[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3952 Introduced in House (IH)]

103d CONGRESS
  2d Session
                                H. R. 3952

To amend the Internal Revenue Code of 1986 to alleviate the inequitable 
  tax treatment of individuals operating small, expanding publishing 
 businesses as S corporations or partnerships, thereby encouraging the 
               growth and development of such businesses.


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                    IN THE HOUSE OF REPRESENTATIVES

                             March 3, 1994

 Mr. Cardin (for himself and Mr. Shaw) introduced the following bill; 
         which was referred to the Committee on Ways and Means

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                                 A BILL


 
To amend the Internal Revenue Code of 1986 to alleviate the inequitable 
  tax treatment of individuals operating small, expanding publishing 
 businesses as S corporations or partnerships, thereby encouraging the 
               growth and development of such businesses.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. MODIFICATION TO MINIMUM TAX TREATMENT OF CIRCULATION 
              EXPENSES.

    (a) General Rule.--Subparagraph (D) of section 56(b)(2) of the 
Internal Revenue Code of 1986 (relating to circulation and research and 
experimental expenditures) is amended to read as follows:
                    ``(D) Exception for certain expenditures.--If the 
                taxpayer materially participates (within the meaning of 
                section 469(h)) in an activity, this paragraph shall 
                not apply to any amount allowable as a deduction under 
                section 173 or 174(a) for expenditures paid or incurred 
                in connection with such activity.''
    (b) Effective Date.--
            (1) In general.--The amendment made by subsection (a) shall 
        apply to expenditures paid or incurred in taxable years ending 
        after the date of the enactment of this Act.
            (2) 5-year spread for previously capitalized 
        expenditures.--
                    (A) In general.--For purposes of determining the 
                alternative minimum taxable income of any taxpayer, the 
                expenditures described in subparagraph (B) shall be 
                amortized ratably over the 5-year period beginning with 
                the first day of the first taxable year ending after 
                the date of the enactment of this Act. Such 
                amortization shall be treated as the amount allowable 
                under section 56(b)(2)(A) of the Internal Revenue Code 
                of 1986.
                    (B) Description of expenditures.--The expenditures 
                described in this subparagraph consist of the 
                unamortized balance (as of the close of the taxpayer's 
                last taxable year ending before the date of the 
                enactment of this Act) of the circulation expenditures 
                which were capitalized under section 56(b)(2)(A) of the 
                Internal Revenue Code of 1986 and which would not have 
                been so capitalized if the amendment made by subsection 
                (a) had applied to the taxable years in which such 
                expenditures were paid or incurred.

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