Category: OBBBA Text

(a) Election to treat costs as expenses.—Section 181(a)(1) is amended by striking “qualified film or television production, and any qualified live theatrical production,” and inserting “qualified film or television production, any qualified live theatrical production, and any qualified sound recording production”.

(b) Dollar limitation.—Section 181(a)(2) is amended by adding at the end the following new subparagraph:

“(C) QUALIFIED SOUND RECORDING PRODUCTION.—Paragraph (1) shall not apply to so much of the aggregate cost of any qualified sound recording production, or to so much of the aggregate, cumulative cost of all such qualified sound recording productions in the taxable year, as exceeds $150,000.”.

(c) No other deduction or amortization deduction allowable.—Section 181(b) is amended by striking “qualified film or television production or any qualified live theatrical production” and inserting “qualified film or television production, any qualified live theatrical production, or any qualified sound recording production”.

(d) Election.—Section 181(c)(1) is amended by striking “qualified film or television production or any qualified live theatrical production” and inserting “qualified film or television production, any qualified live theatrical production, or any qualified sound recording production”.

(e) Qualified sound recording production defined.—Section 181 is amended by redesignating subsections (f) and (g) as subsections (g) and (h), respectively, and by inserting after subsection (e) the following new subsection:

“(f) Qualified sound recording production.—For purposes of this section, the term ‘qualified sound recording production’ means a sound recording (as defined in section 101 of title 17, United States Code) produced and recorded in the United States.”.

(f) Application of termination.—Section 181(h), as redesignated by subsection (e), is amended by striking “qualified film and television productions or qualified live theatrical productions” and inserting “qualified film and television productions, qualified live theatrical productions, or qualified sound recording productions”.

(g) Bonus depreciation.—

(1) QUALIFIED SOUND RECORDING PRODUCTION AS QUALIFIED PROPERTY.—Section 168(k)(2)(A)(i) is amended—

(A) by striking “or” at the end of subclause (IV), by inserting “or” at the end of subclause (V), and by inserting after subclause (V) the following:

“(VI) which is a qualified sound recording production (as defined in subsection (f) of section 181) for which a deduction would have been allowable under section 181 without regard to subsections (a)(2) and (h) of such section or this subsection, and”, and

(B) in subclauses (IV) and (V) (as so amended) by striking “without regard to subsections (a)(2) and (g)” both places it appears and inserting “without regard to subsections (a)(2) and (h)”.

(2) PRODUCTION PLACED IN SERVICE.—Section 168(k)(2)(H) is amended by striking “and” at the end of clause (i), by striking the period at the end of clause (ii) and inserting “, and”, and by adding after clause (ii) the following:

“(iii) a qualified sound recording production shall be considered to be placed in service at the time of initial release or broadcast.”.

(h) Conforming amendments.—

(1) The heading for section 181 is amended to read as follows: “treatment of certain qualified productions.”.

(2) The table of sections for part VI of subchapter B of chapter 1 is amended by striking the item relating to section 181 and inserting the following new item:

“Sec. 181. Treatment of certain qualified productions. ”.

(i) Effective date.—The amendments made by this section shall apply to productions commencing in taxable years ending after the date of the enactment of this Act.

(a) Reinstatement of exception for de minimis payments as in effect prior to enactment of American Rescue Plan Act of 2021.—

(1) IN GENERAL.—Section 6050W(e) is amended to read as follows:

“(e) Exception for de minimis payments by third party settlement organizations.—A third party settlement organization shall be required to report any information under subsection (a) with respect to third party network transactions of any participating payee only if—

“(1) the amount which would otherwise be reported under subsection (a)(2) with respect to such transactions exceeds $20,000, and

“(2) the aggregate number of such transactions exceeds 200.”.

(2) EFFECTIVE DATE.—The amendment made by this subsection shall take effect as if included in section 9674 of the American Rescue Plan Act.

