts in paragraph (1)(A)(ii) shall each be increased by an amount equal to—</text>
<subparagraph id="id0E72866553864A85A904575C938A89E9"><enum>(A)</enum><text>such dollar amount, multiplied by</text> </subparagraph><subparagraph id="idF7061BA656824B0D84985DB24DC42E44"><enum>(B)</enum><text>the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, by substituting <quote>calendar year 2017</quote> for <quote>calendar year 1992</quote> in subparagraph (B) thereof.</text>
</subparagraph><continuation-text commented="no" continuation-text-level="paragraph">If any amount as increased under the preceding sentence is not a multiple of $1,000, such amount
shall be rounded to the nearest multiple of $1,000.</continuation-text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="id2441A2CB74004CD8A208DBC7E2CCE1E2"><enum>(2)</enum><header>Amortization period</header><text>Subparagraph (B) of <external-xref legal-doc="usc" parsable-cite="usc/26/195">section 195(b)(1)</external-xref> is amended by striking <quote>180-month period</quote> and inserting <quote>120-month period</quote>.</text> </paragraph><paragraph id="id23E34B1A6A75404299FBE36BEA7531BC"><enum>(3)</enum><header>Allocation of limit to initial start-up and organizational expenditures</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/195">Section 195(b)</external-xref> is amended—</text>
<subparagraph id="id1EBB176817B5402DAB746B2C5A9A67EF"><enum>(A)</enum><text>by striking <quote>If</quote> in paragraph (1) and inserting <quote>Subject to paragraph (4), if</quote>, and</text> </subparagraph><subparagraph id="id1EE9973AD95645FB85DD8BA56EBB06D8"><enum>(B)</enum><text>by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id4109D07C19D44B88A3A300267FA6D87C" style="OLC">
<paragraph id="id058A325789724B69B6647B734A5281DC"><enum>(4)</enum><header>Special rules for aggregation of initial expenditures of corporations and partnerships</header><text>For purposes of paragraph (1), if, at the time a corporation or partnership first begins the active conduct of one or more trades or businesses, a taxpayer has both start-up expenditures with respect to such trades or businesses and organizational expenditures with respect to such entity—</text>
<subparagraph id="idA8AB654CFB264CE289BF751A0C3D71D5"><enum>(A)</enum><text>any election under paragraph (1) shall cover both such start-up and organizational expenditures,</text>
</subparagraph><subparagraph id="idA720BBEF3D3143ED8777A027671A1E02"><enum>(B)</enum><text>the amount of the deduction under paragraph (1)(A) with respect to all such start-up and organizational expenditures shall not exceed the limitation under clause (ii) of paragraph (1)(A), and</text>
</subparagraph><subparagraph id="id18C2B20006234533A4388D8F6106FB30"><enum>(C)</enum><text>the amount of such start-up and organizational expenditures remaining after such deduction shall be amortized under paragraph (1)(B).</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph></subsection><subsection id="H05F01A0F37DD41828B3E62C50D35177E"><enum>(c)</enum><header>Conforming
amendments</header>
<paragraph id="HFBE91B9A90424FFAAD1FDDE77FE15D29"><enum>(1)</enum><subparagraph commented="no" display-inline="yes-display-inline" id="HA417BF166F7D4B6ABCECD7046DF3E57C"><enum>(A)</enum><text>Part VIII of subchapter B of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> is amended by striking section 248.</text>
</subparagraph><subparagraph id="idF305A9805F0C4339B69F4DFBAB76D974" indent="up1"><enum>(B)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/56">Section 56(g)(4)(D)(ii)</external-xref> is amended by striking <quote>Sections 173 and 248</quote> and inserting <quote>Section 173</quote>.</text>
</subparagraph><subparagraph id="H74C2DDA2EC424E48B8054E7DBEE62731" indent="up1"><enum>(C)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/170">Section 170(b)(2)(D)(ii)</external-xref> is amended by striking <quote>(except section 248)</quote>.</text>
</subparagraph><subparagraph id="H01274174711B4879A9AA6794ADDB1F10" indent="up1"><enum>(D)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/312">Section 312(n)(3)</external-xref> is amended by striking <quote>Sections 173 and 248</quote> and inserting <quote>Sections 173 and 195</quote>.</text>
</subparagraph><subparagraph id="HC13BB5F32DA644E9BF360D80D11CDE10" indent="up1"><enum>(E)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/535">Section 535(b)(3)</external-xref> is amended by striking <quote>(except section 248)</quote>.</text>
</subparagraph><subparagraph id="HBA2062B2E7304F86B1C109567F2EF6EB" indent="up1"><enum>(F)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/545">Section 545(b)(3)</external-xref> is amended by striking <quote>(except section 248)</quote>.</text>
</subparagraph><subparagraph id="H7C76E4714F834C1691C7DEE27D119F05" indent="up1"><enum>(G)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/834">Section 834(c)(7)</external-xref> is amended by striking <quote>(except section 248)</quote>.</text>
</subparagraph><subparagraph id="H1DA35CF674864DA29E6F7A41A9521E5C" indent="up1"><enum>(H)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/852">Section 852(b)(2)(C)</external-xref> is amended by striking <quote>(except section 248)</quote>.</text>
</subparagraph><subparagraph id="H366402F8C5574D2EA1A52906498BF939" indent="up1"><enum>(I)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/857">Section 857(b)(2)(A)</external-xref> is amended by striking <quote>(except section 248)</quote>.</text>
</subparagraph><subparagraph id="H697B8D9128D24F6F89EED7234E5B31DA" indent="up1"><enum>(J)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/1363">Section 1363(b)(3)</external-xref> is amended by striking <quote>section 248</quote> and inserting <quote>section 195</quote>.</text>
</subparagraph><subparagraph id="H260A489802794106B4D61EABA9C4E024" indent="up1"><enum>(K)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/1375">Section 1375(b)(1)(B)(i)</external-xref> is amended by striking <quote>(other than the deduction allowed by section 248, relating to organization expenditures)</quote>.</text>
</subparagraph><subparagraph id="idD858BD0A35F94CE89806674AD15DAF66" indent="up1"><enum>(L)</enum><text>The table of sections for part VIII of subchapter B of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> is amended by striking the item relating to section 248.</text>
</subparagraph></paragraph><paragraph id="H101D5D07770747B4964ADB05161FE710"><enum>(2)</enum><subparagraph commented="no" display-inline="yes-display-inline" id="idEFC8CD7F4F0445998CAF5E4609BB7F72"><enum>(A)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/709">Section 709</external-xref> is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="id3B289481D9294C1A9572FFBD1FB89ADE" style="OLC">
<section id="idD0A448DB68524B87AD4CB42B435CA713"><enum>709.</enum><header>Treatment of syndication fees</header><text display-inline="no-display-inline">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.</text></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="id1EFB15B55A5843DEAA34882CD7F75D0A" indent="up1"><enum>(B)</enum><text>The item relating to section 709 in the table of sections for part I of subchapter K of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> is amended by striking <quote><header-in-text level="section" style="OLC">organization and</header-in-text></quote>.</text>
</subparagraph></paragraph></subsection><subsection id="id7D7930CCE8564578917B9514F64FE8D4"><enum>(d)</enum><header>Clerical amendments</header>
