[Congressional Record Volume 167, Number 138 (Tuesday, August 3, 2021)]
[Senate]
[Pages S5755-S5756]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SA 2384. Mr. DAINES (for himself and Ms. Stabenow) submitted an
amendment intended to be proposed to amendment SA 2137 proposed by Mr.
Schumer (for Ms. Sinema (for herself, Mr. Portman, Mr. Manchin, Mr.
Cassidy, Mrs. Shaheen, Ms. Collins, Mr. Tester, Ms. Murkowski, Mr.
Warner, and Mr. Romney)) to the bill H.R. 3684, to authorize funds for
Federal-aid highways, highway safety programs, and transit programs,
and for other purposes; which was ordered to lie on the table; as
follows:
On page 2438, between lines 12 and 13, insert the
following:
SEC. 80605. LIMITATION ON DEDUCTION FOR QUALIFIED
CONSERVATION CONTRIBUTIONS MADE BY PASS-THROUGH
ENTITIES.
(a) In General.--Section 170(h) of the Internal Revenue
Code of 1986 is amended by adding at the end the following
new paragraph:
``(7) Limitation on deduction for qualified conservation
contributions made by pass-through entities.--
``(A) In general.--A contribution by a partnership (whether
directly or as a distributive share of a contribution of
another partnership) shall not be treated as a qualified
conservation contribution for purposes of this section if the
amount of such contribution exceeds 2.5 times the sum of each
partner's relevant basis in such partnership.
``(B) Relevant basis.--For purposes of this paragraph--
``(i) In general.--The term `relevant basis' means, with
respect to any partner, the portion of such partner's
modified basis in the partnership which is allocable (under
rules similar to the rules of section 755) to the portion of
the real property with respect to which the contribution
described in subparagraph (A) is made.
``(ii) Modified basis.--The term `modified basis' means,
with respect to any partner, such partner's adjusted basis in
the partnership as determined--
``(I) immediately before the contribution described in
subparagraph (A),
``(II) without regard to section 752, and
``(III) by the partnership after taking into account the
adjustments described in subclauses (I) and (II) and such
other adjustments as the Secretary may provide.
``(C) Exception for contributions outside 3-year holding
period.--Subparagraph (A) shall not apply to any contribution
which is made at least 3 years after the latest of--
``(i) the last date on which the partnership that made such
contribution acquired any portion of the real property with
respect to which such contribution is made,
``(ii) the last date on which any partner in the
partnership that made such contribution acquired any interest
in such partnership, and
``(iii) if the interest in the partnership that made such
contribution is held through one or more partnerships--
``(I) the last date on which any such partnership acquired
any interest in any other such partnership, and
``(II) the last date on which any partner in any such
partnership acquired any interest in such partnership.
``(D) Exception for family partnerships.--
``(i) In general.--Subparagraph (A) shall not apply with
respect to any contribution made by any partnership if
substantially all of the partnership interests in such
partnership are held, directly or indirectly, by an
individual and members of the family of such individual.
``(ii) Members of the family.--For purposes of this
subparagraph, the term `members of the family' means, with
respect to any individual--
``(I) the spouse of such individual, and
``(II) any individual who bears a relationship to such
individual which is described in subparagraphs (A) through
(G) of section 152(d)(2).
``(E) Application to other pass-through entities.--Except
as may be otherwise provided by the Secretary, the rules of
this paragraph shall apply to S corporations and other pass-
through entities in the same manner as such rules apply to
partnerships.
``(F) Regulations.--The Secretary shall prescribe such
regulations or other guidance as may be necessary or
appropriate to carry out the purposes of this paragraph,
including regulations or other guidance--
``(i) to require reporting, including reporting related to
tiered partnerships and the modified basis of partners, and
[[Page S5756]]
``(ii) to prevent the avoidance of the purposes of this
paragraph.''.
(b) Application of Accuracy-Related Penalties.--
(1) In general.--Section 6662(b) of the Internal Revenue
Code of 1986 is amended by inserting after paragraph (9) the
following new paragraph:
``(10) Any disallowance of a deduction by reason of section
170(h)(7).''.
(2) Treatment as gross valuation misstatement.--Section
6662(h)(2) of such Code is amended by striking ``and'' at the
end of subparagraph (B), by striking the period at the end of
subparagraph (C) and inserting ``, and'', and by adding at
the end the following new subparagraph:
``(D) any disallowance of a deduction described in
subsection (b)(10).''.
(3) No reasonable cause exception.--Section 6664(c)(2) of
such Code is amended by inserting ``or to any disallowance of
a deduction described in section 6662(b)(10)'' before the
period at the end.
(4) Approval of assessment not required.--Section
6751(b)(2)(A) of such Code is amended by striking
``subsection (b)(9)'' and inserting ``paragraph (9) or (10)
of subsection (b)''.
(c) Application of Statute of Limitations on Assessment and
Collection.--
(1) Extension for certain adjustments made under prior
law.--In the case of any disallowance of a deduction by
reason of section 170(h)(7) of the Internal Revenue Code of
1986 (as added by this section) or any penalty imposed under
section 6662 of such Code with respect to such disallowance,
section 6229(d)(2) of such Code (as in effect before its
repeal) shall be applied by substituting ``2 years'' for ``1
year''.
(2) Extension for listed transactions.--Any contribution
described in section 170(h)(7)(A) of the Internal Revenue
Code of 1986 (as added by this section) shall be treated for
purpose of sections 6501(c)(10) and 6235(c)(6) of such Code
as a transaction specifically identified by the Secretary on
December 23, 2016, as a tax avoidance transaction for
purposes of section 6011 of such Code.
(d) Application to Certain Transactions Disallowed Under
Other Provisions of Law.--In the case of any disallowance of
a deduction under section 170 of the Internal Revenue Code of
1986 with respect a transaction described in Internal Revenue
Service Notice 2017-10 with respect to a taxable year ending
before the date of the enactment of this Act, such
disallowance shall be treated for purposes of section
6662(b)(10) of such Code (as added by this section) and
subsection (c)(1) as being by reason of section 170(h)(7) of
such Code (as added by this section).
(e) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to contributions
made after December 23, 2016, in taxable years ending after
such date.
(2) Certified historic structures.--In the case of
contributions the conservation purpose (as defined in section
170(h)(4) of the Internal Revenue Code of 1986) of which is
the preservation of a certified historic structure (as
defined in section 170(h)(4)(C) of such Code), the amendments
made by this section shall apply to contributions made in
taxable years beginning after December 31, 2018.
(3) No inference.--No inference is intended as to the
appropriate treatment of contributions made in taxable years
ending on or before the date specified in paragraph (1) or
(2), whichever is applicable, or as to any activity not
described in section 170(h)(7) of the Internal Revenue Code
of 1986, as added by this section.
______