† HR 1 EAS 
(2) 
LIMITATION.—Section 
529(e)(3)(A) 
is 
amended by adding at the end the following: ‘‘The 
amount of cash distributions from all qualified tui-
tion programs described in subsection (b)(1)(A)(ii) 
with respect to a beneficiary during any taxable year 
shall, in the aggregate, include not more than $10,000 
in expenses described in subsection (c)(7) incurred 
during the taxable year.’’. 
(b) EFFECTIVE DATE.—The amendments made by sub-
section (a) shall apply to contributions made after Decem-
ber 31, 2017. 
(c) OFFSET.— 
(1) MODIFICATION
OF
RULES
RELATING
TO 
HARDSHIP WITHDRAWALS FROM CASH OR DEFERRED 
ARRANGEMENTS.—Section 401(k) is amended by add-
ing at the end the following: 
‘‘(14) SPECIAL RULES RELATING TO HARDSHIP 
WITHDRAWALS.—For 
purposes 
of 
paragraph 
(2)(B)(i)(IV)— 
‘‘(A) AMOUNTS
WHICH
MAY
BE
WITH-
DRAWN.—The following amounts may be distrib-
uted upon hardship of the employee: 
‘‘(i) Contributions to a profit-sharing 
or stock bonus plan to which section 
402(e)(3) applies.
† HR 1 EAS 
‘‘(ii) Qualified nonelective contribu-
tions (as defined in subsection (m)(4)(C)). 
‘‘(iii) Qualified matching contributions 
described in paragraph (3)(D)(ii)(I). 
‘‘(iv) Earnings on any contributions 
described in clause (i), (ii), or (iii). 
‘‘(B) NO
REQUIREMENT
TO
TAKE
AVAIL-
ABLE LOAN.—A distribution shall not be treated 
as failing to be made upon the hardship of an 
employee solely because the employee does not 
take any available loan under the plan.’’.’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
401(k)(2)(B)(i)(IV) is amended to read as follows: 
‘‘(IV) subject to the provisions of 
paragraph (14), upon hardship of the 
employee, or’’.’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to plan years beginning 
after December 31, 2017. 
PART V—DEDUCTIONS AND EXCLUSIONS 
SEC. 11041. SUSPENSION OF DEDUCTION FOR PERSONAL 
EXEMPTIONS. 
(a) IN GENERAL.—Subsection (d) of section 151 is 
amended—
† HR 1 EAS 
(1) by striking ‘‘In the case of’’ in paragraph (4) 
and inserting ‘‘Except as provided in paragraph (5), 
in the case of’’, and 
(2) by adding at the end the following new para-
graph: 
‘‘(5) SPECIAL RULES FOR TAXABLE YEARS 2018 
THROUGH 2025.—In the case of a taxable year begin-
ning after December 31, 2017, and before January 1, 
2026— 
‘‘(A) EXEMPTION AMOUNT.—The term ‘ex-
emption amount’ means zero. 
‘‘(B) REFERENCES.—For purposes of any 
other provision of this title, the reduction of the 
exemption amount to zero under subparagraph 
(A) shall not be taken into account in deter-
mining whether a deduction is allowed or allow-
able, or whether a taxpayer is entitled to a de-
duction, under this section.’’. 
(b) APPLICATION TO ESTATES AND TRUSTS.—Section 
642(b)(2)(C) is amended by adding at the end the following 
new clause: 
‘‘(iii) YEARS WHEN PERSONAL EXEMP-
TION AMOUNT IS ZERO.— 
‘‘(I) IN GENERAL.—In the case of 
any taxable year in which the exemp-
† HR 1 EAS 
tion amount under section 151(d) is 
zero, clause (i) shall be applied by sub-
stituting ‘$4,150’ for ‘the exemption 
amount under section 151(d)’. 
‘‘(II) INFLATION ADJUSTMENT.— 
In the case of any calendar year begin-
ning after 2018, the $4,150 amount in 
subparagraph (A) shall be increased by 
an amount equal to— 
‘‘(aa) such dollar amount, 
multiplied by 
‘‘(bb) the cost-of-living ad-
justment determined under section 
1(f)(3) for the calendar year in 
which the taxable year begins, de-
termined by substituting ‘2017’ 
for ‘2016’ in subparagraph (A)(ii) 
thereof. 
If any increase determined under the 
preceding sentence is not a multiple of 
$100, such increase shall be rounded to 
the next lowest multiple of $100.’’. 
(c) EXCEPTION FOR WAGE WITHHOLDING RULES.— 
Section 3402(a) is amended by adding at the end the fol-
lowing new paragraph:
† HR 1 EAS 
‘‘(3) 
YEARS
WHEN
PERSONAL
EXEMPTION 
AMOUNT IS ZERO.— 
‘‘(A) IN GENERAL.—In the case of any tax-
able year in which the exemption amount under 
section 151(d) is zero, paragraph (2) shall be ap-
plied by substituting ‘$4,150’ for ‘the amount of 
one personal exemption provided in section 
151(b)’. 
‘‘(B) INFLATION ADJUSTMENT.—In the case 
of any calendar year beginning after 2018, the 
$4,150 amount in subparagraph (A) shall be in-
creased by an amount equal to— 
‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the cost-of-living adjustment de-
termined under section 1(f)(3) for the cal-
endar year in which the taxable year be-
gins, determined by substituting ‘2017’ for 
‘2016’ in subparagraph (A)(ii) thereof. 
If any increase determined under the preceding 
sentence is not a multiple of $100, such increase 
shall be rounded to the next lowest multiple of 
$100.’’. 
(d) EXCEPTION
FOR DETERMINING PROPERTY EX-
EMPT FROM LEVY.—Section 6334(d) is amended by adding 
at the end the following new paragraph:
† HR 1 EAS 
‘‘(4) 
YEARS
WHEN
PERSONAL
EXEMPTION 
AMOUNT IS ZERO.— 
‘‘(A) IN GENERAL.—In the case of any tax-
able year in which the exemption amount under 
section 151(d) is zero, paragraph (2) shall not 
apply and for purposes of paragraph (1) the 
term ‘exempt amount’ means an amount equal 
to— 
‘‘(i) the sum of the amount determined 
under subparagraph (B) and the standard 
deduction, divided by 
‘‘(ii) 52. 
‘‘(B) AMOUNT DETERMINED.—For purposes 
of subparagraph (A), the amount determined 
under this subparagraph is $4,150 multiplied by 
the number of the taxpayer’s dependents for the 
taxable year in which the levy occurs. 
‘‘(C) INFLATION ADJUSTMENT.—In the case 
of any taxable year beginning after 2018, the 
$4,150 amount in subparagraph (B) shall be in-
creased by an amount equal to— 
‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the cost-of-living adjustment de-
termined under section 1(f)(3) for the cal-
endar year in which the taxable year be-
† HR 1 EAS 
gins, determined by substituting ‘2017’ for 
‘2016’ in subparagraph (A)(ii) thereof. 
If any increase determined under the preceding 
sentence is not a multiple of $100, such increase 
shall be rounded to the next lowest multiple of 
$100. 
‘‘(D) VERIFIED
STATEMENT.—Unless the 
taxpayer submits to the Secretary a written and 
properly verified statement specifying the facts 
necessary to determine the proper amount under 
subparagraph (A), subparagraph (A) shall be ap-
plied as if the taxpayer were a married indi-
vidual filing a separate return with no depend-
ents.’’. 