<paragraph id="id669A19EF862B422D8BADA676227085C4"><enum>(1)</enum><text>The heading of <external-xref legal-doc="usc" parsable-cite="usc/26/195">section 195</external-xref> is amended by striking <quote><header-in-text level="section" style="OLC">expenditures</header-in-text></quote> and inserting <quote><header-in-text level="section" style="OLC">and organizational expenditures</header-in-text></quote>.</text> </paragraph><paragraph id="id1DA9C4681A134E42AC9E2E7978D29112"><enum>(2)</enum><text>The item relating to section 195 in the table of contents of part VI of subchapter B of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="id96C2946B88BE46BE8AA1416783BE3B2F" style="OLC"><toc><toc-entry bold="off" level="section">Sec. 195. Start-up and organizational expenditures.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="HB8205ADA740548F4BBD4F666AD5B9BF3"><enum>(e)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to elections which first take effect for taxable years beginning after December 31, 2017.</text>
</subsection></section><enum>II</enum><header>Accounting methods</header>
<section commented="no" display-inline="no-display-inline" id="IDD149772B62CB444B827B93F2975146AA"><enum>201.</enum><header>Modifications of
gross receipts test for use of cash method of accounting by corporations
and partnerships</header>
<subsection commented="no" display-inline="no-display-inline" id="idE76C5541809F46369615C6B92699B65D"><enum>(a)</enum><header>Modifications of gross receipts test</header>
<paragraph commented="no" display-inline="no-display-inline" id="id232257AEBC4F4F0E8DD0D6AB3DD28653"><enum>(1)</enum><header>In
general</header><text>So much of section 448(c) as precedes paragraph (2) is amended to read as follows:</text> <quoted-block display-inline="no-display-inline" id="id8D341445A7624C49A86D4F5BB97E8E8B" style="OLC"> <subsection commented="no" display-inline="no-display-inline" id="idF78375CC4A4448E486228D6CF7CDA5BA"><enum>(c)</enum><header>Gross receipts test</header> <paragraph commented="no" display-inline="no-display-inline" id="id74844E26E1964C08A517C762DB7E8988"><enum>(1)</enum><header>In general</header><text>A corporation or partnership meets the gross receipts test of this subsection for any taxable year if the average annual gross receipts of such entity for the 3-taxable-year period ending with the taxable year which precedes such taxable year does not exceed the applicable dollar limit.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="idC2C937FB4DCA4AA0823A2596B446C3AC"><enum>(2)</enum><header>Applicable dollar limit</header><text>Subsection (c) of <external-xref legal-doc="usc" parsable-cite="usc/26/448">section 448</external-xref> is amended by adding at the end the following new paragraph:</text>
<quoted-block act-name="" id="id2116C9A21CEB40F9B5EFA3C384A24B33" style="OLC">
<paragraph id="idA05B1A2C1004421C947FACAF6C3BF278"><enum>(4)</enum><header>Applicable dollar limit</header>
<subparagraph id="idAB3AD85886D84D0DA1DDDAEC2384CB6D"><enum>(A)</enum><header>In general</header><text>The applicable dollar limit is $15,000,000.</text> </subparagraph><subparagraph id="id5C5A728F3C124D3CB245EA45C5A4564C"><enum>(B)</enum><header>Adjustment for inflation</header><text>In the case of any taxable year beginning after December 31, 2018, the $15,000,000 amount under subparagraph (A) shall be increased by an amount equal to—</text>
<clause id="idB408083517E0423389E95D1DD03C0ACC"><enum>(i)</enum><text>such dollar amount, multiplied by</text> </clause><clause id="idB7D141A345634BB09DC1362B65C21F99"><enum>(ii)</enum><text>the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, by substituting <quote>calendar year 2017</quote> for <quote>calendar year 1992</quote> in subparagraph (B) thereof.</text>
</clause><continuation-text continuation-text-level="subparagraph">If any amount as increased under the preceding sentence is not a multiple of $1,000, such amount
shall be rounded to the nearest multiple of $1,000.</continuation-text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="id4565BFE740EF4B8086071A1FC7B01EDD"><enum>(3)</enum><header>Change in method of accounting</header><text>Paragraph (7) of <external-xref legal-doc="usc" parsable-cite="usc/26/448">section 448(d)</external-xref> is amended—</text> <subparagraph id="id1754105F30A74BC9A4BDE5936B6BDC13"><enum>(A)</enum><text>by striking <quote>In the case of</quote> and all that follows up to subparagraph (A) and inserting: <quote>If a taxpayer changes its method of accounting because the taxpayer is prohibited from using the cash receipts and disbursement method of accounting by reason of subsection (a) or is no longer prohibited from using such method by reason of such subsection—</quote>, and</text>
</subparagraph><subparagraph id="id2E576DC76D9541E296115D6F198A1284"><enum>(B)</enum><text>by inserting <quote>and</quote> at the end of subparagraph (A), by striking <quote>, and</quote>at the end of subparagraph (B) and inserting a period, and by striking subparagraph (C).</text> </subparagraph></paragraph><paragraph id="id5BA4D7C759624ADC8B36E6E7B80A055A"><enum>(4)</enum><header>Conforming amendments</header> <subparagraph id="idBD4998FBEA18469B850061B3D8052F5D"><enum>(A)</enum><text>Paragraph (3) of <external-xref legal-doc="usc" parsable-cite="usc/26/448">section 448(b)</external-xref> is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="id6676D61B18F9451E9768CB336B042474" style="OLC">
<paragraph id="id0CF3E11E5FBC471DAD5C10C0A8D81AB7"><enum>(3)</enum><header>Entities satisfying gross receipts test</header><text>Paragraphs (1) and (2) of subsection (a) shall not apply to any corporation or partnership for any taxable year if such entity meets the gross receipts test of subsection (c) for the taxable year.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id3230AA48DFEB4D319C5F7A9D23FB5EAD"><enum>(B)</enum><text display-inline="yes-display-inline">Clause (iii) of <external-xref legal-doc="usc" parsable-cite="usc/26/172">section 172(b)(1)(E)</external-xref> is amended by inserting <quote>, applied by substituting <quote>$5,000,000</quote> for <quote>the applicable dollar limit</quote> in paragraph (1) thereof,</quote> after <quote>section 448(c)</quote>.</text>
</subparagraph></paragraph></subsection><subsection id="id3EF848460F86488D967268C7802EA7B3"><enum>(b)</enum><header>Application of modifications to farming corporations</header>
<paragraph id="id8ADC0FD75185494286BE60A573A1C6BB"><enum>(1)</enum><header>In general</header><text>Paragraph (1) of <external-xref legal-doc="usc" parsable-cite="usc/26/447">section 447(d)</external-xref> is amended to read as follows:</text> <quoted-block display-inline="no-display-inline" id="id57184E761C684EF5AAA72556E8B3A0AB" style="OLC"> <paragraph id="id6434E68A431042FD9680F0BF322FA82D"><enum>(1)</enum><header>In general</header><text>A corporation meets the requirements of this subsection for any taxable year with respect to its gross receipts if the corporation meets the gross receipts test of section 448(c) for the taxable year.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="idAF0AC99E53DC4121BD4A4294CC7BCF81"><enum>(2)</enum><header>Family corporations</header><text>Paragraph (2) of <external-xref legal-doc="usc" parsable-cite="usc/26/447">section 447(d)</external-xref> is amended—</text> <subparagraph id="idA3F8AAB0F50A4FD9B59F70E33FE77C19"><enum>(A)</enum><text>by striking subparagraph (A) and inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="id29F6230B593A46B3976C70F21E20658E" style="OLC">
