capital account and allowed as an amortization 
deduction determined by amortizing such ex-
penditures ratably over the 180-month period 
beginning with the month in which the active 
trade or business begins. 
‘‘(2) APPLICATION
TO
ORGANIZATIONAL
EX-
PENDITURES.—In the case of organizational expend-
itures with respect to any corporation or partner-
ship, the active trade or business referred to in para-
graph (1) means the first active trade or business 
carried on by such corporation or partnership. 
‘‘(3) INFLATION ADJUSTMENT.—In the case of 
any taxable year beginning after December 31, 
2023, the $20,000 and $120,000 amounts in para-
graph (1)(A)(ii) shall each be increased by an 
amount equal to— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar 
year in which the taxable year begins, deter-
mined by substituting ‘calendar year 2022’ for 
‘calendar year 2016’ in subparagraph (A)(ii) 
thereof. 
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If any amount as increased under the preceding sen-
tence is not a multiple of $1,000, such amount shall 
be rounded to the nearest multiple of $1,000. 
‘‘(c) ALLOWANCE OF DEDUCTION UPON LIQUIDA-
TION OR DISPOSITION.— 
‘‘(1) LIQUIDATION OF PARTNERSHIP OR COR-
PORATION.—If any partnership or corporation is 
completely liquidated by the taxpayer, any start-up 
or organizational expenditures paid or incurred in 
connection with such partnership or corporation 
which were not allowed as a deduction by reason of 
this section may be deducted to the extent allowable 
under section 165. 
‘‘(2) DISPOSITION OF TRADE OR BUSINESS.—If 
any trade or business is completely disposed of or 
discontinued by the taxpayer, any start-up expendi-
tures paid or incurred in connection with such trade 
or business which were not allowed as a deduction 
by reason of this section (and not taken into account 
in connection with a liquidation to which paragraph 
(1) applies) may be deducted to the extent allowable 
under section 165. For purposes of this paragraph, 
in the case of any deduction allowed under sub-
section (b)(1) with respect to both start-up and or-
ganizational expenditures, the amount treated as so 
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allowed with respect to start-up expenditures shall 
bear the same ratio to such deduction as the start- 
up expenditures taken into account in determining 
such deduction bears to the aggregate of the start- 
up and organizational expenditures so taken into ac-
count.’’. 
(b) 
ORGANIZATIONAL
EXPENDITURES.—Section 
195(d) of such Code, as redesignated by subsection (a), 
is amended by adding at the end the following new para-
graphs: 
‘‘(3) ORGANIZATIONAL
EXPENDITURES.—The 
term ‘organizational expenditures’ means any ex-
penditure which— 
‘‘(A) is incident to the creation of a cor-
poration or a partnership, 
‘‘(B) is chargeable to capital account, and 
‘‘(C) is of a character which, if expended 
incident to the creation of a corporation or a 
partnership having an ascertainable life, would 
be amortizable over such life. 
‘‘(4) APPLICATION TO CERTAIN DISREGARDED 
ENTITIES.—In the case of any entity with a single 
owner that is disregarded as an entity separate from 
its owner, this section shall be applied in the same 
manner as if such entity were a corporation.’’. 
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(c) ELECTION.—Section 195(e)(2) of such Code, as 
redesignated by subsection (a), is amended to read as fol-
lows: 
‘‘(2) PARTNERSHIPS AND S CORPORATIONS.—In 
the case of any partnership or S corporation, the 
election under subsection (b) shall be made (and this 
section shall be applied) at the entity level.’’. 
(d) CONFORMING AMENDMENTS.— 
(1)(A) Part VIII of subchapter B of chapter 1 
is amended by striking section 248 of such Code 
(and by striking the item relating to such section in 
the table of sections of such part). 
(B) Section 170(b)(2)(D)(ii) of such Code is 
amended by striking ‘‘(except section 248)’’. 
(C) Section 312(n)(3) of such Code is amended 
by striking ‘‘Sections 173 and 248’’ and inserting 
‘‘Sections 173 and 195’’. 
(D) Section 535(b)(3) of such Code is amended 
by striking ‘‘(except section 248)’’. 