(b) Application of de minimis rule for third party network transactions to backup withholding.—

(1) IN GENERAL.—Section 3406(b) is amended by adding at the end the following new paragraph:

“(8) OTHER REPORTABLE PAYMENTS INCLUDE PAYMENTS IN SETTLEMENT OF THIRD PARTY NETWORK TRANSACTIONS ONLY WHERE AGGREGATE TRANSACTIONS EXCEED REPORTING THRESHOLD FOR THE CALENDAR YEAR.—

“(A) IN GENERAL.—Any payment in settlement of a third party network transaction required to be shown on a return required under section 6050W which is made during any calendar year shall be treated as a reportable payment only if—

“(i) the aggregate number of transactions with respect to the participating payee during such calendar year exceeds the number of transactions specified in section 6050W(e)(2), and

“(ii) the aggregate amount of transactions with respect to the participating payee during such calendar year exceeds the dollar amount specified in section 6050W(e)(1) at the time of such payment.

“(B) EXCEPTION IF THIRD PARTY NETWORK TRANSACTIONS MADE IN PRIOR YEAR WERE REPORTABLE.—Subparagraph (A) shall not apply with respect to payments to any participating payee during any calendar year if one or more payments in settlement of third party network transactions made by the payor to the participating payee during the preceding calendar year were reportable payments.”.

(2) EFFECTIVE DATE.—The amendment made by this subsection shall apply to calendar years beginning after December 31, 2024.

(a) In general.—Section 6041(a) is amended by striking “$600” and inserting “$2,000”.

(b) Inflation adjustment.—Section 6041 is amended by adding at the end the following new subsection:

“(h) Inflation adjustment.—In the case of any calendar year after 2026, the dollar amount in subsection (a) shall be increased by an amount equal to—

“(1) such dollar amount, multiplied by

“(2) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year, determined by substituting ‘calendar year 2025’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.

If any increase under the preceding sentence is not a multiple of $100, such increase shall be rounded to the nearest multiple of $100.”.

(c) Application to reporting on remuneration for services.—Section 6041A(a)(2) is amended by striking “is $600 or more” and inserting “equals or exceeds the dollar amount in effect for such calendar year under section 6041(a)”.

(d) Application to backup withholding.—Section 3406(b)(6) is amended—

(1) by striking “$600” in subparagraph (A) and inserting “the dollar amount in effect for such calendar year under section 6041(a)”, and

(2) by striking “only where aggregate for calendar year is $600 or more” in the heading and inserting “only where in excess of threshold”.

(e) Conforming amendments.—

(1) The heading of section 6041(a) is amended by striking “of $600 or more” and inserting “exceeding threshold”.

(2) Section 6041(a) is amended by striking “taxable year” and inserting “calendar year”.

(f) Effective date.—The amendments made by this section shall apply with respect to payments made after December 31, 2025.

(a) In general.—Section 460(e) is amended—

(1) in paragraph (1)—

(A) by striking “home construction contract” both places it appears and inserting “residential construction contract”, and

(B) by inserting “(determined by substituting ‘3-year’ for ‘2-year’ in subparagraph (B)(i) for any residential construction contract which is not a home construction contract)” after “the requirements of clauses (i) and (ii) of subparagraph (B)”,

(2) by striking paragraph (4) and redesignating paragraph (5) as paragraph (4), and

(3) in subparagraph (A) of paragraph (4), as so redesignated, by striking “paragraph (4)” and inserting “paragraph (3)”.

(b) Application of exception for purposes of alternative minimum tax.—Section 56(a)(3) is amended by striking “any home construction contract (as defined in section 460(e)(6))” and inserting “any residential construction contract (as defined in section 460(e)(4))”.

(c) Effective date.—The amendments made by this section shall apply to contracts entered into in taxable years beginning after the date of the enactment of this Act.