<subparagraph id="id6E75126382204A29B7797AEE98000963"><enum>(A)</enum><header>In general</header><text>In the case of a family corporation, in applying section 448(c) for purposes of paragraph (1)—</text> <clause id="id9AADA880A5394E78BE04487AECEA1984"><enum>(i)</enum><text>paragraph (1) of section 448(c) shall be applied by substituting the applicable family corporation limit for the applicable dollar limit, and</text>
</clause><clause id="id63833A19177A4C96BCC6B82A9E3FEFD6"><enum>(ii)</enum><text>the rules of subparagraph (B) shall apply in computing gross receipts.</text></clause></subparagraph><after-quoted-block>,</after-quoted-block></quoted-block> </subparagraph><subparagraph id="idB60FA67EDA424FAA8B8CBDC840307D3C"><enum>(B)</enum><text>Clause (i) of <external-xref legal-doc="usc" parsable-cite="usc/26/447">section 447(d)(2)(B)</external-xref> is amended by striking <quote>the last sentence of paragraph (1)</quote> and inserting <quote>paragraph (2) of section 448(c)</quote>, and</text>
</subparagraph><subparagraph id="id2D0A90180A57471FA3F8CDC4F2F1307C"><enum>(C)</enum><text>by adding at the end the following new subparagraph:</text> <quoted-block display-inline="no-display-inline" id="idCC8518D0BE7B46A480703FFB09F1FF65" style="OLC"> <subparagraph id="id979EF67824824BBE94A0DA5A2585CE65"><enum>(D)</enum><header>Applicable family corporation limit</header> <clause id="id121E9862C6E74501A8836225E53A2378"><enum>(i)</enum><header>In general</header><text>The applicable family corporation limit is $25,000,000.</text>
</clause><clause id="id60F91DABED49462C9138E57445FB2AE9"><enum>(ii)</enum><header>Adjustment for inflation</header><text>In the case of any taxable year beginning after December 31, 2018, the $25,000,000 amount under clause (i) shall be increased by an amount equal to—</text>
<subclause id="id4136C4F5EB9240BB9A1585E4980283D0"><enum>(I)</enum><text>such dollar amount, multiplied by</text> </subclause><subclause id="id884F40BEBC5C4137AB8617E40683CD35"><enum>(II)</enum><text>the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, by substituting <quote>calendar year 2017</quote> for <quote>calendar year 1992</quote> in subparagraph (B) thereof.</text>
</subclause><continuation-text continuation-text-level="clause">If any amount as increased under the preceding sentence is not a multiple of $1,000, such amount
shall be rounded to the nearest multiple of $1,000.</continuation-text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="id6FCE1741BD08460281404D5464300E8C"><enum>(3)</enum><header>Change in method of accounting</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/447">Section 447(f)</external-xref> is amended—</text> <subparagraph id="idB75583C0F1834F2C83A87369762BE422"><enum>(A)</enum><text>by striking <quote>In the case of</quote> and all that follows up to paragraph (1) and inserting: <quote>If a taxpayer changes its method of accounting because the taxpayer is required to use an accrual method of accounting by reason of subsection (a) or is no longer required to use such method by reason of such subsection—</quote>, and</text>
</subparagraph><subparagraph id="id7E4CFAD3BC6F47A683CF52534BD89B0C"><enum>(B)</enum><text>by striking paragraph (2) and inserting:</text> <quoted-block display-inline="no-display-inline" id="id30C45855C063430E90D035A1738D689A" style="OLC"> <paragraph id="idB3F83EE77FF64B87966D053215621F0E"><enum>(2)</enum><text>such change shall be treated as initiated by the taxpayer, and</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id67F78340861042DE8AA92D1138EC2251"><enum>(c)</enum><header>Effective date</header><text display-inline="yes-display-inline">The amendments made by this section shall apply to taxable years beginning after December 31, 2017.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID1271D020860346BCA3D821CF3A429591"><enum>202.</enum><header>Clarification of
inventory accounting rules for small businesses</header>
<subsection commented="no" display-inline="no-display-inline" id="IDCFCFD946278844B18227FFE5229DA2F4"><enum>(a)</enum><header>Clarification of inventory rules</header>
<paragraph commented="no" display-inline="no-display-inline" id="id4164CEE757034AA29838F4C1754B20FE"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/471">Section 471</external-xref> is amended by redesignating subsection (c) as subsection (d) and by inserting after subsection (b) the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="id4F50BAE70AB148C599674063FB44DF9F" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="IDBA42EAEF4F004B1483F051420B177DDA"><enum>(c)</enum><header>Small business
taxpayers not required To use inventories</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID556E3066E68B4B28BFA62514967F96B7"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">A qualified taxpayer shall not be required to use inventories under this section for a taxable year.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDF95C054A984F418C893AA9A0334DDE0D"><enum>(2)</enum><header>Treatment of
taxpayers not using inventories</header><text display-inline="yes-display-inline">A qualified taxpayer who is not required under this subsection to use inventories with respect to any property for a taxable year beginning after December 31, 2017, may treat such property as an incidental material or supply for such taxable year.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID8FCA3BCEC166457F8C451C39F24083AA"><enum>(3)</enum><header>Qualified
taxpayer</header><text display-inline="yes-display-inline">For purposes of this subsection, the term <term>qualified taxpayer</term> means, with respect to any taxable year, a taxpayer who meets the gross receipts test of section 448(c) for the taxable year. Such term shall not include a tax shelter prohibited from using the cash receipts and disbursements method of accounting under section 448(a)(3).</text>
</paragraph><paragraph id="id0EC621BD3DB843D4B014BB925162CF59"><enum>(4)</enum><header>Coordination with section 481</header><text>If a taxpayer changes its method of accounting because the taxpayer is not required to use inventories by reason of paragraph (1) or is required to use inventories because such paragraph no longer applies to the taxpayer—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="id7107A5CA71D34A7680B1E938EE70960E"><enum>(A)</enum><text display-inline="yes-display-inline">such change shall be treated as initiated by the taxpayer, and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idE9A747654EE4459CA5C470B12B221E5F"><enum>(B)</enum><text display-inline="yes-display-inline">such change shall be treated as made with the consent of the Secretary.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id326608CB2463426AB4C4AB0D77259F0D"><enum>(2)</enum><header>Conforming amendment</header><text>Subsection (c) of <external-xref legal-doc="usc" parsable-cite="usc/26/263A">section 263A</external-xref> is amended by adding at the end the following new paragraph:</text>
<quoted-block act-name="" id="idC1413EDDBA514DD692D1B798D29B97DF" style="OLC">