(E) Section 545(b)(3) of such Code is amended 
by striking ‘‘(except section 248)’’. 
(F) Section 545(b)(4) of such Code is amended 
by striking ‘‘(except section 248)’’. 
(G) Section 834(c)(7) of such Code is amended 
by striking ‘‘(except section 248)’’. 
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(H) Section 852(b)(2)(C) of such Code is 
amended by striking ‘‘(except section 248)’’. 
(I) Section 857(b)(2)(A) of such Code is 
amended by striking ‘‘(except section 248)’’. 
(J) Section 1363(b) of such Code is amended 
by adding ‘‘and’’ at the end of paragraph (2), by 
striking paragraph (3), and by redesignating para-
graph (4) as paragraph (3). 
(K) Section 1375(b)(1)(B)(i) of such Code is 
amended by striking ‘‘(other than the deduction al-
lowed by section 248, relating to organization ex-
penditures)’’. 
(2)(A) Section 709 of such Code is amended to 
read as follows: 
‘‘SEC. 709. TREATMENT OF SYNDICATION FEES. 
‘‘No deduction shall be allowed under this chapter to 
a partnership or to any partner of the partnership for any 
amounts paid or incurred to promote the sale of (or to 
sell) an interest in the partnership.’’. 
(B) The item relating to section 709 in the 
table of sections for part I of subchapter K of chap-
ter 1 of such Code is amended to read as follows: 
‘‘Sec. 709. Treatment of syndication fees.’’. 
(3) Section 1202(e)(2)(A) of such Code is 
amended by striking ‘‘section 195(c)(1)(A)’’ and in-
serting ‘‘section 195(d)(1)(A)’’. 
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(4) The item relating to section 195 in the table 
of contents of part VI of subchapter B of chapter 1 
of such Code is amended to read as follows: 
‘‘Sec. 195. Start-up and organizational expenditures.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to expenditures paid or incurred 
in connection with active trades or businesses which begin 
in taxable years beginning after December 31, 2022. 
SEC. 3. PRESERVATION OF START-UP NET OPERATING 
LOSSES AND TAX CREDITS AFTER OWNER-
SHIP CHANGE. 
(a) APPLICATION TO NET OPERATING LOSSES.— 
Section 382(d) of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new para-
graph: 
‘‘(4) EXCEPTION FOR START-UP LOSSES.— 
‘‘(A) IN GENERAL.—In the case of any net 
operating loss carryforward described in para-
graph (1)(A) which arose in a start-up period 
taxable year, the amount of such net operating 
loss carryforward otherwise taken into account 
under such paragraph shall be reduced by the 
net start-up loss determined with respect to the 
trade or business referred to in subparagraph 
(B)(i) for such start-up period taxable year. 
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year if only items of income, gain, de-
duction, and loss properly allocable to 
such trade or business were taken into 
account, bears to 
‘‘(II) the amount of the net oper-
ating loss determined for such start- 
up period taxable year. 
‘‘(ii) SPECIAL RULE FOR LAST TAX-
ABLE YEAR IN START-UP PERIOD.—In the 
case of any start-up period taxable year 
which ends after the close of the 3-year pe-
riod described in subparagraph (B)(i) with 
respect to any trade or business, the net 
start-up loss with respect to such trade or 
business for such start-up period taxable 
year shall be the same proportion of such 
loss (determined without regard to this 
clause) as the proportion of such start-up 
period taxable year which is on or before 
the last day of such period. 
‘‘(D) APPLICATION
TO
NET
OPERATING 
LOSS
ARISING
IN
YEAR
OF
OWNERSHIP 
CHANGE.—Subparagraph (A) shall apply to any 
net operating loss described in paragraph 
(1)(B) in the same manner as such subpara-
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graph 
applies 
to 
net 
operating 
loss 
carryforwards described in paragraph (1)(A), 
but by only taking into account the amount of 
such net operating loss (and the amount of the 
net start-up loss) which is allocable under para-
graph (1)(B) to the period described in such 
paragraph. Proper adjustment in the allocation 
of the net start-up loss under the preceding 
sentence shall be made in the case of a taxable 
year to which subparagraph (C)(ii) applies. 