(e) PERSONS REQUIRED TO MAKE RETURNS OF IN-
COME.—Section 6012 is amended by adding at the end the 
following new subsection: 
‘‘(f) SPECIAL
RULE
FOR
TAXABLE
YEARS
2018 
THROUGH 2025.—In the case of a taxable year beginning 
after December 31, 2017, and before January 1, 2026, sub-
section (a)(1) shall not apply, and every individual who 
has gross income for the taxable year shall be required to 
make returns with respect to income taxes under subtitle 
A, except that a return shall not be required of—
† HR 1 EAS 
‘‘(1) an individual who is not married (deter-
mined by applying section 7703) and who has gross 
income for the taxable year which does not exceed the 
standard deduction applicable to such individual for 
such taxable year under section 63, or 
‘‘(2) an individual entitled to make a joint re-
turn if— 
‘‘(A) the gross income of such individual, 
when combined with the gross income of such in-
dividual’s spouse, for the taxable year does not 
exceed the standard deduction which would be 
applicable to the taxpayer for such taxable year 
under section 63 if such individual and such in-
dividual’s spouse made a joint return, 
‘‘(B) such individual and such individual’s 
spouse have the same household as their home at 
the close of the taxable year, 
‘‘(C) such individual’s spouse does not make 
a separate return, and 
‘‘(D) neither such individual nor such indi-
vidual’s spouse is an individual described in sec-
tion 63(c)(5) who has income (other than earned 
income) in excess of the amount in effect under 
section 63(c)(5)(A).’’.
† HR 1 EAS 
(f) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2017. 
SEC. 11042. SUSPENSION OF DEDUCTION FOR STATE AND 
LOCAL, ETC. TAXES. 
(a) IN GENERAL.—Subsection (b) of section 164 is 
amended by adding at the end the following new paragraph: 
‘‘(6) SUSPENSION OF INDIVIDUAL DEDUCTIONS 
FOR TAXABLE YEARS 2018 THROUGH 2025.—In the case 
of an individual and a taxable year beginning after 
December 31, 2017, and before January 1, 2026— 
‘‘(A) foreign real property taxes (other than 
taxes which are paid or accrued in carrying on 
a trade or business or an activity described in 
section 212) shall not be taken into account 
under subsection (a)(1), 
‘‘(B) the aggregate amount of taxes (other 
than taxes which are paid or accrued in car-
rying on a trade or business or an activity de-
scribed in section 212) taken into account under 
subsection (a)(1) for any taxable year shall not 
exceed $10,000 ($5,000 in the case of a married 
individual filing a separate return), 
‘‘(C) subsection (a)(2) shall only apply to 
taxes which are paid or accrued in carrying on
† HR 1 EAS 
a trade or business or an activity described in 
section 212, 
‘‘(D) subsection (a)(3) shall not apply to 
State and local taxes, and 
‘‘(E) paragraph (5) shall not apply.’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2017. 
SEC. 11043. SUSPENSION OF DEDUCTION FOR HOME EQ-
UITY INTEREST. 
(a) IN GENERAL.—Section 163(h)(3)(A)(ii) is amend-
ed by inserting ‘‘in the case of taxable years beginning be-
fore January 1, 2018, or after December 31, 2025,’’ before 
‘‘home equity indebtedness’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to taxable years ending after December 
31, 2017. 
SEC. 11044. MODIFICATION OF DEDUCTION FOR PERSONAL 
CASUALTY LOSSES. 
(a) IN GENERAL.—Subsection (h) of section 165 is 
amended by adding at the end the following new paragraph: 
‘‘(5) LIMITATION
FOR
TAXABLE
YEARS
2018 
THROUGH 2025.—In the case of an individual, any 
loss described in subsection (c)(3) which (but for this 
paragraph) would be deductible in a taxable year be-
† HR 1 EAS 
ginning after December 31, 2017, and before January 
1, 2026, shall be allowed only to the extent it is at-
tributable to a Federally declared disaster (as defined 
in subsection (i)(5)). The preceding sentence shall not 
apply to any deduction under section 172 which is 
carried to such a taxable year from a taxable year be-
ginning before January 1, 2018.’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to losses incurred in taxable years begin-
ning after December 31, 2017. 
SEC. 11045. SUSPENSION OF MISCELLANEOUS ITEMIZED 
DEDUCTIONS. 
(a) IN GENERAL.—Section 67 is amended by adding 
at the end the following new subsection: 
‘‘(g) 
SUSPENSION
FOR
TAXABLE
YEARS
2018 
THROUGH 2025.—Notwithstanding subsection (a), no mis-
cellaneous itemized deduction shall be allowed for any tax-
able year beginning after December 31, 2017, and before 
January 1, 2026.’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2017.
† HR 1 EAS 
SEC. 11046. SUSPENSION OF OVERALL LIMITATION ON 
ITEMIZED DEDUCTIONS. 
(a) IN GENERAL.—Section 68 is amended by adding 
at the end the following new subsection: 
‘‘(f) SECTION NOT TO APPLY.—This section shall not 
apply to any taxable year beginning after December 31, 
2017, and before January 1, 2026.’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2017. 
SEC. 11047. MODIFICATION OF EXCLUSION OF GAIN FROM 
SALE OF PRINCIPAL RESIDENCE. 
(a) IN GENERAL.—Section 121 is amended by adding 
at the end the following new subsection: 
‘‘(h) SPECIAL RULES FOR SALES OR EXCHANGES IN 
TAXABLE YEARS 2018 THROUGH 2025.— 
‘‘(1) IN
GENERAL.—In applying this section 
with respect to sales or exchanges after December 31, 
2017, and before January 1, 2026— 
‘‘(A) ‘8-year’ shall be substituted for ‘5-year’ 
each place it appears in subsections (a), 
(b)(5)(C)(ii)(I), and (c)(1)(B)(i)(I) and para-
graphs (7), (9), (10), and (12) of subsection (d), 
‘‘(B) ‘5 years’ shall be substituted for ‘2 
years’ each place it appears in subsections (a),
† HR 1 EAS 
(b)(3), 
(b)(4), 
(b)(5)(C)(ii)(III), 
and 
(c)(1)(B)(ii), and 
‘‘(C) ‘5-year’ shall be substituted for ‘2-year’ 
in subsection (b)(3). 
‘‘(2) EXCEPTION
FOR
BINDING
CONTRACTS.— 
Paragraph (1) shall not apply to any sale or ex-
change with respect to which there was a written 
binding contract in effect before January 1, 2018, and 
at all times thereafter before the sale or exchange.’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to sales and exchanges after December 
31, 2017. 
SEC. 11048. SUSPENSION OF EXCLUSION FOR QUALIFIED BI-
CYCLE COMMUTING REIMBURSEMENT. 
(a) IN GENERAL.—Section 132(f) is amended by add-
ing at the end the following new paragraph: 
‘‘(8) SUSPENSION OF QUALIFIED BICYCLE COM-
MUTING
REIMBURSEMENT
EXCLUSION.—Paragraph 
(1)(D) shall not apply to any taxable year beginning 
after December 31, 2017, and before January 1, 
2026.’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2017.
† HR 1 EAS 
SEC. 11049. SUSPENSION OF EXCLUSION FOR QUALIFIED 
MOVING EXPENSE REIMBURSEMENT. 
(a) IN GENERAL.—Section 132(g) is amended— 
(1) by striking ‘‘For purposes of this section, the 
term’’ and inserting ‘‘For purposes of this section— 
‘‘(1) IN GENERAL.—The term’’, and 
(2) by adding at the end the following new para-
graph: 
‘‘(2) SUSPENSION
FOR
TAXABLE
YEARS
2018 
THROUGH 2025.—Except in the case of a member of 
the Armed Forces of the United States on active duty 
who moves pursuant to a military order and incident 
to a permanent change of station, subsection (a)(6) 
shall not apply to any taxable year beginning after 
December 31, 2017, and before January 1, 2026.’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2017. 
SEC. 11050. SUSPENSION OF DEDUCTION FOR MOVING EX-
PENSES. 