<paragraph id="id000188E25E9D4900A2809CADD3BD97EE"><enum>(8)</enum><header>Exclusion from inventory rules</header><text>Nothing in this section shall require the use of inventories for any taxable year by a qualified taxpayer (within the meaning of section 471(c)(3)) who is not required to use inventories under section 471 for such taxable year.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDAFA0F6D4E92B46F5A2C61EA079F16A00"><enum>(b)</enum><header>Effective date</header><text display-inline="yes-display-inline">The amendments made by this section shall apply to taxable years beginning after December 31, 2017.</text>
</subsection></section><section id="H9992F997A1F940FDA7E4078E2B701AE0"><enum>203.</enum><header>Modification of rules for capitalization and inclusion in inventory costs of certain expenses</header>
<subsection id="HB1F03A7906A54433B77F410C73B5A112"><enum>(a)</enum><header>Gross receipts exception To apply to property produced by the taxpayer</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/263A">Section 263A(b)</external-xref> is amended by striking all that follows paragraph (1) and inserting the following new paragraphs:</text>
<quoted-block display-inline="no-display-inline" id="HD01F2B69810948599966E999EA3504DE" style="OLC">
<paragraph id="HE0378EBEC8EA4C9796B822D6BD17ADE6"><enum>(2)</enum><header>Property acquired for resale</header><text display-inline="yes-display-inline">Real or personal property described in section 1221(a)(1) which is acquired by the taxpayer for resale.</text>
</paragraph><paragraph id="HD06C9432136241F3905AEB58D52A5DA8"><enum>(3)</enum><header>Exception for small businesses</header><text display-inline="yes-display-inline">This section shall not apply to any property produced or acquired by the taxpayer during any taxable year if the taxpayer is a qualified taxpayer (as defined in section 471(c)(3)) for the taxable year.</text>
</paragraph><paragraph id="H1A8F50BB4478462394C87187B717B41C"><enum>(4)</enum><header>Films, sound recordings, books, etc</header><text>For purposes of this subsection, the term <quote>tangible personal property</quote> shall include a film, sound recording, video tape, book, or similar property.</text> </paragraph><paragraph id="id639411F922BD484EB202B35391D07CC2"><enum>(5)</enum><header>Coordination with section 481</header><text>If a taxpayer changes its method of accounting because this section does not apply to the taxpayer by reason of the exception under paragraph (3) or this section applies to the taxpayer because such exception no longer applies to the taxpayer—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="idBA03A42268FA465C81D60568B535BC09"><enum>(A)</enum><text display-inline="yes-display-inline">such change shall be treated as initiated by the taxpayer, and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id2A3CA468474C4913BBD9119C34E36DE3"><enum>(B)</enum><text display-inline="yes-display-inline">such change shall be treated as made with the consent of the Secretary.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H309246B676D2412CA0D303D00B5E6C0F"><enum>(b)</enum><header>Effective date</header><text>The amendments made by this section shall apply to taxable years beginning after December 31, 2017.</text> </subsection></section><section id="idFC7BDB7D9A9D4BB0AE549508D7C9513F"><enum>204.</enum><header>Increase in gross receipts test for construction contract exception to percentage of completion method</header> <subsection id="idF9850FC7B9BB4F678B69023C4765AB09"><enum>(a)</enum><header>Increase</header> <paragraph id="id92B0B94922404F029E01B11AC48B0AC2"><enum>(1)</enum><header>In general</header><text>Clause (ii) of <external-xref legal-doc="usc" parsable-cite="usc/26/460">section 460(e)(1)(B)</external-xref> is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="id4FC8151F4A8B471A8571EAFFF9184D5C" style="OLC">
<clause id="idAC4E0AE0776B4C54B90D10AA212805D5"><enum>(ii)</enum><text>who meets the gross receipts test of section 448(c) for the taxable year in which such contract is entered into.</text></clause><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="id07A287C8EE0B48A4BD94B4EE808E0797"><enum>(2)</enum><header>Conforming amendments</header>
<subparagraph id="id2EE8B51BE46D4AE5B0B095A296CE2269"><enum>(A)</enum><text>Paragraph (2) of <external-xref legal-doc="usc" parsable-cite="usc/26/460">section 460(e)</external-xref> is amended to read as follows:</text> <quoted-block display-inline="no-display-inline" id="id6EDFD8D60D6348A28430339698B88F6D" style="OLC"> <paragraph id="id49DBBB6EC3C84043B917FD75011A0772"><enum>(2)</enum><header>Additional rules for determining gross receipts</header><text>For purposes of paragraph (1)(B)(ii), the Secretary shall prescribe regulations which provide attribution rules similar to section 448(c) and which take into account gross receipts of taxpayers who engage in construction contracts through partnerships, joint ventures, and corporations and which would otherwise not be taken into account under such section.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="id8FBBB6F9290C4C2B9E870858A53CABCD"><enum>(B)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/460">Section 460(e)</external-xref> is amended by striking paragraph (3) and by redesignating paragraphs (4) through (6) as paragraphs (3) through (5), respectively.</text>
</subparagraph><subparagraph id="id4A739EAA4DA649FCA79DA9EC55C45D6E"><enum>(C)</enum><text>The last sentence of <external-xref legal-doc="usc" parsable-cite="usc/26/56">section 56(a)(3)</external-xref> is amended by striking <quote>section 460(e)(6)</quote> and inserting <quote>section 460(e)(5)</quote>.</text> </subparagraph></paragraph></subsection><subsection id="idD5309CA5F9F147289B3A43463FC6D419"><enum>(b)</enum><header>Coordination with section 481</header><text>Section 460(e), as amended by subsection (a), is amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="idD443799FF78846048A6E5AD586DC5C8C" style="OLC">
<paragraph id="idC5AD31BCC2CE42AF8221C0011FA9AE22"><enum>(6)</enum><header>Coordination with section 481</header><text>If a taxpayer changes its method of accounting because subsections (a), (b), and (c) (1) and (2) do not apply by reason of the exception under paragraph (1)(B) or such subsections apply to the taxpayer because such exception no longer applies to the taxpayer—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="id6C019536B4254D25BCDB0ED428881210"><enum>(A)</enum><text display-inline="yes-display-inline">such change shall be treated as initiated by the taxpayer,</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id910BCE8D661A42E69D16C0B37DADB526"><enum>(B)</enum><text display-inline="yes-display-inline">such change shall be treated as made with the consent of the Secretary, and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id89C3F8621B884325B09925150D60EED7"><enum>(C)</enum><text display-inline="yes-display-inline">such change shall be permitted only on a cut-off basis and no adjustments under section 481(a) shall be made.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="idBC5D430E87CC410E932D2A421B9590D1"><enum>(c)</enum><header>Effective date</header><text>The amendment made by this section shall apply to contracts entered into after December 31, 2017, in taxable years ending after such date.</text>
</subsection></section><enum>III</enum><header>Modifications of expensing and cost recovery rules</header>
<subtitle id="idC4C7FE0BDEE341268E28AB0C3AA5A80A" style="OLC"><enum>A</enum><header>Expensing rules</header>
<section id="id452C5C38096248D7A3FC723752208485"><enum>301.</enum><header>Modifications of rules for expensing depreciable business
assets</header>
<subsection commented="no" display-inline="no-display-inline" id="id14BE45041C204CCB80B6DAC0081A60C0"><enum>(a)</enum><header>Increase in limitation</header>