(a) Phased increase in exclusion for gain from qualified small business stock.—

(1) IN GENERAL.—Section 1202(a)(1) is amended to read as follows:

“(1) IN GENERAL.— In the case of a taxpayer other than a corporation, gross income shall not include—

“(A) except as provided in paragraphs (3) and (4), 50 percent of any gain from the sale or exchange of qualified small business stock acquired on or before the applicable date and held for more than 5 years, and

“(B) the applicable percentage of any gain from the sale or exchange of qualified small business stock acquired after the applicable date and held for at least 3 years.”.

(2) APPLICABLE PERCENTAGE.—Section 1202(a) is amended by adding at the end the following new paragraph:

“(5) APPLICABLE PERCENTAGE.—The applicable percentage under paragraph (1) shall be determined under the following table:

(3) APPLICABLE DATE; ACQUISITION DATE.—Section 1202(a), as amended by paragraph (2), is amended by adding at the end the following new paragraph:

“(6) APPLICABLE DATE; ACQUISITION DATE.—For purposes of this section—

“(A) APPLICABLE DATE.—The term ‘applicable date’ means the date of the enactment of this paragraph.

“(B) ACQUISITION DATE.—In the case of any stock which would (but for this paragraph) be treated as having been acquired before, on, or after the applicable date, whichever is applicable, the acquisition date for purposes of this section shall be the first day on which such stock was held by the taxpayer determined after the application of section 1223.”.

(4) CONTINUED TREATMENT AS NOT ITEM OF TAX PREFERENCE.—

(A) IN GENERAL.—Section 57(a)(7) is amended by striking “An amount” and inserting “In the case of stock acquired on or before the date of the enactment of the Creating Small Business Jobs Act of 2010, an amount”.

(B) CONFORMING AMENDMENT.—Section 1202(a)(4) is amended—

(i) by striking “, and” at the end of subparagraph (B) and inserting a period, and

(ii) by striking subparagraph (C).

(5) OTHER CONFORMING AMENDMENTS.—

(A) Paragraphs (3)(A) and (4)(A) of section 1202(a) are each amended by striking “paragraph (1)” and inserting “paragraph (1)(A)”.

(B) Paragraph (4)(A) of section 1202(a) is amended by inserting “and on or before the applicable date” after “2010”.

(C) Sections 1202(b)(2), 1202(g)(2)(A), and 1202(j)(1)(A) are each amended by striking “more than 5 years” and inserting “at least 3 years (more than 5 years in the case of stock acquired on or before the applicable date)”.

(6) EFFECTIVE DATES.—

(A) IN GENERAL.—Except as provided in subparagraph (B), the amendments made by this subsection shall apply to taxable years beginning after the date of the enactment of this Act.

(B) CONTINUED TREATMENT AS NOT ITEM OF TAX PREFERENCE.—The amendments made by paragraph (4) shall take effect as if included in the enactment of section 2011 of the Creating Small Business Jobs Act of 2010.

(b) Increase in per issuer limitation.—

(1) IN GENERAL.—Subparagraph (A) of section 1202(b)(1) is amended to read as follows:

“(A) the applicable dollar limit for the taxable year, or”.

(2) APPLICABLE DOLLAR LIMIT.—Section 1202 (b) is amended by adding at the end the following:

“(4) APPLICABLE DOLLAR LIMIT.—For purposes of paragraph (1)(A), the applicable dollar limit for any taxable year with respect to eligible gain from 1 or more dispositions by a taxpayer of qualified business stock of a corporation is—

“(A) if such stock was acquired by the taxpayer on or before the applicable date, $10,000,000, reduced by the aggregate amount of eligible gain taken into account by the taxpayer under subsection (a) for prior taxable years and attributable to dispositions of stock issued by such corporation and acquired by the taxpayer before, on, or after the applicable date, and

“(B) if such stock was acquired by the taxpayer after the applicable date, $15,000,000, reduced by the sum of—

“(i) the aggregate amount of eligible gain taken into account by the taxpayer under subsection (a) for prior taxable years and attributable to dispositions of stock issued by such corporation and acquired by the taxpayer before, on, or after the applicable date, plus

“(ii) the aggregate amount of eligible gain taken into account by the taxpayer under subsection (a) for the taxable year and attributable to dispositions of stock issued by such corporation and acquired by the taxpayer on or before the applicable date.

