[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 4924 Introduced in Senate (IS)]

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118th CONGRESS
  2d Session
                                S. 4924

 To amend the Internal Revenue Code of 1986 to modify the depreciation 
    of nonresidential real property and residential rental property.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             August 1, 2024

   Mr. Braun introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to modify the depreciation 
    of nonresidential real property and residential rental property.

    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 ``Renewing Investment in American 
Workers and Supply Chains Act''.

SEC. 2. MODIFICATION OF DEPRECIATION OF NONRESIDENTIAL REAL PROPERTY 
              AND RESIDENTIAL RENTAL PROPERTY.

    (a) 20-Year Recovery Period.--
            (1) In general.--Section 168(e)(3)(F) of the Internal 
        Revenue Code of 1986 is amended to read as follows:
                    ``(F) 20-year property.--The term `20-year 
                property' means--
                            ``(i) initial clearing and grading land 
                        improvements with respect to any electric 
                        utility transmission and distribution plant,
                            ``(ii) any nonresidential real property, 
                        and
                            ``(iii) any residential rental property.''.
            (2) Bonus depreciation not applicable.--Section 
        168(k)(2)(A)(i)(I) of such Code is amended by inserting 
        ``(other than nonresidential real property and residential 
        rental property)'' before the comma at the end.
            (3) Conforming amendment.--The table contained in section 
        168(c) of such Code is amended--
                    (A) by striking the row relating to residential 
                rental property, and
                    (B) by striking the row relating to nonresidential 
                real property.
    (b) Adjustment of Deduction To Provide Neutral Cost Recovery.--
Section 168 of such Code is amended by adding at the end the following 
new subsection:
    ``(n) Neutral Cost Recovery for Nonresidential Real Property and 
Residential Rental Property.--
            ``(1) In general.--The deduction otherwise provided under 
        section 167(a) with respect to nonresidential real property and 
        residential rental property for any taxable year shall be equal 
        to the product of such amount (determined without regard to 
        this subsection) multiplied by the applicable neutral cost 
        recovery ratio with respect to such property for such taxable 
        year.
            ``(2) Neutral cost recovery ratio.--For purposes of 
        paragraph (1), the term `applicable neutral cost recovery 
        ratio' means, with respect to any property for any taxable 
        year, the product (not less than 1 and rounded to the nearest 
        0.001) of--
                    ``(A) the quotient of--
                            ``(i) the gross domestic product deflator 
                        (as determined by the Bureau of Economic 
                        Analysis) for the calendar quarter ending in 
                        such taxable year which corresponds to the 
                        calendar quarter during which such property was 
                        placed in service by the taxpayer, divided by
                            ``(ii) the gross domestic product deflator 
                        (as determined by the Bureau of Economic 
                        Analysis) for the calendar quarter during which 
                        such property was placed in service by the 
                        taxpayer, multiplied by
                    ``(B) 1.03 to the nth power, where `n' is the 
                number of full years in the period beginning on the 1st 
                day of the calendar quarter during which such property 
                was placed in service by the taxpayer and ending on the 
                day before the beginning of the corresponding calendar 
                quarter ending during such taxable year.
            ``(3) Application to property placed in service before date 
        of enactment.--In the case of nonresidential real property or 
        residential rental property which is placed in service before 
        the date of enactment of this subsection, subparagraphs (A)(i), 
        (A)(ii), and (B) of paragraph (2) shall each be applied by 
        substituting `calendar quarter which includes the date of 
        enactment of this subsection' for `calendar quarter during 
        which such property was placed in service by the taxpayer'.
            ``(4) Additional deduction not to affect basis or 
        recapture.--
                    ``(A) In general.--The additional amount determined 
                under this section by reason of this subsection shall 
                not be taken into account in determining the adjusted 
                basis of any applicable property or of any interest in 
                a pass-thru entity which holds such property and shall 
                not be treated as a deduction for depreciation for 
                purposes of sections 1245 and 1250.
                    ``(B) Pass-thru entity defined.--For purposes of 
                subparagraph (A), the term `pass-thru entity' means--
                            ``(i) a regulated investment company,
                            ``(ii) a real estate investment trust,
                            ``(iii) an S corporation,
                            ``(iv) a partnership,
                            ``(v) an estate or trust, and
                            ``(vi) a common trust fund.''.
    (c) Effective Dates.--
            (1) 20-year recovery period.--The amendments made by 
        subsection (a) shall apply to property placed in service after 
        the date of the enactment of this Act, in taxable years ending 
        after such date.
            (2) Neutral cost recovery.--The amendments made by 
        subsection (b) shall apply to taxable years ending after the 
        date of the enactment of this Act.
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