<paragraph commented="no" display-inline="no-display-inline" id="idF2F255FD3B08481CACC7F9E502CCCBA6"><enum>(1)</enum><header>Dollar
limitation</header><text>Section 179(b)(1) by striking <quote>$500,000</quote> and inserting <quote>$2,000,000</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id9EB44121E843455A868E9E8D2DFEA6B9"><enum>(2)</enum><header>Reduction in
limitation</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/179">Section 179(b)(2)</external-xref> is amended by striking <quote>$2,000,000</quote> and inserting <quote>$3,000,000</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="idFA88AD77385244C4A5E7450C6625BE52"><enum>(3)</enum><header>Inflation adjustments</header>
<subparagraph commented="no" display-inline="no-display-inline" id="idAEAA249B13834A42B7E97C1073841346"><enum>(A)</enum><header>In general</header><text>Subparagraph (A) of <external-xref legal-doc="usc" parsable-cite="usc/26/179">section 179(b)(6)</external-xref> is amended—</text> <clause commented="no" display-inline="no-display-inline" id="id29AD5F0682B7490C9A736F43B7B13DA8"><enum>(i)</enum><text>by striking <quote>2015</quote> and inserting <quote>2018</quote>, and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="id01D23EF049ED491BA14B0D84A8AC3B1C"><enum>(ii)</enum><text>by striking <quote>calendar year 2014</quote> in clause (ii) and inserting <quote>calendar year 2017</quote>.</text> </clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idC29B8BF82D3E4D1BBE25E7DBF5C480C7"><enum>(B)</enum><header>Sport utility vehicles</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/179">Section 179(b)(6)</external-xref> is amended—</text>
<clause commented="no" display-inline="no-display-inline" id="idA25F737A53CF48E599F6D7113218CE83"><enum>(i)</enum><text>by striking <quote>paragraphs (1) and (2)</quote> in subparagraph (A) and inserting <quote>paragraphs (1), (2), and (5)(A)</quote>, and</text> </clause><clause commented="no" display-inline="no-display-inline" id="idB42E94C7FF1642DC92E94EA8598A56AC"><enum>(ii)</enum><text>by inserting <quote>(($100 in the case of any increase in the amount under paragraph (5)(A))</quote> after <quote>$10,000</quote> in subparagraph (B).</text>
</clause></subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="idD028CA64FDA5462F9A879F898590C056"><enum>(b)</enum><header>Section 179 property To include qualified real property</header>
<paragraph commented="no" display-inline="no-display-inline" id="id7D892FFDD9734722A57F32DCC4C6D71E"><enum>(1)</enum><header>In general</header><text>Subparagraph (B) of <external-xref legal-doc="usc" parsable-cite="usc/26/179">section 179(d)(1)</external-xref> is amended to read as follows:</text> <quoted-block display-inline="no-display-inline" id="idC73922E707614814A242C81ACAC5D2F7" style="OLC"> <subparagraph commented="no" display-inline="no-display-inline" id="idA8110A7E57BC4D498D2858ED71FF1266"><enum>(B)</enum><text>which is—</text>
<clause commented="no" display-inline="no-display-inline" id="id7C9B9A32BDE9489F8D743EFBB7692D60"><enum>(i)</enum><text>section 1245 property (as defined in section 1245(a)(3)), or</text> </clause><clause commented="no" display-inline="no-display-inline" id="id19BA3A740ACC484482A6AFB1DDAC525A"><enum>(ii)</enum><text>qualified real property (as defined in subsection (f)), and</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id3E7E687CDF07437CAFEA000E3B53C518"><enum>(2)</enum><header>Qualified real property defined</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/179">Section 179(f)</external-xref> is amended to read as follows:</text> <quoted-block display-inline="no-display-inline" id="id87AB9DAA59B54CF8A43F55433EB37231" style="OLC"> <subsection commented="no" display-inline="no-display-inline" id="id0D512FA28180495AA076BB083320127E"><enum>(f)</enum><header>Qualified real property</header><text>For purposes of this subsection, the term <term>qualified real property</term> means—</text>
<paragraph commented="no" display-inline="no-display-inline" id="id45719286B7574FAD80EAAD5BCF3929EC"><enum>(1)</enum><text>any qualified improvement property described in section 168(k)(3), and</text> </paragraph><paragraph commented="no" display-inline="no-display-inline" id="id18159A83AB224A19A82840A57CAF8637"><enum>(2)</enum><text>any of the following improvements to nonresidential real property placed in service after the date such property was first placed in service:</text>
<subparagraph commented="no" display-inline="no-display-inline" id="idC9FFAABA4FB148DC8F2DEA4575C78FAF"><enum>(A)</enum><text>Roofs.</text> </subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id74DA6D97AAD94A1995E0039D5026AEE0"><enum>(B)</enum><text>Heating, ventilation, and air-conditioning property.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id5341A412BA684CA697E8C6BE1D3ADC43"><enum>(C)</enum><text>Fire protection and alarm systems.</text> </subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id1723A839729847C19A8BC14FABE64390"><enum>(D)</enum><text>Security systems.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id735B91A87CAB4168B996AD7741B79E85"><enum>(c)</enum><header>Repeal of exclusion for certain property</header><text>The last sentence of <external-xref legal-doc="usc" parsable-cite="usc/26/179">section 179(d)(1)</external-xref> is amended by inserting <quote>(other than paragraph (2) thereof)</quote> after <quote>section 50(b)</quote>.</text> </subsection><subsection commented="no" display-inline="no-display-inline" id="id452EF3C71E6C4D43B50BB3A4E93E27E8"><enum>(d)</enum><header>Effective date</header><text>The amendments made by this section shall apply to property placed in service in taxable years beginning after December 31, 2017.</text>
</subsection></section></subtitle><subtitle id="idDD4FA358D3B04F84BF9F74CF74E28CBE" style="OLC"><enum>B</enum><header>Cost recovery rules</header>
<section id="id32FDD177F80C4BF4AA1C64E775D588D3"><enum>311.</enum><header>50-percent expensing made permanent</header>
<subsection id="H5AC944420720497FB4C8360E4C734774"><enum>(a)</enum><header>In general</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/168">Section 168(k)(2)</external-xref> is amended to read as follows:</text> <quoted-block id="H537ADA5FE24A49E68E86F4F344775050" style="OLC"> <paragraph id="H57559245F2C24011A85079233CE7FB08"><enum>(2)</enum><header>Qualified property</header><text>For purposes of this subsection—</text>
<subparagraph id="HBDB4C017AE81432BBE6B9593AFC18370"><enum>(A)</enum><header>In general</header><text>The term <quote>qualified property</quote> means property—</text> <clause id="H246F8F0D3B8241A48574D61B80B0EBA1"><enum>(i)</enum><subclause commented="no" display-inline="yes-display-inline" id="H486C7F67AA3D4256B2D8143AF3965B4D"><enum>(I)</enum><text>to which this section applies which has a recovery period of 20 years or less,</text>
</subclause><subclause id="H7811E2AFA1E74BBCA0CA3135E2BBDF96" indent="up1"><enum>(II)</enum><text>which is computer software (as defined in section 167(f)(1)(B)) for which a deduction is allowable under section 167(a) without regard to this subsection,</text>
</subclause><subclause id="HB7EBE272037D4284808DD17C6C8626F6" indent="up1"><enum>(III)</enum><text>which is water utility property, or</text> </subclause><subclause id="HF4D777403CC04F71A8282D25BA95E4A0" indent="up1"><enum>(IV)</enum><text>which is qualified improvement property, and</text>