(a) IN GENERAL.—Section 217 is amended by adding 
at the end the following new subsection: 
‘‘(k) SUSPENSION
OF
DEDUCTION
FOR
TAXABLE 
YEARS 2018 THROUGH 2025.—Except in the case of an in-
dividual to whom subsection (g) applies, this section shall
† HR 1 EAS 
not apply to any taxable year beginning after December 
31, 2017, and before January 1, 2026.’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2017. 
SEC. 11051. LIMITATION ON WAGERING LOSSES. 
(a) IN GENERAL.—Section 165(d) is amended by add-
ing at the end the following: ‘‘For purposes of the preceding 
sentence, in the case of taxable years beginning after Decem-
ber 31, 2017, and before January 1, 2026, the term ‘losses 
from wagering transactions’ includes any deduction other-
wise allowable under this chapter incurred in carrying on 
any wagering transaction.’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2017. 
PART VI—INCREASE IN ESTATE AND GIFT TAX 
EXEMPTION 
SEC. 11061. INCREASE IN ESTATE AND GIFT TAX EXEMP-
TION. 
(a) IN GENERAL.—Section 2010(c)(3) is amended by 
adding at the end the following new subparagraph: 
‘‘(C) 
INCREASE
IN
BASIC
EXCLUSION 
AMOUNT.—In the case of estates of decedents 
dying or gifts made after December 31, 2017,
† HR 1 EAS 
and before January 1, 2026, subparagraph (A) 
shall be applied by substituting ‘$10,000,000’ for 
‘$5,000,000’.’’. 
(b) CONFORMING AMENDMENT.—Subsection (g) of sec-
tion 2001 is amended to read as follows: 
‘‘(g) MODIFICATIONS TO TAX PAYABLE.— 
‘‘(1) MODIFICATIONS TO GIFT TAX PAYABLE TO 
REFLECT DIFFERENT TAX RATES.—For purposes of 
applying subsection (b)(2) with respect to 1 or more 
gifts, the rates of tax under subsection (c) in effect at 
the decedent’s death shall, in lieu of the rates of tax 
in effect at the time of such gifts, be used both to com-
pute— 
‘‘(A) the tax imposed by chapter 12 with re-
spect to such gifts, and 
‘‘(B) the credit allowed against such tax 
under section 2505, including in computing— 
‘‘(i) the applicable credit amount 
under section 2505(a)(1), and 
‘‘(ii) the sum of the amounts allowed 
as a credit for all preceding periods under 
section 2505(a)(2). 
‘‘(2) MODIFICATIONS TO ESTATE TAX PAYABLE 
TO
REFLECT
DIFFERENT
BASIC
EXCLUSION 
AMOUNTS.—The Secretary shall prescribe such regula-
† HR 1 EAS 
tions as may be necessary or appropriate to carry out 
this section with respect to any difference between— 
‘‘(A) the basic exclusion amount under sec-
tion 2010(c)(3) applicable at the time of the de-
cedent’s death, and 
‘‘(B) the basic exclusion amount under such 
section applicable with respect to any gifts made 
by the decedent.’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to estates of decedents dying and gifts 
made after December 31, 2017. 
PART VII—TAXPAYER RIGHTS AND TAX 
ADMINISTRATION 
SEC. 11071. EXTENSION OF TIME LIMIT FOR CONTESTING 
IRS LEVY. 
(a) EXTENSION OF TIME FOR RETURN OF PROPERTY 
SUBJECT
TO LEVY.—Subsection (b) of section 6343 is 
amended by striking ‘‘9 months’’ and inserting ‘‘2 years’’. 
(b) PERIOD OF LIMITATION ON SUITS.—Subsection (c) 
of section 6532 is amended— 
(1) by striking ‘‘9 months’’ in paragraph (1) 
and inserting ‘‘2 years’’, and 
(2) by striking ‘‘9-month’’ in paragraph (2) and 
inserting ‘‘2-year’’.
† HR 1 EAS 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to— 
(1) levies made after the date of the enactment 
of this Act, and 
(2) levies made on or before such date if the 9- 
month period has not expired under section 6343(b) 
of the Internal Revenue Code of 1986 (without regard 
to this section) as of such date. 
SEC. 11072. MODIFICATION OF USER FEE REQUIREMENTS 
FOR INSTALLMENT AGREEMENTS. 
(a) IN GENERAL.—Section 6159 is amended by redes-
ignating subsection (f) as subsection (g) and by inserting 
after subsection (e) the following new subsection: 
‘‘(f) INSTALLMENT AGREEMENT FEES.— 
‘‘(1) LIMITATION ON FEE AMOUNT.—The amount 
of any fee imposed on an installment agreement 
under this section may not exceed the amount of such 
fee as in effect on the date of the enactment of this 
subsection. 
‘‘(2) WAIVER OR REIMBURSEMENT.—In the case 
of any taxpayer with an adjusted gross income, as de-
termined for the most recent year for which such in-
formation is available, which does not exceed 250 per-
cent of the applicable poverty level (as determined by 
the Secretary)—
† HR 1 EAS 
‘‘(A) if the taxpayer has agreed to make 
payments under the installment agreement by 
electronic payment through a debit instrument, 
no fee shall be imposed on an installment agree-
ment under this section, and 
‘‘(B) if the taxpayer is unable to make pay-
ments under the installment agreement by elec-
tronic payment through a debit instrument, the 
Secretary shall, upon completion of the install-
ment agreement, pay the taxpayer an amount 
equal to any such fees imposed.’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to agreements entered into on or after 
the date which is 60 days after the date of the enactment 
of this Act. 
SEC. 11073. ATTORNEYS’ FEES RELATING TO AWARDS TO 
WHISTLEBLOWERS. 
(a) IN GENERAL.—Paragraph (21) of section 62(a) is 
amended to read as follows: 
‘‘(21) ATTORNEYS’ FEES RELATING TO AWARDS 
TO WHISTLEBLOWERS.— 
‘‘(A) IN GENERAL.—Any deduction allow-
able under this chapter for attorney fees and 
court costs paid by, or on behalf of, the taxpayer 
in connection with any award under—
† HR 1 EAS 
‘‘(i) section 7623(b), or 
‘‘(ii) any action brought under— 
‘‘(I) section 21F of the Securities 
Exchange Act of 1934 (15 U.S.C. 78u– 
6), 
‘‘(II) a State false claims act, in-
cluding a State false claims act with 
qui tam provisions, or 
‘‘(III) section 23 of the Com-
modity Exchange Act (7 U.S.C. 26). 
‘‘(B) MAY NOT EXCEED AWARD.—Subpara-
graph (A) shall not apply to any deduction in 
excess of the amount includible in the taxpayer’s 
gross income for the taxable year on account of 
such award.’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2017. 
SEC. 11074. CLARIFICATION OF WHISTLEBLOWER AWARDS. 
(a) DEFINITION OF PROCEEDS.— 
(1) IN GENERAL.—Section 7623 is amended by 
adding at the end the following new subsection: 
‘‘(c) PROCEEDS.—For purposes of this section, the 
term ‘proceeds’ includes—
† HR 1 EAS 
‘‘(1) penalties, interest, additions to tax, and ad-
ditional amounts provided under the internal revenue 
laws, and 
‘‘(2) any proceeds arising from laws for which 
the Internal Revenue Service is authorized to admin-
ister, enforce, or investigate, including— 
‘‘(A) criminal fines and civil forfeitures, 
and 
‘‘(B) violations of reporting requirements.’’. 
(2) 
CONFORMING
AMENDMENTS.—Paragraphs 
(1) and (2)(A) of section 7623(b) are each amended 
by striking ‘‘collected proceeds (including penalties, 
interest, additions to tax, and additional amounts) 
resulting from the action’’ and inserting ‘‘proceeds 
collected as a result of the action’’. 
