[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3362 Introduced in House (IH)]







110th CONGRESS
  1st Session
                                H. R. 3362

To amend the Internal Revenue Code of 1986 to allow 5-year amortization 
of goodwill and other section 197 intangibles that are acquired from a 
                            small business.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             August 3, 2007

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

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to allow 5-year amortization 
of goodwill and other section 197 intangibles that are acquired from a 
                            small business.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Tax Fairness for Small Business Act 
of 2007''.

SEC. 2. 5-YEAR AMORTIZATION OF CERTAIN INTANGIBLES ACQUIRED FROM 
              ELIGIBLE SMALL BUSINESSES.

    (a) In General.--Section 197 of the Internal Revenue Code of 1986 
(relating to amortization of goodwill and certain other intangibles) is 
amended by redesignating subsection (g) as subsection (h) and inserting 
after subsection (f) the following new subsection:
    ``(g) 5-Year Amortization of Intangibles Acquired From Eligible 
Small Businesses.--
            ``(1) In general.--In the case of any qualified amortizable 
        section 197 intangible, subsection (a) shall be applied by 
        substituting `5-year period' for `15-year period'.
            ``(2) Qualified amortizable section 197 intangible.--For 
        purposes of this subsection, the term `qualified amortizable 
        section 197 intangible' means any amortizable section 197 
        intangible which is acquired in a transaction (or series of 
        transactions) involving the acquisition of assets constituting 
        a trade or business or substantial portion thereof from an 
        eligible small business (as defined in section 474(c)) after 
        December 31, 2006.
            ``(3) Maximum amount per business.--
                    ``(A) In general.--The aggregate adjusted basis of 
                qualified amortizable section 197 intangibles of each 
                eligible small business which the taxpayer may amortize 
                under paragraph (1) shall not exceed $5,000,000.
                    ``(B) Allocation of dollar amount.--
                            ``(i) Controlled group.--For purposes of 
                        applying the dollar limitations in subparagraph 
                        (A)--
                                    ``(I) all component members of a 
                                controlled group shall be treated as 
                                one taxpayer, and
                                    ``(II) such dollar limitations 
                                shall be allocated among the component 
                                members of such controlled group in 
                                such manner as the Secretary 
                                prescribes.
                        For purposes of the preceding sentence, the 
                        term `controlled group' has the meaning given 
                        to such term by section 1563(a), except that 
                        `more than 50 percent' shall be substituted for 
                        `at least 80 percent' each place it appears in 
                        section 1563(a)(1).
                            ``(ii) Partnerships and s corporations.--In 
                        the case of a partnership, the dollar 
                        limitations in subparagraph (A) shall apply 
                        with respect to the partnership and with 
                        respect to each partner. A similar rule shall 
                        apply in the case of an S corporation and its 
                        shareholders.
                    ``(C) Subsection not to apply to trusts.--This 
                subsection shall not apply to trusts.
                    ``(D) Estates.--The benefit of the special 
                deduction provided by this subsection shall be allowed 
                to estates in the same manner as in the case of an 
                individual. The allowable deduction shall be 
                apportioned between the income beneficiary and the 
                fiduciary in the manner prescribed by the Secretary. 
                Any amount so apportioned to a beneficiary shall be 
                taken into account for purposes of determining the 
                amount allowable as a deduction under this subsection 
                to such beneficiary.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to acquisitions of qualified amortizable section 197 intangibles (as 
defined in section 197(g)(2) of the Internal Revenue Code of 1986, as 
added by this section) after December 31, 2006.
                                 <all>