“(5) INFLATION ADJUSTMENT.—

“(A) IN GENERAL.—In the case of any taxable year beginning after 2026, the $15,000,000 amount in paragraph (4)(B) shall be increased by an amount equal to —

“(i) such dollar amount, multiplied by

“(ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2025’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.

If any increase under this subparagraph is not a multiple of $10,000, such increase shall be rounded to the nearest multiple of $10,000.

“(B) NO INCREASE ONCE LIMIT REACHED.—If, for any taxable year, the eligible gain attributable to dispositions of stock issued by a corporation and acquired by the taxpayer after the applicable date exceeds the applicable dollar limit, then notwithstanding any increase under subparagraph (A) for any subsequent taxable year, the applicable dollar limit for such subsequent taxable year shall be zero.”.

(3) SEPARATE RETURNS.—Subparagraph (A) of section 1202(b)(3) is amended to read as follows:

“(A) SEPARATE RETURNS.—In the case of a separate return by a married individual for any taxable year—

“(i) paragraph (4)(A) shall be applied by substituting ‘$5,000,000’ for ‘$10,000,000’, and

“(ii) paragraph (4)(B) shall be applied by substituting one-half of the dollar amount in effect under such paragraph for the taxable year for the amount so in effect.”.

(4) EFFECTIVE DATE.—The amendments made by this subsection shall apply to taxable years beginning after the date of the enactment of this Act.

(c) Increase in limit in aggregate gross assets.—

(1) IN GENERAL.—Subparagraphs (A) and (B) of section 1202(d)(1) are each amended by striking “$50,000,000” and inserting “$75,000,000”.

(2) INFLATION ADJUSTMENT.—Section 1202(b) is amended by adding at the end the following:

“(4) INFLATION ADJUSTMENT.—In the case of any taxable year beginning after 2026, the $75,000,000 amounts in paragraphs (1)(A) and (1)(B) shall each be increased by an amount equal to—

“(A) such dollar amount, multiplied by

“(B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2025’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.

If any increase under this paragraph is not a multiple of $10,000, such increase shall be rounded to the nearest multiple of $10,000.”.

(3) EFFECTIVE DATE.—The amendments made by this subsection shall apply to stock issued after the date of the enactment of this Act

(a) In general.—Section 170(n)(1) of the Internal Revenue Code of 1986 is amended by striking “$10,000” and inserting “$50,000”.

(b) Effective date.—The amendments made by this section shall apply to taxable years beginning after December 31, 2025.

(a) In general.—For purposes of subchapter F of chapter 1 of the Internal Revenue Code of 1986, any activity substantially related to participation or investment in fisheries in the Bering Sea and Aleutian Islands statistical and reporting areas (as described in Figure 1 of section 679 of title 50, Code of Federal Regulations) carried on by an entity identified in section 305(i)(1)(D) of the Magnuson-Stevens Fishery Conservation and Management Act (16 U.S.C. 1855(i)(1)(D)) (as in effect on the date of enactment of this section) shall be considered substantially related to the exercise or performance of the purpose constituting the basis of such entity’s exemption under section 501(a) of such Code if the conduct of such activity is in furtherance of 1 or more of the purposes specified in section 305(i)(1)(A) of such Act (as so in effect). For purposes of this paragraph, activities substantially related to participation or investment in fisheries include the harvesting, processing, transportation, sales, and marketing of fish and fish products of the Bering Sea and Aleutian Islands statistical and reporting areas.