(b) AMOUNT OF PROCEEDS DETERMINED WITHOUT 
REGARD TO AVAILABILITY.—Paragraphs (1) and (2)(A) of 
section 7623(b) are each amended by inserting ‘‘(determined 
without regard to whether such proceeds are available to 
the Secretary)’’ after ‘‘in response to such action’’. 
(c) 
DISPUTED
AMOUNT
THRESHOLD.—Section 
7623(b)(5)(B) is amended by striking ‘‘tax, penalties, inter-
est, additions to tax, and additional amounts’’ and insert-
ing ‘‘proceeds’’.
† HR 1 EAS 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply to information provided before, on, or 
after the date of the enactment of this Act with respect to 
which a final determination for an award has not been 
made before such date of enactment. 
PART VIII—INDIVIDUAL MANDATE 
SEC. 11081. ELIMINATION OF SHARED RESPONSIBILITY 
PAYMENT 
FOR 
INDIVIDUALS 
FAILING 
TO 
MAINTAIN MINIMUM ESSENTIAL COVERAGE. 
(a) IN GENERAL.—Section 5000A(c) is amended— 
(1) in paragraph (2)(B)(iii), by striking ‘‘2.5 
percent’’ and inserting ‘‘Zero percent’’, and 
(2) in paragraph (3)— 
(A) by striking ‘‘$695’’ in subparagraph 
(A) and inserting ‘‘$0’’, and 
(B) by striking subparagraph (D). 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to months beginning after December 31, 
2018. 
Subtitle B—Alternative Minimum 
Tax 
SEC. 12001. INCREASED EXEMPTION FOR INDIVIDUALS. 
(a) INCREASED EXEMPTION.—Section 55(d) is amend-
ed by adding at the end the following new paragraph:
† HR 1 EAS 
‘‘(5) SPECIAL RULE FOR TAXABLE YEARS BEGIN-
NING AFTER 2017 AND BEFORE 2026.— 
‘‘(A) IN GENERAL.—In the case of any tax-
able year beginning after December 31, 2017, 
and before January 1, 2026— 
‘‘(i) paragraph (1) shall be applied— 
‘‘(I) by substituting ‘$109,400’ for 
‘$78,750’ in subparagraph (A), and 
‘‘(II) by substituting ‘$70,300’ for 
‘$50,600’ in subparagraph (B), and 
‘‘(ii) paragraph (3) shall be applied— 
‘‘(I) by substituting ‘$208,400’ for 
‘$150,000’ in subparagraph (A), 
‘‘(II) by substituting ‘$156,300’ 
for ‘$112,500’ in subparagraph (B), 
and 
‘‘(III) in the case of a taxpayer 
described in paragraph (1)(D), without 
regard to the substitution under sub-
clause (I). 
‘‘(B) INFLATION ADJUSTMENT.— 
‘‘(i) IN GENERAL.—In the case of any 
taxable year beginning in a calendar year 
after 2018, the amounts described in clause
† HR 1 EAS 
(ii) shall each be increased by an amount 
equal to— 
‘‘(I) such dollar amount, multi-
plied 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 2017’ for ‘calendar year 
2016’ in subparagraph (A)(ii) thereof. 
‘‘(ii) 
AMOUNTS
DESCRIBED.—The 
amounts described in this clause are the 
$109,400 
amount 
in 
subparagraph 
(A)(i)(I), the $70,300 amount in subpara-
graph (A)(i)(II), the $208,400 amount in 
subparagraph (A)(ii)(I), and the $156,300 
amount in subparagraph (A)(ii)(II). 
‘‘(iii) 
ROUNDING.—Any 
increased 
amount determined under clause (i) shall be 
rounded to the nearest multiple of $100.’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2017.
† HR 1 EAS 
Subtitle C—Business-related 
Provisions 
PART I—CORPORATE PROVISIONS 
SEC. 13001. 20-PERCENT CORPORATE TAX RATE. 
(a) IN GENERAL.—Subsection (b) of section 11 is 
amended to read as follows: 
‘‘(b) AMOUNT OF TAX.—The amount of the tax im-
posed by subsection (a) shall be 20 percent of taxable in-
come.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) The following sections are each amended by 
striking ‘‘section 11(b)(1)’’ and inserting ‘‘section 
11(b)’’: 
(A) Section 280C(c)(3)(B)(ii)(II). 
(B) Paragraphs (2)(B) and (6)(A)(ii) of 
section 860E(e). 
(C) Section 7874(e)(1)(B). 
(2)(A) Part I of subchapter P of chapter 1 is 
amended by striking section 1201 (and by striking the 
item relating to such section in the table of sections 
for such part). 
(B) Section 12 is amended by striking para-
graphs (4) and (6), and by redesignating paragraph 
(5) as paragraph (4).
† HR 1 EAS 
(C) Section 453A(c)(3) is amended by striking 
‘‘or 1201 (whichever is appropriate)’’. 
(D) Section 527(b) is amended— 
(i) by striking paragraph (2), and 
(ii) by striking all that precedes ‘‘is hereby 
imposed’’ and inserting: 
‘‘(b) TAX IMPOSED.—A tax’’. 
(E) Sections 594(a) is amended by striking 
‘‘taxes imposed by section 11 or 1201(a)’’ and insert-
ing ‘‘tax imposed by section 11’’. 
(F) Section 691(c)(4) is amended by striking 
‘‘1201,’’. 
(G) Section 801(a) is amended— 
(i) by striking paragraph (2), and 
(ii) by striking all that precedes ‘‘is hereby 
imposed’’ and inserting: 
‘‘(a) TAX IMPOSED.—A tax’’. 
(H) Section 831(e) is amended by striking para-
graph (1) and by redesignating paragraphs (2) and 
(3) as paragraphs (1) and (2), respectively. 
(I) Sections 832(c)(5) and 834(b)(1)(D) are each 
amended by striking ‘‘sec. 1201 and following,’’. 
(J) Section 852(b)(3)(A) is amended by striking 
‘‘section 1201(a)’’ and inserting ‘‘section 11(b)’’. 
(K) Section 857(b)(3) is amended—
† HR 1 EAS 
(i) by striking subparagraph (A) and redes-
ignating subparagraphs (B) through (F) as sub-
paragraphs (A) through (E), respectively, 
(ii) in subparagraph (C), as so redesig-
nated— 
(I) by striking ‘‘subparagraph (A)(ii)’’ 
in clause (i) thereof and inserting ‘‘para-
graph (1)’’, 
(II) by striking ‘‘the tax imposed by 
subparagraph (A)(ii)’’ in clauses (ii) and 
(iv) thereof and inserting ‘‘the tax imposed 
by paragraph (1) on undistributed capital 
gain’’, 
(iii) in subparagraph (E), as so redesig-
nated, by striking ‘‘subparagraph (B) or (D)’’ 
and inserting ‘‘subparagraph (A) or (C)’’, and 
(iv) by adding at the end the following new 
subparagraph: 
‘‘(F) UNDISTRIBUTED CAPITAL GAIN.—For 
purposes of this paragraph, the term ‘undistrib-
uted capital gain’ means the excess of the net 
capital gain over the deduction for dividends 
paid (as defined in section 561) determined with 
reference to capital gain dividends only.’’.
† HR 1 EAS 
(L) Section 882(a)(1) is amended by striking ‘‘, 
55, or 1201(a)’’ and inserting ‘‘or 55’’. 