</subclause></clause><clause id="HAB18C6AA65F24A9CB6B8C9675A0FBC88"><enum>(ii)</enum><text>the original use of which commences with the taxpayer.</text> </clause></subparagraph><subparagraph id="H31B3E77D134A46BBBF690428DC44F728"><enum>(B)</enum><header>Exception for alternative depreciation property</header><text>The term <quote>qualified property</quote> shall not include any property to which the alternative depreciation system under subsection (g) applies, determined—</text>
<clause id="H712D2B6D92DA4175B8520CA57C3E9927"><enum>(i)</enum><text>without regard to paragraph (7) of subsection (g) (relating to election to have system apply), and</text> </clause><clause id="H80B9156966044084864EB8C79EDFD098"><enum>(ii)</enum><text>after application of section 280F(b) (relating to listed property with limited business use).</text>
</clause></subparagraph><subparagraph id="H434EF52DE7DD488CBEC1135A18BEE60A"><enum>(C)</enum><header>Special rules</header>
<clause id="H68BF1CC53F944274B9B53013438A0745"><enum>(i)</enum><header>Sale-leasebacks</header><text>For purposes of clause (ii) and subparagraph (A)(ii), if property is—</text> <subclause id="H1B66336356B6467EBB29926264F8DFC1"><enum>(I)</enum><text>originally placed in service by a person, and</text>
</subclause><subclause id="H66C26EB26B9F4CEFA8276F7308979E6E"><enum>(II)</enum><text>sold and leased back by such person within 3 months after the date such property was originally placed in service,</text>
</subclause><continuation-text continuation-text-level="clause">such property shall be treated as originally placed in service not earlier than the date on which
such property is used under the leaseback referred to in subclause (II).</continuation-text></clause><clause id="H0498D16D100A4188B6B59918AA8D89E6"><enum>(ii)</enum><header>Syndication</header><text>For purposes of subparagraph (A)(ii), if—</text> <subclause id="H0BA2FF220FAD4E70AAADC20E3BC2FF09"><enum>(I)</enum><text>property is originally placed in service by the lessor of such property,</text>
</subclause><subclause id="HB06181EC05F94A9AA0F0066FB5E906CC"><enum>(II)</enum><text>such property is sold by such lessor or any subsequent purchaser within 3 months after the date such property was originally placed in service (or, in the case of multiple units of property subject to the same lease, within 3 months after the date the final unit is placed in service, so long as the period between the time the first unit is placed in service and the time the last unit is placed in service does not exceed 12 months), and</text>
</subclause><subclause id="H795F64FD008546B2A3A4DF523C38A391"><enum>(III)</enum><text>the user of such property after the last sale during such 3-month period remains the same as when such property was originally placed in service,</text>
</subclause><continuation-text continuation-text-level="clause">such property shall be treated as originally placed in service not earlier than the date of such
last sale.</continuation-text></clause></subparagraph><subparagraph id="H8937EB2333644199B138EAF48736C4B7"><enum>(D)</enum><header>Coordination with section 280F</header><text>For purposes of section 280F—</text> <clause id="HDD9EF615BC06426D944107E03A681A1F"><enum>(i)</enum><header>Automobiles</header><text>In the case of a passenger automobile (as defined in section 280F(d)(5)) which is qualified property, the Secretary shall increase the limitation under section 280F(a)(1)(A)(i) to an amount equal to the lesser of—</text>
<subclause id="idA76376DF48C841DFB42B862A2204EEB9"><enum>(I)</enum><text>50 percent of the adjusted basis of such automobile, or</text> </subclause><subclause id="id22293F2054F44C5F9ECD06A52666B81E"><enum>(II)</enum><text>$25,000.</text>
</subclause></clause><clause id="HB4499D3FDBED440A891C832DEFE93370"><enum>(ii)</enum><header>Listed property</header><text>The deduction allowable under paragraph (1) shall be taken into account in computing any recapture amount under section 280F(b)(2).</text>
</clause><clause id="H1DCE999C954941BEA3167C0A751DDC91"><enum>(iii)</enum><header>Inflation adjustment</header><text display-inline="yes-display-inline">In the case of any taxable year beginning in a calendar year after 2018, the $25,000 amount in clause (i) shall be increased by an amount equal to—</text>
<subclause id="H4FFFC85E0D70410FA0F3F3860660F8FA"><enum>(I)</enum><text>such dollar amount, multiplied by</text> </subclause><subclause id="H2ECF83C8D04147EAABC2E60EC9BC5E00"><enum>(II)</enum><text>the automobile price inflation adjustment determined under section 280F(d)(7)(B)(i) for the calendar year in which such taxable year begins by substituting <quote>2017</quote> for <quote>1987</quote> in subclause (II) thereof.</text>
</subclause><continuation-text continuation-text-level="clause">If any increase under the preceding sentence is not a multiple of $100, such increase shall be
rounded to the nearest multiple of $100.</continuation-text></clause></subparagraph><subparagraph id="HD888A0970BA7459AB5630A0E52FECFBE"><enum>(E)</enum><header>Deduction allowed in computing minimum tax</header><text>For purposes of determining alternative minimum taxable income under section 55, the deduction under section 167 for qualified property shall be determined without regard to any adjustment under section 56.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H7382281542344C9789CDDE02A3B544D4"><enum>(b)</enum><header>Conforming amendments</header>
<paragraph id="idD1DAA17EBAA44E24B71B7B0947ACC601"><enum>(1)</enum><header>Amendments related to 50-percent expensing</header>
<subparagraph id="id87365044725A4CE3B854DEEFAFA9183C"><enum>(A)</enum><text>Each of the following provisions are amended by striking <quote>(2)(F)</quote> each place it appears and inserting <quote>(2)(D)</quote>:</text> <clause id="id90984B85B93844D7972892DF75A8E130"><enum>(i)</enum><text>Subparagraphs (A)(i), (B)(i), and (D)(ii)(I) of section 168(k)(4).</text>
</clause><clause id="id9FCE2D8055C24C339D82FBDBFE237CC9"><enum>(ii)</enum><text>Section 168(k)(7).</text> </clause></subparagraph><subparagraph id="idD5D6E91A136D4480ADB17BD80620BD9C"><enum>(B)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/168">Section 168(k)(5)</external-xref> is amended—</text>
<clause id="idCBD003B5AF3944EA8DF668115E2C21BD"><enum>(i)</enum><text>in subparagraph (A)—</text> <subclause id="id1770CD1A62F249FE921CE409BA4E1703"><enum>(I)</enum><text>by striking <quote>before January 1, 2020</quote>, and</text>
</subclause><subclause id="idF5F7B6257B454038A406251025EC9403"><enum>(II)</enum><text>by striking <quote>before such date</quote>,</text> </subclause></clause><clause id="id16B8E575E31E48B19ECA4EA6826D379E"><enum>(ii)</enum><text>in subparagraph (B)(ii)—</text>
<subclause id="idD94D63B7A1CE4189979FCB10C9526775"><enum>(I)</enum><text>by inserting <quote>crop or</quote> after <quote>will have more than one</quote>, and</text> </subclause><subclause id="idABAD597B4CB047A5AB8ADAA440D7B928"><enum>(II)</enum><text>by inserting <quote>a marketable crop or yield of</quote> after <quote>begins bearing</quote>,</text>
</subclause></clause><clause id="id302F8EFEE9554E18BC8D432F4ABF27E5"><enum>(iii)</enum><text>by striking <quote>(2)(G)</quote> in subparagraph (E) and inserting <quote>(2)(E)</quote>, and</text> </clause><clause id="id1241F07B59AF4A879E153A878B3F33C0"><enum>(iv)</enum><text>by striking subparagraph (F).</text>
