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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2284 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 2284

  To amend the Internal Revenue Code of 1986 to allow individuals to 
   defer tax on income reinvested in a partnership or S corporation.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                              May 6, 2009

 Mr. Paulsen 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 individuals to 
   defer tax on income reinvested in a partnership or S corporation.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. DEFERRAL OF TAX ON INCOME REINVESTED IN A PARTNERSHIP OR S 
              CORPORATION.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by inserting after section 
139C the following new section:

``SEC. 139D. INCOME REINVESTED IN A PARTNERSHIP OR S CORPORATION.

    ``(a) Exclusion From Gross Income of Pass-Thru Income.--
            ``(1) In general.--In the case of an individual, gross 
        income shall not include--
                    ``(A) any specified item of partnership pass-thru 
                income, and
                    ``(B) any specified item of S corporation pass-thru 
                income.
            ``(2) Limitation.--The aggregate amount of items which may 
        be designated by the taxpayer as specified items under 
        paragraphs (3)(B) and (4)(B) with respect to any taxable year 
        shall not exceed $250,000 ($500,000 in the case of a joint 
        return).
            ``(3) Specified item of partnership pass-thru income.--For 
        purposes of this section, the term `specified item of 
        partnership pass-thru income' means, with respect to any 
        taxable year, any item of income or gain which--
                    ``(A) would, but for this section, be taken into 
                account by the taxpayer under section 702 for such 
                taxable year, and
                    ``(B) is designated by the taxpayer as a specified 
                item for purposes of this section.
            ``(4) Specified item of s corporation pass-thru income.--
        For purposes of this section, the term `specified item of S 
        corporation pass-thru income' means, with respect to any 
        taxable year, any item of income or gain which--
                    ``(A) would, but for this section, be taken into 
                account by the taxpayer under section 1366 for such 
                taxable year, and
                    ``(B) is designated by the taxpayer as a specified 
                item for purposes of this section.
    ``(b) No Increase in Adjusted Basis With Respect to Items Excluded 
From Gross Income.--Any specified item which is not includible in the 
gross income of an individual under subsection (a) shall not be taken 
into account in determining the adjusted basis of such individual's 
interest in the partnership or S corporation with respect to which such 
item relates.
    ``(c) Regulations.--The Secretary shall prescribe such regulations 
or other guidance as may be necessary or appropriate to carry out the 
purposes of this section.''.
    (b) Clerical Amendment.--The table of sections for part III of 
subchapter B of chapter 1 of the Internal Revenue Code of 1986 is 
amended by inserting after the item relating to section 139C the 
following new item:

``Sec. 139D. Income held in a partnership or S corporation.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
                                 <all>
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