(M) Section 904(b) is amended— 
(i) by striking ‘‘or 1201(a)’’ in paragraph 
(2)(C), 
(ii) by striking paragraph (3)(D) and in-
serting the following: 
‘‘(D) CAPITAL GAIN RATE DIFFERENTIAL.— 
There is a capital gain rate differential for any 
year if subsection (h) of section 1 applies to such 
taxable year.’’, and 
(iii) by striking paragraph (3)(E) and in-
serting the following: 
‘‘(E) RATE
DIFFERENTIAL
PORTION.—The 
rate differential portion of foreign source net 
capital gain, net capital gain, or the excess of 
net capital gain from sources within the United 
States over net capital gain, as the case may be, 
is the same proportion of such amount as— 
‘‘(i) the excess of— 
‘‘(I) the highest rate of tax set 
forth in subsection (a), (b), (c), (d), or 
(e) of section 1 (whichever applies), 
over
† HR 1 EAS 
‘‘(II) the alternative rate of tax 
determined under section 1(h), bears to 
‘‘(ii) that rate referred to in subclause 
(I).’’. 
(N) Section 1374(b) is amended by striking 
paragraph (4). 
(O) Section 1381(b) is amended by striking 
‘‘taxes imposed by section 11 or 1201’’ and inserting 
‘‘tax imposed by section 11’’. 
(P) Sections 6425(c)(1)(A) and 6655(g)(1)(A)(i) 
are each amended by striking ‘‘or 1201(a),’’. 
(Q) Section 7518(g)(6)(A) is amended by strik-
ing ‘‘or 1201(a)’’. 
(3)(A) Section 1445(e)(1) is amended— 
(i) by striking ‘‘35 percent’’ and inserting 
‘‘the highest rate of tax in effect for the taxable 
year under section 11(b)’’, and 
(ii) by striking ‘‘of the gain’’ and inserting 
‘‘multiplied by the gain’’. 
(B) Section 1445(e)(2) is amended by striking 
‘‘35 percent of the amount’’ and inserting ‘‘the highest 
rate of tax in effect for the taxable year under section 
11(b) multiplied by the amount’’. 
(C) Section 1445(e)(6) is amended—
† HR 1 EAS 
(i) by striking ‘‘35 percent’’ and inserting 
‘‘the highest rate of tax in effect for the taxable 
year under section 11(b)’’, and 
(ii) by striking ‘‘of the amount’’ and insert-
ing ‘‘multiplied by the amount’’. 
(D) Section 1446(b)(2)(B) is amended by strik-
ing ‘‘section 11(b)(1)’’ and inserting ‘‘section 11(b)’’. 
(4) Section 852(b)(1) is amended by striking the 
last sentence. 
(5)(A) Part I of subchapter B of chapter 5 is 
amended by striking section 1551 (and by striking the 
item relating to such section in the table of sections 
for such part). 
(B) Section 535(c)(5) is amended to read as fol-
lows: 
‘‘(5) CROSS
REFERENCE.—For limitation on 
credit provided in paragraph (2) or (3) in the case 
of certain controlled corporations, see section 1561.’’. 
(6)(A) Section 1561(a) is amended— 
(i) by striking paragraph (1) and redesig-
nating paragraphs (2) and (3) as paragraphs 
(1) and (2), respectively, 
(ii) by striking ‘‘amounts specified in para-
graph (1) and the amount specified in para-
100 
† HR 1 EAS 
graph (3)’’ and inserting ‘‘the amount specified 
in paragraph (2)’’, 
(iii) by striking ‘‘The amounts specified in 
paragraph (2)’’ and inserting ‘‘The amounts 
specified in paragraph (1)’’, 
(iv) by striking the third sentence in the 
flush language, and 
(v) by striking ‘‘under paragraph (3)’’ and 
inserting ‘‘under paragraph (2)’’. 
(B) The first sentence of section 1561(b) is 
amended to read as follows: ‘‘If a corporation has a 
short taxable year which does not include a December 
31 and is a component member of a controlled group 
of corporations with respect to such taxable year, then 
for purposes of this subtitle the amount to be used in 
computing the accumulated earnings credit under sec-
tion 535(c)(2) and (3) of such corporation for such 
taxable year shall be the amount specified in sub-
section (a)(1) divided by the number of corporations 
which are component members of such group on the 
last day of such taxable year.’’ 
(7) Section 7518(g)(6)(A) is amended— 
(A) by striking ‘‘With respect to the por-
tion’’ and inserting ‘‘In the case of a taxpayer
101 
† HR 1 EAS 
other than a corporation, with respect to the por-
tion’’, and 
(B) by striking ‘‘(34 percent in the case of 
a corporation)’’. 
(c) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as otherwise provided 
in this subsection, the amendments made by this sec-
tion shall apply to taxable years beginning after De-
cember 31, 2018. 
(2) WITHHOLDING.—The amendments made by 
subsection (b)(3) shall apply to distributions made 
after December 31, 2018. 
(3) CERTAIN
TRANSFERS.—The amendments 
made by subsection (b)(6) shall apply to transfers 
made after December 31, 2018. 
(d) NORMALIZATION REQUIREMENTS.— 
(1) IN GENERAL.—A normalization method of 
accounting shall not be treated as being used with re-
spect to any public utility property for purposes of 
section 167 or 168 of the Internal Revenue Code of 
1986 if the taxpayer, in computing its cost of service 
for ratemaking purposes and reflecting operating re-
sults in its regulated books of account, reduces the ex-
cess tax reserve more rapidly or to a greater extent
102 
† HR 1 EAS 
than such reserve would be reduced under the average 
rate assumption method. 
(2) ALTERNATIVE METHOD FOR CERTAIN TAX-
PAYERS.—If, as of the first day of the taxable year 
that includes the date of enactment of this Act— 
(A) the taxpayer was required by a regu-
latory agency to compute depreciation for public 
utility property on the basis of an average life 
or composite rate method, and 
(B) the taxpayer’s books and underlying 
records did not contain the vintage account data 
necessary to apply the average rate assumption 
method, 
the taxpayer will be treated as using a normalization 
method of accounting if, with respect to such jurisdic-
tion, the taxpayer uses the alternative method for 
public utility property that is subject to the regu-
latory authority of that jurisdiction. 
(3) DEFINITIONS.—For purposes of this sub-
section— 
(A) EXCESS TAX RESERVE.—The term ‘‘ex-
cess tax reserve’’ means the excess of— 
(i) the reserve for deferred taxes (as de-
scribed in section 168(i)(9)(A)(ii) of the In-
ternal Revenue Code of 1986) as determined
103 
† HR 1 EAS 
under the Internal Revenue Code of 1986 as 
in effect on the day before the date of the en-
actment of this Act, over 
(ii) the amount which would be the 
balance in such reserve if the amount of 
such reserve were determined by assuming 
that the corporate rate reductions provided 
in this Act were in effect for all prior peri-
ods. 
(B) AVERAGE
RATE
ASSUMPTION
METH-
OD.—The average rate assumption method is the 
method under which the excess in the reserve for 
deferred taxes is reduced over the remaining lives 
of the property as used in its regulated books of 
account which gave rise to the reserve for de-
ferred taxes. Under such method, if timing dif-
ferences for the property reverse, the amount of 
the adjustment to the reserve for the deferred 
taxes is calculated by multiplying— 
(i) the ratio of the aggregate deferred 
taxes for the property to the aggregate tim-
ing differences for the property as of the be-
ginning of the period in question, by 
(ii) the amount of the timing dif-
ferences which reverse during such period.
104 
† HR 1 EAS 
(C) ALTERNATIVE
METHOD.—The ‘‘alter-
native method’’ is the method in which the tax-
payer— 
(i) computes the excess tax reserve on 
all public utility property included in the 
plant account on the basis of the weighted 
average life or composite rate used to com-
pute depreciation for regulatory purposes, 
and 
(ii) reduces the excess tax reserve rat-
ably over the remaining regulatory life of 
the property. 