‘‘(E) APPLICATION
TO
TAXABLE
YEARS 
WHICH ARE START-UP PERIOD TAXABLE YEARS 
WITH RESPECT TO MORE THAN 1 TRADE OR 
BUSINESS.—In the case of any net operating 
loss carryforward which arose in a taxable year 
which is a start-up period taxable year with re-
spect to more than 1 trade or business— 
‘‘(i) this paragraph shall be applied 
separately with respect to each such trade 
or business, and 
‘‘(ii) the aggregate reductions under 
subparagraph (A) shall not exceed such net 
operating loss carryforward. 
‘‘(F) CONTINUITY OF BUSINESS REQUIRE-
MENT.—If the new loss corporation does not 
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continue the trade or business referred to in 
subparagraph (B)(i) at all times during the 2- 
year period beginning on the change date, this 
paragraph shall not apply with respect to such 
trade or business. 
‘‘(G) CERTAIN
TITLE
OR
SIMILAR 
CASES.— 
‘‘(i) 
MULTIPLE
OWNERSHIP 
CHANGES.—In the case of a 2nd ownership 
change to which subsection (l)(5)(D) ap-
plies, this paragraph shall not apply for 
purposes of determining the pre-change 
loss with respect to such 2nd ownership 
change. 
‘‘(ii) CERTAIN
INSOLVENCY
TRANS-
ACTIONS.—If subsection (l)(6) applies for 
purposes of determining the value of the 
old loss corporation under subsection (e), 
this paragraph shall not apply. 
‘‘(H) NOT
APPLICABLE
TO
DISALLOWED 
INTEREST.—This paragraph shall not apply for 
purposes of applying the rules of paragraph (1) 
to the carryover of disallowed interest under 
paragraph (3). 
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‘‘(I) TRANSITION RULE.—This paragraph 
shall not apply with respect to any trade or 
business if the date on which such trade or 
business begins as an active trade or business 
(as determined under section 195(d)(2) without 
regard to subparagraph (B) thereof) is on or 
before January 31, 2023.’’. 
(b) APPLICATION TO EXCESS CREDITS.—Section 383 
of such Code is amended by redesignating subsection (e) 
as subsection (f) and by inserting after subsection (d) the 
following new subsection: 
‘‘(e) EXCEPTION FOR START-UP EXCESS CREDITS.— 
‘‘(1) IN GENERAL.—In the case of any unused 
general business credit of the corporation under sec-
tion 39 which arose in a start-up period taxable 
year, the amount of such unused general business 
credit otherwise taken into account under subsection 
(a)(2)(A) shall be reduced by the start-up excess 
credit determined with respect to any trade or busi-
ness referred to in section 382(d)(4)(B)(i) for such 
start-up period taxable year. 
‘‘(2) START-UP PERIOD TAXABLE YEAR.—For 
purposes of this subsection, the term ‘start-up pe-
riod taxable year’ has the meaning given such term 
in section 382(d)(4)(B). 
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‘‘(3) START-UP EXCESS CREDIT.—For purposes 
of this subsection, the term ‘start-up excess credit’ 
means, with respect to any trade or business re-
ferred to in section 382(d)(4)(B)(i) for any start-up 
period taxable year, the amount which bears the 
same ratio to the unused general business credit 
which arose in such start-up period taxable year 
as— 
‘‘(A) the amount of the general business 
credit which would have been determined for 
such start-up period taxable year if only credits 
properly allocable to such trade or business 
were taken into account, bears to 
‘‘(B) the amount of the general business 
credit determined for such start-up period tax-
able year. 
‘‘(4) APPLICATION OF CERTAIN RULES.—Rules 
similar to the rules of subparagraphs (C)(ii), (D), 
(E), and (F) of section 382(d)(4) shall apply for 
purposes of this subsection. 
‘‘(5) TRANSITION RULE.—This subsection shall 
not apply with respect to any trade or business if 
the date on which such trade or business begins as 
an active trade or business (as determined under 
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section 195(d)(2) without regard to subparagraph 
(B) thereof) is on or before January 31, 2023.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years ending after Janu-
ary 31, 2023. 
Æ 
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