I 

114TH CONGRESS 

2D SESSION H. R. 5539 

To amend the Internal Revenue Code of 1986 to exclude from gross income 

contributions to the capital of a partnership, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 21, 2016 

Mr. TIBERI (for himself, Mr. DANNY K. DAVIS of Illinois, and Mr. ROSKAM) 

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 exclude 

from gross income contributions to the capital of a partnership, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Preserving Investment 

5 in Needy Neighborhoods Act’’. 

6 SEC. 2. EXCLUSION OF CONTRIBUTIONS TO CAPITAL OF 

7 PARTNERSHIP. 

8 (a) IN GENERAL.—Subsection (a) of section 118 of 

9 the Internal Revenue Code of 1986 is amended by insertVerDate Sep 11 2014 04:03 Jun 22, 2016 Jkt 059200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H5539.IH H5539

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1 ing before the period at the end the following: ‘‘, and, in 

2 the case of a partnership, gross income shall not include 

3 contributions to the capital of the partnership’’. 

4 (b) BASIS OF PROPERTY CONTRIBUTED TO PART5 NERSHIP.—Section 723 of such Code is amended— 

6 (1) by striking ‘‘The basis of property’’ and in7 serting the following: 

8 ‘‘(a) IN GENERAL.—Except as provided in subsection 

9 (b), the basis of property’’, and 

10 (2) by adding at the end the following new sub11 section: 

12 ‘‘(b) CONTRIBUTIONS TO CAPITAL.— 

13 ‘‘(1) PROPERTY OTHER THAN MONEY.—If prop14 erty other than money— 

15 ‘‘(A) is acquired by a partnership as a con16 tribution to capital, and 

17 ‘‘(B) is not contributed by a partner as 

18 such, 

19 then the basis of such property shall be zero. 

20 ‘‘(2) MONEY.—If money— 

21 ‘‘(A) is received by a partnership as a con22 tribution to capital, and 

23 ‘‘(B) is not contributed by a partner as 

24 such, 


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1 then the basis of any property acquired with such 

2 money during the 12-month period beginning on the 

3 day the contribution is received shall be reduced by 

4 the amount of such contribution. The excess (if any) 

5 of the amount of such contribution over the amount 

6 of the reduction under the preceding sentence shall 

7 be applied to the reduction (as of the last day of the 

8 period specified in the preceding sentence) of the 

9 basis of any other property of the partnership. The 

10 particular properties to which the reductions re11 quired by this paragraph shall be allocated shall be 

12 determined under regulations prescribed by the Sec13 retary.’’. 

14 (c) NO INCREASE IN BASIS OF PARTNER’S INTER15 EST.—Subparagraph (B) of section 705(a)(1) of such 

16 Code is amended by inserting ‘‘(other than amounts ex17 cluded from gross income under section 118)’’ after ‘‘ex18 empt from tax under this title’’. 

19 (d) CONFORMING AMENDMENT.—The heading for 

20 section 118 of such Code is amended by striking ‘‘OF A

21 CORPORATION’’ and inserting ‘‘OF CORPORATIONS

22 AND PARTNERSHIPS’’. 

23 (e) EFFECTIVE DATE.—The amendments made by 

24 this section shall apply to contributions made after the 

25 date of the enactment of this Act. 


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1 (f) NO INFERENCE.—Nothing contained in this sec2 tion or the amendments made by this section shall be con3 strued to create any inference under the Internal Revenue 

4 Code of 1986 with respect to the treatment of contribu5 tions to the capital of partnerships made on or before the 

6 date of the enactment of this Act. 

Æ 


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