(4) TAX INCREASED FOR NORMALIZATION VIOLA-
TION.—If, for any taxable year ending after the date 
of the enactment of this Act, the taxpayer does not use 
a normalization method of accounting, the taxpayer’s 
tax for the taxable year shall be increased by the 
amount by which it reduces its excess tax reserve 
more rapidly than permitted under a normalization 
method of accounting. 
SEC. 13002. REDUCTION IN DIVIDEND RECEIVED DEDUC-
TIONS TO REFLECT LOWER CORPORATE IN-
COME TAX RATES. 
(a) DIVIDENDS RECEIVED BY CORPORATIONS.—
105 
† HR 1 EAS 
(1) IN GENERAL.—Section 243(a)(1) is amended 
by striking ‘‘70 percent’’ and inserting ‘‘50 percent’’. 
(2) DIVIDENDS FROM 20-PERCENT OWNED COR-
PORATIONS.—Section 243(c)(1) is amended— 
(A) by striking ‘‘80 percent’’ and inserting 
‘‘65 percent’’, and 
(B) by striking ‘‘70 percent’’ and inserting 
‘‘50 percent’’. 
(3) CONFORMING AMENDMENT.—The heading for 
section 243(c) is amended by striking ‘‘RETENTION OF 
80-PERCENT DIVIDEND RECEIVED DEDUCTION’’ and 
inserting ‘‘INCREASED PERCENTAGE’’. 
(b) DIVIDENDS
RECEIVED
FROM
FSC.—Section 
245(c)(1)(B) is amended— 
(1) by striking ‘‘70 percent’’ and inserting ‘‘50 
percent’’, and 
(2) by striking ‘‘80 percent’’ and inserting ‘‘65 
percent’’. 
(c) LIMITATION ON AGGREGATE AMOUNT OF DEDUC-
TIONS.—Section 246(b)(3) is amended— 
(1) by striking ‘‘80 percent’’ in subparagraph 
(A) and inserting ‘‘65 percent’’, and 
(2) by striking ‘‘70 percent’’ in subparagraph 
(B) and inserting ‘‘50 percent’’.
106 
† HR 1 EAS 
(d) REDUCTION IN DEDUCTION WHERE PORTFOLIO 
STOCK IS DEBT-FINANCED.—Section 246A(a)(1) is amend-
ed— 
(1) by striking ‘‘70 percent’’ and inserting ‘‘50 
percent’’, and 
(2) by striking ‘‘80 percent’’ and inserting ‘‘65 
percent’’. 
(e) INCOME FROM SOURCES WITHIN THE UNITED 
STATES.—Section 861(a)(2) is amended— 
(1) by striking ‘‘100/70th’’ and inserting ‘‘100/ 
50th’’ in subparagraph (B), and 
(2) in the flush sentence at the end— 
(A) by striking ‘‘100/80th’’ and inserting 
‘‘100/65th’’, and 
(B) by striking ‘‘100/70th’’ and inserting 
‘‘100/50th’’. 
(f) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2018. 
PART II—SMALL BUSINESS REFORMS 
SEC. 13101. MODIFICATIONS OF RULES FOR EXPENSING DE-
PRECIABLE BUSINESS ASSETS. 
(a) INCREASE IN LIMITATION.—
107 
† HR 1 EAS 
(1) DOLLAR LIMITATION.—Section 179(b)(1) is 
amended by striking ‘‘$500,000’’ and inserting 
‘‘$1,000,000’’. 
(2) 
REDUCTION
IN
LIMITATION.—Section 
179(b)(2) is amended by striking ‘‘$2,000,000’’ and 
inserting ‘‘$2,500,000’’. 
(3) INFLATION ADJUSTMENTS.— 
(A) IN
GENERAL.—Subparagraph (A) of 
section 
179(b)(6), 
as 
amended 
by 
section 
11002(d), is amended— 
(i) by striking ‘‘2015’’ and inserting 
‘‘2018’’, and 
(ii) in clause (ii), by striking ‘‘cal-
endar year 2014’’ and inserting ‘‘calendar 
year 2017’’. 
(B) SPORT
UTILITY
VEHICLES.—Section 
179(b)(6) is amended— 
(i) in subparagraph (A), by striking 
‘‘paragraphs (1) and (2)’’ and inserting 
‘‘paragraphs (1), (2), and (5)(A)’’, and 
(ii) in subparagraph (B), by inserting 
‘‘($100 in the case of any increase in the 
amount under paragraph (5)(A))’’ after 
‘‘$10,000’’.
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† HR 1 EAS 
(b) SECTION 179 PROPERTY TO INCLUDE QUALIFIED 
REAL PROPERTY.— 
(1) IN GENERAL.—Subparagraph (B) of section 
179(d)(1) is amended to read as follows: 
‘‘(B) which is— 
‘‘(i) section 1245 property (as defined 
in section 1245(a)(3)), or 
‘‘(ii) at the election of the taxpayer, 
qualified real property (as defined in sub-
section (f)), and’’. 
(2) QUALIFIED REAL PROPERTY DEFINED.—Sub-
section (f) of section 179 is amended to read as fol-
lows: 
‘‘(f) QUALIFIED REAL PROPERTY.—For purposes of 
this section, the term ‘qualified real property’ means— 
‘‘(1) any qualified improvement property de-
scribed in section 168(e)(6), and 
‘‘(2) any of the following improvements to non-
residential real property placed in service after the 
date such property was first placed in service: 
‘‘(A) Roofs. 
‘‘(B) Heating, ventilation, and air-condi-
tioning property. 
‘‘(C) Fire protection and alarm systems. 
‘‘(D) Security systems.’’.
109 
† HR 1 EAS 
(c) REPEAL
OF EXCLUSION
FOR CERTAIN PROP-
ERTY.—The last sentence of section 179(d)(1) is amended 
by inserting ‘‘(other than paragraph (2) thereof)’’ after 
‘‘section 50(b)’’. 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply to property placed in service in taxable 
years beginning after December 31, 2017. 
SEC. 13102. MODIFICATIONS OF GROSS RECEIPTS TEST FOR 
USE OF CASH METHOD OF ACCOUNTING BY 
CORPORATIONS AND PARTNERSHIPS. 
(a) MODIFICATIONS OF GROSS RECEIPTS TEST.— 
(1) IN GENERAL.—So much of section 448(c) as 
precedes paragraph (2) is amended to read as follows: 
‘‘(c) GROSS RECEIPTS TEST.— 
‘‘(1) IN GENERAL.—A corporation or partnership 
meets the gross receipts test of this subsection for any 
taxable year if the average annual gross receipts of 
such entity for the 3-taxable-year period ending with 
the taxable year which precedes such taxable year does 
not exceed the applicable dollar limit.’’. 
(2) APPLICABLE DOLLAR LIMIT.—Subsection (c) 
of section 448 is amended by adding at the end the 
following new paragraph: 
‘‘(4) APPLICABLE DOLLAR LIMIT.—
110 
† HR 1 EAS 
‘‘(A) IN GENERAL.—The applicable dollar 
limit is $15,000,000. 
‘‘(B) ADJUSTMENT FOR INFLATION.—In the 
case of any taxable year beginning after Decem-
ber 31, 2018, the $15,000,000 amount under sub-
paragraph (A) shall be increased by an amount 
equal to— 
‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the cost-of-living adjustment de-
termined under section 1(f)(3) for the cal-
endar year in which the taxable year be-
gins, by substituting ‘calendar year 2017’ 
for ‘calendar year 2016’ in subparagraph 
(A)(ii) thereof. 
If any amount as increased under the preceding 
sentence is not a multiple of $1,000, such 
amount shall be rounded to the next lowest mul-
tiple of $1,000.’’. 
