110 HR 868 IH: Family Small Business Tax Fairness Act of 2007 U.S. House of Representatives 2007-02-07 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.

I 110th CONGRESS 1st Session H. R. 868 IN THE HOUSE OF REPRESENTATIVES February 7, 2007 Mr. Doggett (for himself, Mr. Becerra, Mr. Blumenauer, Mr. Davis of Illinois, Ms. DeLauro, Mr. Filner, Mr. Gene Green of Texas, Mr. Grijalva, Mr. Hinojosa, Mr. Holt, Mr. Kind, Mr. Larson of Connecticut, Mr. Lewis of Georgia, Mr. McDermott, Mr. McGovern, Mr. Meek of Florida, Mr. Moore of Kansas, Mrs. Napolitano, Mr. Neal of Massachusetts, Mr. Kennedy, Mr. Pascrell, Ms. Schwartz, Mr. Sherman, Mr. Stark, Mr. Thompson of California, Mrs. Jones of Ohio, Ms. Velázquez, and Mr. Rodriguez) 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 a married couple who operates a unincorporated business as co-owners to file separate self-employment tax returns.

1.

Short title

This Act may be cited as the Family Small Business Tax Fairness Act of 2007.

2.

Unincorporated businesses operated by husband and wife as co-owners

(a)

In general

Section 761 of the Internal Revenue Code of 1986 (defining terms for purposes of partnerships) is amended by redesignating subsection (f) as subsection (g) and by inserting after subsection (e) the following new subsection: (f)

Qualified joint venture

(1)

In general

In the case of a qualified joint venture conducted by a husband and wife who file a joint return for the taxable year, for purposes of this title— (A)such joint venture shall not be treated as a partnership, (B)all items of income, gain, loss, deduction, and credit shall be divided between the spouses in accordance with their respective interests in the venture, and (C)each spouse shall take into account such spouse’s respective share of such items as if they were attributable to a trade or business conducted by such spouse as a sole proprietor. (2)

Qualified joint venture

For purposes of paragraph (1), the term qualified joint venture means any joint venture involving the conduct of a trade or business if— (A)the only members of such joint venture are a husband and wife, (B)both spouses materially participate (within the meaning of section 469(h) without regard to paragraph (5) thereof) in such trade or business, and (C)both spouses elect the application of this subsection.. (b)

Net earnings from self-employment

(1)Subsection (a) of section 1402 of such Code (defining net earnings from self-employment) is amended by striking and at the end of paragraph (15), by striking the period at the end of paragraph (16) and inserting ; and, and by inserting after paragraph (16) the following new paragraph: (17)notwithstanding the preceding provisions of this subsection, each spouse’s share of income or loss from a qualified joint venture shall be taken into account as provided in section 761(f) in determining net earnings from self-employment of such spouse.. (2)Subsection (a) of section 211 of the Social Security Act (defining net earnings from self-employment) is amended by striking and at the end of paragraph (15), by striking the period at the end of paragraph (16) and inserting ; and, and by inserting after paragraph (16) the following new paragraph: (17)Notwithstanding the preceding provisions of this subsection, each spouse’s share of income or loss from a qualified joint venture shall be taken into account as provided in section 761(f) of the Internal Revenue Code of 1986 in determining net earnings from self-employment of such spouse.. (c)

Effective date

The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.