</clause></subparagraph><subparagraph id="id8953429E676F4C9588247B99CA1647FC"><enum>(C)</enum><text>Section 168(k), as amended by subparagraphs (A)(ii) and (D), is amended by striking paragraph (6) and by redesignating paragraph (7) as paragraph (6).</text>
</subparagraph><subparagraph id="id4EB30C075B694ADBABCDAF3D1040A376"><enum>(D)</enum><text>Section 168(k)(7), as in effect before the amendments made by subparagraphs (A)(ii) and (C), is amended by striking <quote>paragraphs (1) and (2)(F)</quote> and inserting <quote>paragraphs (1), (2)(F), and (4)</quote>.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id4D93D6BAAE7148FF8487E8C605897365"><enum>(E)</enum><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/168">Section 168(k)</external-xref> is amended by striking <quote><header-in-text level="subsection" style="OLC">acquired after December 31, 2007, and before January 1, 2020</header-in-text></quote> in the heading thereof.</text> </subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idE038B006C6A642038777641A8D926E3F"><enum>(F)</enum><text>Subsections (e)(7)(B), (k)(4), (l)(3)(A), (m)(2)(B)(i), and (n)(2)(B)(i) of section 168 are each amended by striking <quote>bonus depreciation</quote> each place it appears in the text and headings thereof and inserting <quote>50-percent expensing</quote>.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id85A4CF32A768402DBE1346AFFF2667D0"><enum>(2)</enum><header>Other conforming amendments</header>
<subparagraph id="H3B255CF41CD6495C89539F825135FDA8"><enum>(A)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/168">Section 168(l)(3)(B)</external-xref> is amended by striking <quote>subsection (k)(2)(D)</quote> and inserting <quote>subsection (k)(2)(B)</quote>.</text>
</subparagraph><subparagraph id="H87278D5124E94CB88486BCB81532F015"><enum>(B)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/168">Section 168(l)(4)</external-xref> is amended by striking <quote>subsection (k)(2)(E)</quote> and inserting <quote>subsection (k)(2)(C)</quote>.</text> </subparagraph><subparagraph id="HB417B0F0920C4605B3AADBDF256DA2ED"><enum>(C)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/168">Section 168(l)(5)</external-xref> is amended by striking <quote>subsection (k)(2)(G)</quote> and inserting <quote>subsection (k)(2)(E)</quote>.</text>
</subparagraph><subparagraph id="H3E5DC857D1084D2FB761F6C4A05784BD"><enum>(D)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/460">Section 460(c)(6)(B)</external-xref> is amended by striking <quote>which—</quote> and all that follows and inserting <quote>which has a recovery period of 7 years or less.</quote>.</text> </subparagraph></paragraph></subsection><subsection id="HF55DF66E96DB479D9FAE76F68DBB5E98"><enum>(c)</enum><header>Effective dates</header> <paragraph id="id2751D156DDB84CBB9A40365D9A39129A"><enum>(1)</enum><header>In general</header><text>The amendments made by this section shall apply to property placed in service after December 31, 2017, in taxable years ending after such date.</text>
</paragraph><paragraph id="id4A4C9401357B4CCB914365CFB466B8E9"><enum>(2)</enum><header>Certain technical corrections</header>
<subparagraph id="id81267425313A44489E0A9C85673932D7"><enum>(A)</enum><text>The amendments made by subsection (b)(1)(B)(ii) shall apply to specified plants planted or grafted after December 31, 2015.</text>
</subparagraph><subparagraph id="id072081B768C64018A2BB19AA2C39F03E"><enum>(B)</enum><text>The amendment made by subsection (b)(1)(D) shall apply to property placed in service after December 31, 2015, in taxable years ending after such date.</text>
</subparagraph></paragraph></subsection></section><section id="id2AA67909A5474CC1BA7D00737C2F4BCB"><enum>312.</enum><header>Modifications of treatment of certain farm property</header>
<subsection id="idC74BA8D4AC9D447291D2D41585BAC550"><enum>(a)</enum><header>Treatment of certain farm property as 5-Year property</header><text>Clause (vii) of <external-xref legal-doc="usc" parsable-cite="usc/26/168">section 168(e)(3)(B)</external-xref> is amended by striking <quote>after December 31, 2008, and which is placed in service before January 1, 2010</quote>.</text> </subsection><subsection id="id7B7A9EAFA6D74AD68BCF0951D147FC4A"><enum>(b)</enum><header>Repeal of required use of 150-Percent declining balance method</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/168">Section 168(b)(2)</external-xref> is amended by striking subparagraph (B) and by redesignating subparagraphs (C) and (D) as subparagraphs (B) and (C), respectively.</text>
</subsection><subsection id="id6ABAF70350F64B619CEBC2F5655A908C"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to property placed in service after December 31, 2017, in taxable years ending after such date.</text>
</subsection></section><section id="idA7778BAF00734B49AE742D00192E0568"><enum>313.</enum><header>Secretarial requirement to reexamine economic depreciation for classes of depreciable property</header>
<subsection id="id1B459477D4D544A7BE8B6EAE40555B77"><enum>(a)</enum><header>In general</header><text>Paragraph (1) of <external-xref legal-doc="usc" parsable-cite="usc/26/168">section 168(i)</external-xref> is amended to read as follows:</text> <quoted-block display-inline="no-display-inline" id="id53A8862C72814EB783C920E321A3CA34" style="OLC"> <paragraph id="H4F2C66A2A7784A89B3371530AFDE73E8"><enum>(1)</enum><header>Class life</header> <subparagraph id="HEFBD874B8216424C85F7A02AD8DC1458"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">Except as provided in this section, the term <quote>class life</quote> means the class life (if any) which would be applicable with respect to any property as of January 1, 1986, under subsection (m) of section 167 (determined without regard to paragraph (4) and as if the taxpayer had made an election under such subsection). The reference in this paragraph to subsection (m) of section 167 shall be treated as a reference to such subsection as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990.</text>
</subparagraph><subparagraph id="H8AAB3F53F599477F87C71EF865C34670"><enum>(B)</enum><header>Secretarial authority to modify Rev. Proc. 87–56</header>
<clause id="H275351191A8C489D8BCAA876720701D0"><enum>(i)</enum><header>In general</header><text>The Secretary, through the Office of Tax Analysis and in consultation with the Bureau of Economic Analysis of the Department of Commerce, shall conduct an on-going study to—</text>
<subclause id="H4D97DB910CCA418FA07E60D4B49A231E"><enum>(I)</enum><text>determine, and develop a schedule of, the economic depreciation of the major categories of depreciable property (other than specified property) to approximate constant straight-line depreciation, and</text>
</subclause><subclause id="H20E329217D924E1685F8D240AD8423B1"><enum>(II)</enum><text>develop recommendations regarding the proper economic depreciation for specified property.</text> </subclause></clause><clause id="H396CB4CBA7FA46949A2DA433DE2885E3"><enum>(ii)</enum><header>Report</header><text>Not later than December 31, 2020, and not less frequently than every 5 years after such date, the Secretary shall submit to the Committee on Finance of the Senate and to the Committee on Ways and Means of the House of Representatives—</text>
<subclause id="H92D2A1012DCF4C8383DFDECB5E33A1C8"><enum>(I)</enum><text>any schedule developed under clause (i)(I), and</text> </subclause><subclause id="HDA7FA22972574B40938BCE869F6ECC10"><enum>(II)</enum><text>any recommendations developed under clause (i)(II).</text>