(b) Application to certain wholly owned subsidiaries.—If the assets of a trade or business relating to an activity described in subsection (a) of any subsidiary wholly owned by an entity identified in section 305(i)(1)(D) of the Magnuson-Stevens Fishery Conservation and Management Act (16 U.S.C. 1855(i)(1)(D)) (as in effect on the date of enactment of this section) are transferred to such entity (including in liquidation of such subsidiary) not later than 18 months after the date of the enactment of this Act—

(1) no gain or income resulting from such transfer shall be recognized to either such subsidiary or such entity under such Code, and

(2) all income derived from such subsidiary from such transferred trade or business shall be exempt from taxation under such Code.

(c) Effective date.—This section shall take effect on the date of the enactment of this Act and shall remain effective during the existence of the western Alaska community development quota program established by Section 305(i)(1) of the Magnuson-Stevens Fishery Conservation and Management Act (16 U.S.C. 1855(i)(1)), as amended.

(a) In general.—Paragraph (1) of section 7652(f) is amended to read as follows:

“(1) $13.25, or”.

(b) Effective date.—The amendment made by this section shall apply to distilled spirits brought into the United States after December 31, 2025.

(a) In general.—Section 170(b)(2)(A) is amended to read as follows:

“(A) IN GENERAL.—Any charitable contribution otherwise allowable (without regard to this subparagraph) as a deduction under this section for any taxable year, other than any contribution to which subparagraph (B) or (C) applies, shall be allowed only to the extent that the aggregate of such contributions—

“(i) exceeds 1 percent of the taxpayer’s taxable income for the taxable year, and

“(ii) does not exceed 10 percent of the taxpayer’s taxable income for the taxable year.”.

(b) Application of carryforward.—Section 170(d)(2) is amended to read as follows:

“(2) CORPORATIONS.—

“(A) IN GENERAL.—Any charitable contribution taken into account under subsection (b)(2)(A) for any taxable year which is not allowed as a deduction by reason of clause (ii) thereof shall be taken into account as a charitable contribution for the succeeding taxable year, except that, for purposes of determining under this subparagraph whether such contribution is allowed in such succeeding taxable year, contributions in such succeeding taxable year (determined without regard to this paragraph) shall be taken into account under subsection (b)(2)(A) before any contribution taken into account by reason of this paragraph.

“(B) 5-YEAR CARRYFORWARD.—No charitable contribution may be carried forward under subparagraph (A) to any taxable year following the fifth taxable year after the taxable year in which the charitable contribution was first taken into account. For purposes of the preceding sentence, contributions shall be treated as allowed on a first-in first-out basis.

“(C) CONTRIBUTIONS DISALLOWED BY 1-PERCENT FLOOR CARRIED FORWARD ONLY FROM YEARS IN WHICH 10 PERCENT LIMITATION IS EXCEEDED.—In the case of any taxable year from which a charitable contribution is carried forward under subparagraph (A) (determined without regard this subparagraph), subparagraph (A) shall be applied by substituting ‘clause (i) or (ii)’ for ‘clause (ii)’.

“(D) SPECIAL RULE FOR NET OPERATING LOSS CARRYOVERS.—The amount of charitable contributions carried forward under subparagraph (A) shall be reduced to the extent that such carryfoward would (but for this subparagraph) reduce taxable income (as computed for purposes of the second sentence of section 172(b)(2)) and increase a net operating loss carryover under section 172 to a succeeding taxable year.”.

(c) Conforming amendments.—Subparagraphs (B)(ii) and (C)(ii) of section 170(b)(2) are each amended by inserting “other than subparagraph (C) thereof” after “subsection (d)(2)”.

(d) Effective date.—The amendments made by this section shall apply to taxable years beginning after December 31, 2025.

(a) In general.—Section 170(p) is amended—

(1) by striking “$300 ($600” and inserting “$1,000 ($2,000”, and

(2) by striking “beginning in 2021”.

(b) Effective date.—The amendments made by this section shall apply to taxable years beginning after December 31, 2025.