(3) CHANGE
IN
METHOD
OF
ACCOUNTING.— 
Paragraph (7) of section 448(d) is amended— 
(A) by striking ‘‘In the case of’’ and all that 
follows up to subparagraph (A) and inserting: 
‘‘If a taxpayer changes its method of accounting 
because the taxpayer is prohibited from using the 
cash receipts and disbursement method of ac-
111 
† HR 1 EAS 
counting by reason of subsection (a) or is no 
longer prohibited from using such method by rea-
son of such subsection—’’, and 
(B) by inserting ‘‘and’’ at the end of sub-
paragraph (A), by striking ‘‘, and’’ at the end of 
subparagraph (B) and inserting a period, and 
by striking subparagraph (C). 
(4) CONFORMING AMENDMENT.—Paragraph (3) 
of section 448(b) is amended to read as follows: 
‘‘(3) ENTITIES
SATISFYING
GROSS
RECEIPTS 
TEST.—Paragraphs (1) and (2) of subsection (a) shall 
not apply to any corporation or partnership for any 
taxable year if such entity meets the gross receipts test 
of subsection (c) for the taxable year.’’. 
(b) APPLICATION
OF MODIFICATIONS TO FARMING 
CORPORATIONS.— 
(1) IN
GENERAL.—Paragraph (1) of section 
447(d) is amended to read as follows: 
‘‘(1) IN GENERAL.—A corporation meets the re-
quirements of this subsection for any taxable year 
with respect to its gross receipts if the corporation 
meets the gross receipts test of section 448(c) for the 
taxable year.’’. 
(2) FAMILY CORPORATIONS.—Paragraph (2) of 
section 447(d) is amended—
112 
† HR 1 EAS 
(A) by striking subparagraph (A) and in-
serting the following: 
‘‘(A) IN GENERAL.—In the case of a family 
corporation, in applying section 448(c) for pur-
poses of paragraph (1)— 
‘‘(i) paragraph (1) of section 448(c) 
shall be applied by substituting the applica-
ble family corporation limit for the applica-
ble dollar limit, and 
‘‘(ii) the rules of subparagraph (B) 
shall apply in computing gross receipts.’’, 
(B) in subparagraph (B)(i), by striking 
‘‘the last sentence of paragraph (1)’’ and insert-
ing ‘‘paragraph (2) of section 448(c)’’, and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(D) APPLICABLE
FAMILY
CORPORATION 
LIMIT.— 
‘‘(i) IN
GENERAL.—The applicable 
family corporation limit is $25,000,000. 
‘‘(ii) ADJUSTMENT FOR INFLATION.— 
In the case of any taxable year beginning 
after December 31, 2018, the $25,000,000 
amount under clause (i) shall be increased 
by an amount equal to—
113 
† HR 1 EAS 
‘‘(I) such dollar amount, multi-
plied by 
‘‘(II) the cost-of-living adjustment 
determined under section 1(f)(3) for 
the calendar year in which the taxable 
year begins, by substituting ‘calendar 
year 2017’ for ‘calendar year 2016’ in 
subparagraph (A)(ii) thereof. 
If any amount as increased under the pre-
ceding sentence is not a multiple of $1,000, 
such amount shall be rounded to the next 
lowest multiple of $1,000.’’. 
(3) EXCEPTION FOR CERTAIN CORPORATIONS.— 
Subsection (c) of section 447 is amended by inserting 
‘‘for any taxable year’’ after ‘‘not being a corpora-
tion’’. 
(4) CHANGE IN METHOD OF ACCOUNTING.—Sec-
tion 447(f) is amended— 
(A) by striking ‘‘In the case of’’ and all that 
follows up to paragraph (1) and inserting the 
following: ‘‘If a taxpayer changes its method of 
accounting because the taxpayer is required to 
use an accrual method of accounting by reason 
of subsection (a) or is no longer required to use
114 
† HR 1 EAS 
such method by reason of such subsection—’’, 
and 
(B) by striking paragraph (2) and inserting 
the following: 
‘‘(2) such change shall be treated as initiated by 
the taxpayer, and’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2017. 
SEC. 13103. CLARIFICATION OF INVENTORY ACCOUNTING 
RULES FOR SMALL BUSINESSES. 
(a) CLARIFICATION OF INVENTORY RULES.— 
(1) IN GENERAL.—Section 471 is amended by re-
designating subsection (c) as subsection (d) and by 
inserting after subsection (b) the following new sub-
section: 
‘‘(c) SMALL BUSINESS TAXPAYERS NOT REQUIRED TO 
USE INVENTORIES.— 
‘‘(1) IN GENERAL.—A qualified taxpayer shall 
not be required to use inventories under this section 
for a taxable year. 
‘‘(2) TREATMENT OF TAXPAYERS NOT USING IN-
VENTORIES.—A qualified taxpayer who is not re-
quired under this subsection to use inventories with
115 
† HR 1 EAS 
respect to any property for a taxable year beginning 
after December 31, 2017, may treat such property— 
‘‘(A) as a non-incidental material or sup-
ply, or 
‘‘(B) in a manner which conforms to the 
taxpayer’s method for accounting for such prop-
erty in— 
‘‘(i) an applicable financial statement 
(as defined in section 451(b)(3)), or 
‘‘(ii) in the case of a taxpayer that 
does not have an applicable financial state-
ment, their books and records used for pur-
poses of determining tax imposed by this 
title. 
‘‘(3) QUALIFIED
TAXPAYER.—For purposes of 
this subsection, the term ‘qualified taxpayer’ means, 
with respect to any taxable year, a taxpayer who 
meets the gross receipts test of section 448(c) for the 
taxable year (or, in the case of a sole proprietorship, 
who would meet such test if such proprietorship were 
a corporation). Such term shall not include a tax 
shelter prohibited from using the cash receipts and 
disbursements method of accounting under section 
448(a)(3).
116 
† HR 1 EAS 
‘‘(4) COORDINATION
WITH
SECTION
481.—If a 
taxpayer changes its method of accounting because the 
taxpayer is not required to use inventories by reason 
of paragraph (1) or is required to use inventories be-
cause such paragraph no longer applies to the tax-
payer— 
‘‘(A) such change shall be treated as initi-
ated by the taxpayer, and 
‘‘(B) such change shall be treated as made 
with the consent of the Secretary.’’. 
(2) CONFORMING
AMENDMENT.—Subsection (c) 
of section 263A is amended by adding at the end the 
following new paragraph: 
‘‘(8) EXCLUSION
FROM
INVENTORY
RULES.— 
Nothing in this section shall require the use of inven-
tories for any taxable year by a qualified taxpayer 
(within the meaning of section 471(c)(3)) who is not 
required to use inventories under section 471 for such 
taxable year.’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2017.
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† HR 1 EAS 
SEC. 13104. MODIFICATION OF RULES FOR UNIFORM CAP-
ITALIZATION OF CERTAIN EXPENSES. 
(a) IN GENERAL.—Section 263A(b) is amended by 
striking all that follows paragraph (1) and inserting the 
following new paragraphs: 
‘‘(2) PROPERTY ACQUIRED FOR RESALE.—Real 
or personal property described in section 1221(a)(1) 
which is acquired by the taxpayer for resale. 
‘‘(3) EXCEPTION FOR SMALL BUSINESSES.—This 
section shall not apply to any taxpayer who meets the 
gross receipts test under section 448(c) for the taxable 
year (or, in the case of a sole proprietorship, who 
would meet such test if such proprietorship were a 
corporation), other than a tax shelter prohibited from 
using the cash receipts and disbursements method of 
accounting under section 448(a)(3). 
‘‘(4) FILMS, SOUND RECORDINGS, BOOKS, ETC.— 
For purposes of this subsection, the term ‘tangible 
personal property’ shall include a film, sound record-
ing, video tape, book, or similar property. 