</subclause></clause><clause id="id1DF664E8783C4655AC6668DF9D7F748E"><enum>(iii)</enum><header>Effective date of schedules</header><text>Any schedule developed under clause (i)(I) and submitted to Congress under clause (ii) shall take effect with respect to property placed in service on or after first day of the first calendar year beginning at least 1 year after the date such schedule is submitted.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idA86661BC50A241EDAB902B9C538903A6"><enum>(C)</enum><header>Treatment under Congressional Review Act</header><text>For purposes of applying <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/5/8">chapter 8</external-xref> of title 5, United States Code, any schedule developed and submitted under subparagraph (B) shall be treated as a major rule.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idAF4D3183DCE04306A6B0A9F50C1CD768"><enum>(D)</enum><header>Specified property</header><text>For purposes of subparagraph (B), the term <term>specified property</term> means—</text> <clause commented="no" display-inline="no-display-inline" id="idF6B04032A69D49AC9E2D2BBDD9148018"><enum>(i)</enum><text>any property which is classified under subsection (e)(3) (other than subparagraph (C)(v) thereof), or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="id6FB0ED4624FB4F0F8010BB7BBAC0AEFD"><enum>(ii)</enum><text>any nonresidential real property, residential rental property, railroad grading or tunnel bore, or water utility property.</text></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id5F8F74826859481BA3449AB819C84688"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall take effect on the date of the enactment of this Act.</text> </subsection></section><section id="id7074548C420047E6A2DEA970947C65F4"><enum>314.</enum><header>Modifications to depreciation limitations on luxury automobiles and personal use property</header> <subsection id="id904B14DB0439474CA02A10E3B23999DF"><enum>(a)</enum><header>Luxury automobiles</header> <paragraph id="id42CEFD63A4554E7FA5AEF79FB280448F"><enum>(1)</enum><header>In general</header><text>280F(a)(1)(A) is amended—</text>
<subparagraph id="idFA5238A5B68D4498B4B14845F9D3FD2A"><enum>(A)</enum><text>by striking <quote>$2,560</quote> in clause (i) and inserting <quote>$10,000</quote>,</text> </subparagraph><subparagraph id="id7B3B3465A2304408A03F00071C05984F"><enum>(B)</enum><text>by striking <quote>$4,100</quote> in clause (ii) and inserting <quote>$16,000</quote>,</text>
</subparagraph><subparagraph id="id8E971596018E41D9854A7E695C563531"><enum>(C)</enum><text>by striking <quote>$2,450</quote> in clause (iii) and inserting <quote>$9,600</quote>, and</text> </subparagraph><subparagraph id="id63BC5355F6D543D1842F6C1DE4479760"><enum>(D)</enum><text>by striking <quote>$1,475</quote> in clause (iv) and inserting <quote>$5,760</quote>.</text>
</subparagraph></paragraph><paragraph id="id2D94AE9B6C714228B5533DE6F0C2B79F"><enum>(2)</enum><header>Conforming amendments</header>
<subparagraph id="idCEDF81990E6D497986F61570BB49D644"><enum>(A)</enum><text>Clause (ii) of <external-xref legal-doc="usc" parsable-cite="usc/26/280F">section 280F(a)(1)(B)</external-xref> is amended by striking <quote>$1,475</quote> in the text and heading and inserting <quote>$5,760</quote>.</text> </subparagraph><subparagraph id="idDB77F445278B45EBBF4FCCA027A090C1"><enum>(B)</enum><text>Paragraph (7) of <external-xref legal-doc="usc" parsable-cite="usc/26/280F">section 280F(d)</external-xref> is amended—</text>
<clause id="id7FA8FD2A336049DBAB6CEA62CDAF524E"><enum>(i)</enum><text>by striking <quote>1988</quote> in subparagraph (A) and inserting <quote>2018</quote>, and</text> </clause><clause id="idCD029FD1395146BFBD48805FAECE2E2F"><enum>(ii)</enum><text>by striking <quote>1987</quote> in subparagraph (B)(i)(II) and inserting <quote>2017</quote>.</text>
</clause></subparagraph></paragraph></subsection><subsection id="idCC24EA62DE374CCEA8FDB11C4E2A987E"><enum>(b)</enum><header>Removal of computer equipment from listed property</header>
<paragraph id="id2E6A82B10E9F42F0B2D1BE0BD50DBCAC"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/280F">Section 280F(d)(4)(A)</external-xref> is amended by inserting <quote>and</quote> at the end of clause (iii) and by striking clause (iv).</text> </paragraph><paragraph id="idF54AC95498714082818EE3D103274D40"><enum>(2)</enum><header>Conforming amendment</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/280F">Section 280F(d)(4)</external-xref> is amended by striking subparagraph (B) and by redesignating subparagraph (C) as subparagraph (B).</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id32AB6ABD8606485CA8D749D4A3610D44"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to property placed in service after December 31, 2017, in taxable years ending after such date.</text>
</subsection></section><section id="id35ED46A7A4C44C488ACED5EF9FAB7648"><enum>315.</enum><header>Reduction in amortization period for intangibles</header>
<subsection id="id93FC1E6CFCB342E9B7AF9DC38E1F84B5"><enum>(a)</enum><header>In general</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/197">Section 197(a)</external-xref> is amended by adding at the end the following new sentence: <quote>In the case of such an intangible acquired after the date of the enactment of the <short-title>INVEST Act of 2017</short-title>, the preceding sentence shall be applied by substituting <quote>10-year period</quote> for <quote>15-year period</quote>.</quote>.</text> </subsection><subsection id="id8721BD8DB78F4C08AEE790556B0BFEAD"><enum>(b)</enum><header>Application of anti-Churning rules</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/197">Section 197(f)(9)</external-xref> is amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="id82D948B5398F4EFA9A533D2BD63A6A0A" style="OLC">
<subparagraph id="id9C7DF2163E7746B7B5F1F35D541988BF"><enum>(G)</enum><header>Application to INVEST Act changes</header><text>If subparagraph (A) or (F) would apply to any section 197 intangible if—</text> <clause id="id3081EF695F8D41ACAD19792AF6FA266F"><enum>(i)</enum><text><quote>the date of the enactment of the <short-title>INVEST Act of 2017</short-title></quote> were substituted for <quote>the date of the enactment of this section</quote> each place it appears in each such subparagraph, and</text>
</clause><clause id="id8EE97789E2ED49A896895EEDFC220FD9"><enum>(ii)</enum><text><quote>May 17, 2017</quote> were substituted for <quote>July 25, 1991</quote> each place it appears in subparagraph (A),</text> </clause><continuation-text continuation-text-level="subparagraph">then the last sentence of subsection (a) (relating to 10-year amortization) shall not apply to the transferee of such intangible.</continuation-text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection id="idF30E52CFD82A47CE82F6EC5AD7A63762"><enum>(c)</enum><header>Conforming amendment</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/197">Section 197(e)(4)(D)(i)</external-xref> is amended by inserting <quote>(10 years in the case of a right acquired after the date of the enactment of the <short-title>INVEST Act of 2017</short-title>)</quote> after <quote>15 years</quote>.</text>
</subsection><subsection id="idE69DF677674647FFB864B269161ED92D"><enum>(d)</enum><header>Effective date</header><text>The amendments made by this section apply to acquisitions after the date of the enactment of this Act in taxable years ending after such date.</text></subsection></section></subtitle>