[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.
                                 ______