‘‘(5) COORDINATION
WITH
SECTION
481.—If a 
taxpayer changes its method of accounting because 
this section does not apply to the taxpayer by reason 
of the exception under paragraph (3) or this section 
applies to the taxpayer because such exception no 
longer applies to the taxpayer—
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† HR 1 EAS 
‘‘(A) such change shall be treated as initi-
ated by the taxpayer, and 
‘‘(B) such change shall be treated as made 
with the consent of the Secretary.’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2017. 
SEC. 13105. INCREASE IN GROSS RECEIPTS TEST FOR CON-
STRUCTION CONTRACT EXCEPTION TO PER-
CENTAGE OF COMPLETION METHOD. 
(a) INCREASE.— 
(1) 
IN
GENERAL.—Section 
460(e)(1)(B) 
is 
amended— 
(A) in the matter preceding clause (i), by 
inserting ‘‘(other than a tax shelter prohibited 
from using the cash receipts and disbursements 
method of accounting under section 448(a)(3))’’ 
after ‘‘taxpayer’’, and 
(B) by striking clause (ii) and inserting the 
following: 
‘‘(ii) who meets the gross receipts test 
of section 448(c) for the taxable year in 
which such contract is entered into (or, in 
the case of a sole proprietorship, who would
119 
† HR 1 EAS 
meet such test if such proprietorship were a 
corporation).’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 460(e) is amended by striking 
paragraphs (2) and (3) and by redesignating 
paragraphs (4) through (6) as paragraphs (2) 
through (4), respectively. 
(B) The last sentence of section 56(a)(3) is 
amended by striking ‘‘section 460(e)(6)’’ and in-
serting ‘‘section 460(e)(4)’’. 
(b) COORDINATION
WITH
SECTION
481.—Section 
460(e), as amended by subsection (a), is amended by adding 
at the end the following: 
‘‘(5) COORDINATION
WITH
SECTION
481.—If a 
taxpayer changes its method of accounting because 
subsections (a), (b), (c)(1), and (c)(2) do not apply by 
reason of the exception under paragraph (1)(B) or 
such subsections apply to the taxpayer because such 
exception no longer applies to the taxpayer— 
‘‘(A) such change shall be treated as initi-
ated by the taxpayer, 
‘‘(B) such change shall be treated as made 
with the consent of the Secretary, and 
‘‘(C) such change shall be permitted only on 
a cut-off basis for all similarly classified con-
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† HR 1 EAS 
tracts entered into on or after the year of change 
and no adjustments under section 481(a) shall be 
made.’’. 
(c) EFFECTIVE DATE.—The amendment made by this 
section shall apply to contracts entered into after December 
31, 2017, in taxable years ending after such date. 
PART III—COST RECOVERY AND ACCOUNTING 
METHODS 
Subpart A—Cost Recovery 
SEC. 13201. TEMPORARY 100-PERCENT EXPENSING FOR 
CERTAIN BUSINESS ASSETS. 
(a) INCREASED EXPENSING.— 
(1) IN GENERAL.—Section 168(k) is amended— 
(A) in paragraph (1)(A), by striking ‘‘50 
percent’’ and inserting ‘‘the applicable percent-
age’’, and 
(B) in paragraph (5)(A)(i), by striking ‘‘50 
percent’’ and inserting ‘‘the applicable percent-
age’’. 
(2) APPLICABLE PERCENTAGE.—Paragraph (6) 
of section 168(k) is amended to read as follows: 
‘‘(6) APPLICABLE
PERCENTAGE.—For purposes 
of this subsection—
121 
† HR 1 EAS 
‘‘(A) IN
GENERAL.—Except as otherwise 
provided in this paragraph, the term ‘applicable 
percentage’ means— 
‘‘(i) in the case of property placed in 
service after September 27, 2017, and before 
January 1, 2023, 100 percent, 
‘‘(ii) in the case of property placed in 
service after December 31, 2022, and before 
January 1, 2024, 80 percent, 
‘‘(iii) in the case of property placed in 
service after December 31, 2023, and before 
January 1, 2025, 60 percent, 
‘‘(iv) in the case of property placed in 
service after December 31, 2024, and before 
January 1, 2026, 40 percent, and 
‘‘(v) in the case of property placed in 
service after December 31, 2025, and before 
January 1, 2027, 20 percent. 
‘‘(B) RULE FOR PROPERTY WITH LONGER 
PRODUCTION PERIODS.—In the case of property 
described in paragraph (2)(B) or (C), the term 
‘applicable percentage’ means— 
‘‘(i) in the case of property placed in 
service after September 27, 2017, and before 
January 1, 2024, 100 percent,
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† HR 1 EAS 
‘‘(ii) in the case of property placed in 
service after December 31, 2023, and before 
January 1, 2025, 80 percent, 
‘‘(iii) in the case of property placed in 
service after December 31, 2024, and before 
January 1, 2026, 60 percent, 
‘‘(iv) in the case of property placed in 
service after December 31, 2025, and before 
January 1, 2027, 40 percent, and 
‘‘(v) in the case of property placed in 
service after December 31, 2026, and before 
January 1, 2028, 20 percent. 
‘‘(C) RULE FOR PLANTS BEARING FRUITS 
AND NUTS.—In the case of a specified plant de-
scribed in paragraph (5), the term ‘applicable 
percentage’ means— 
‘‘(i) in the case of a plant which is 
planted or grafted after September 27, 2017, 
and before January 1, 2023, 100 percent, 
‘‘(ii) in the case of a plant which is 
planted or grafted after December 31, 2022, 
and before January 1, 2024, 80 percent, 
‘‘(iii) in the case of a plant which is 
planted or grafted after December 31, 2023, 
and before January 1, 2025, 60 percent,
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† HR 1 EAS 
such affidavit or statement to the Secretary 
at such time and in such manner as re-
quired by such regulations. 
‘‘(C) RULES FOR AGENTS.—The rules of sec-
tion 1445(d) shall apply to a transferor’s agent 
or transferee’s agent with respect to any affidavit 
described in subparagraph (A) in the same man-
ner as such rules apply with respect to the dis-
position of a United States real property interest 
under such section. 
‘‘(3) AUTHORITY OF SECRETARY TO PRESCRIBE 
REDUCED AMOUNT.—At the request of the transferor 
or transferee, the Secretary may prescribe a reduced 
amount to be withheld under this section if the Sec-
retary determines that to substitute such reduced 
amount will not jeopardize the collection of the tax 
imposed under this title with respect to gain treated 
under section 864(c)(8) as effectively connected with 
the conduct of a trade or business with in the United 
States. 
‘‘(4) PARTNERSHIP TO WITHHOLD AMOUNTS NOT 
WITHHELD
BY
THE
TRANSFEREE.—If a transferee 
fails to withhold any amount required to be withheld 
under paragraph (1), the partnership shall be re-
quired to deduct and withhold from distributions to
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† HR 1 EAS 
ignating clauses (iv) and (v) as clauses (iii) and (iv), 
respectively. 
(7) Section 842(c) is amended by striking para-
graph (1) and by redesignating paragraphs (2) and 
(3) as paragraphs (1) and (2), respectively. 
(8) Section 953(b)(1), as amended by section 
13511, is amended by striking subparagraph (A) and 
by redesignating subparagraphs (B) and (C) as sub-
paragraphs (A) and (B), respectively. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2017. 
SEC. 13513. ADJUSTMENT FOR CHANGE IN COMPUTING RE-
SERVES. 
(a) IN GENERAL.—Paragraph (1) of section 807(f) is 
amended to read as follows: 
‘‘(1) TREATMENT AS CHANGE IN METHOD OF AC-
COUNTING.—If the basis for determining any item re-
ferred to in subsection (c) as of the close of any tax-
able year differs from the basis for such determination 
as of the close of the preceding taxable year, then so 
much of the difference between— 
‘‘(A) the amount of the item at the close of 
the taxable year, computed on the new basis, and