I 
119TH CONGRESS 
1ST SESSION H. R. 3967 
To amend the Internal Revenue Code of 1986 to permanently allow a tax 
deduction at the time an investment in qualified property is made, 
and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 12, 2025 
Mr. GROTHMAN (for himself, Mr. MANN, Mr. ROSE, and Mr. RULLI) intro-
duced the following bill; which was referred to the Committee on Ways 
and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to permanently 
allow a tax deduction at the time an investment in quali-
fied property is made, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Cost Recovery and Ex-
pensing Acceleration to Transform the Economy and 
Jumpstart Opportunities for Businesses and Startups 
Act’’ or the ‘‘CREATE JOBS Act’’. 
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SEC. 2. PERMANENT FULL EXPENSING FOR QUALIFIED 
PROPERTY. 
(a) IN GENERAL.—Paragraph (6) of section 168(k) 
of the Internal Revenue Code of 1986 is amended to read 
as follows: 
‘‘(6) APPLICABLE PERCENTAGE.—For purposes 
of this subsection, the term ‘applicable percentage’ 
means, in the case of property placed in service (or, 
in the case of a specified plant described in para-
graph (5), a plant which is planted or grafted) after 
September 27, 2017, 100 percent.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 168(k) of the Internal Revenue 
Code of 1986 is amended— 
(A) in paragraph (2)— 
(i) in subparagraph (A)— 
(I) in clause (i)(V), by inserting 
‘‘and’’ at the end, 
(II) in clause (ii), by striking 
‘‘clause (ii) of subparagraph (E), 
and’’ and inserting ‘‘clause (i) of sub-
paragraph (E).’’, and 
(III) by striking clause (iii), 
(ii) in subparagraph (B)— 
(I) in clause (i)— 
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(aa) by striking subclauses 
(II) and (III), and 
(bb) by redesignating sub-
clauses (IV) through (VI) as sub-
clauses (II) through (IV), respec-
tively, 
(II) by striking clause (ii), and 
(III) by redesignating clauses 
(iii) and (iv) as clauses (ii) and (iii), 
respectively, 
(iii) in subparagraph (C)— 
(I) in clause (i), by striking ‘‘and 
subclauses (II) and (III) of subpara-
graph (B)(i)’’, and 
(II) in clause (ii), by striking 
‘‘subparagraph (B)(iii)’’ and inserting 
‘‘subparagraph (B)(ii)’’, and 
(iv) in subparagraph (E)— 
(I) by striking clause (i), and 
(II) by redesignating clauses (ii) 
and (iii) as clauses (i) and (ii), respec-
tively, and 
(B) in paragraph (5)(A), by striking 
‘‘planted before January 1, 2027, or is grafted 
before such date to a plant that has already 
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been planted,’’ and inserting ‘‘planted or graft-
ed’’. 
(2) Section 460(c)(6)(B) of such Code is 
amended by striking ‘‘which’’ and all that follows 
through the period and inserting ‘‘which has a recov-
ery period of 7 years or less.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect as if included in section 
13201 of Public Law 115–97. 
SEC. 3. NEUTRAL COST RECOVERY DEPRECIATION ADJUST-
MENT FOR RESIDENTIAL RENTAL PROPERTY 
AND NONRESIDENTIAL REAL PROPERTY. 
(a) IN GENERAL.—Section 168 of the Internal Rev-
enue Code of 1986 is amended by adding at the end there-
of the following new subsection: 
‘‘(n) NEUTRAL COST RECOVERY DEPRECIATION AD-
JUSTMENT FOR RESIDENTIAL RENTAL PROPERTY AND 
NONRESIDENTIAL REAL PROPERTY.— 
‘‘(1) IN GENERAL.—In the case of any applica-
ble property, the deduction under this section with 
respect to such property for any taxable year after 
the taxable year during which the property is placed 
in service shall be— 
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‘‘(A) the amount determined under this 
section for such taxable year without regard to 
this subsection, multiplied by 
‘‘(B) the applicable neutral cost recovery 
ratio for such taxable year. 
‘‘(2) APPLICABLE
NEUTRAL
COST
RECOVERY 
RATIO.—For purposes of paragraph (1), the applica-
ble neutral cost recovery ratio for the applicable 
property for any taxable year is the number deter-
mined by— 
‘‘(A) dividing— 
‘‘(i) 
the 
gross 
domestic 
product 
deflator for the calendar quarter ending in 
such taxable year which corresponds to the 
calendar quarter during which the property 
was placed in service by the taxpayer, by 
‘‘(ii) the gross domestic product 
deflator for the calendar quarter during 
which the property was placed in service by 
the taxpayer, and 
‘‘(B) then multiplying the number deter-
mined under subparagraph (A) by the number 
equal to 1.03 to the nth power where ‘n’ is the 
number of full years in the period beginning on 
the 1st day of the calendar quarter during 
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which the property was placed in service by the 
taxpayer and ending on the day before the be-
ginning of the corresponding calendar quarter 
ending during such taxable year. 
The applicable neutral cost recovery ratio shall never 
be less than 1. The applicable neutral cost recovery 
ratio shall be rounded to the nearest 1⁄1000. 
‘‘(3) SPECIAL
RULE
FOR
EXISTING
PROP-
ERTY.—In the case of any applicable property which 
is placed in service before the date of enactment of 
this subsection, subparagraphs (A)(ii) and (B) of 
paragraph (2) shall be applied by substituting ‘cal-
endar quarter which includes the date of enactment 
of this subsection’ for ‘calendar quarter during 
which the property was placed in service by the tax-
payer’ each place it appears. 
‘‘(4) GROSS DOMESTIC PRODUCT DEFLATOR.— 
For purposes of paragraph (2), the gross domestic 
product deflator for any calendar quarter is the im-
plicit price deflator for the gross domestic product 
for such quarter (as shown in the first revision 
thereof). 
‘‘(5) ELECTION
NOT
TO
HAVE
SUBSECTION 
APPLY.—This subsection shall not apply to any ap-
plicable property if the taxpayer elects not to have 
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this subsection apply to such property. Such an elec-
tion, once made, shall be irrevocable. 
‘‘(6) ADDITIONAL DEDUCTION NOT TO AFFECT 
BASIS OR RECAPTURE.— 
‘‘(A) 
IN
GENERAL.—The 
additional 
amount determined under this section by reason 
of this subsection shall not be taken into ac-
count in determining the adjusted basis of any 
applicable property or of any interest in a pass- 
thru entity which holds such property and shall 
not be treated as a deduction for depreciation 
for purposes of sections 1245 and 1250. 
‘‘(B) PASS-THRU ENTITY DEFINED.—For 
purposes of subparagraph (A), the term ‘pass- 
thru entity’ means— 
‘‘(i) a regulated investment company, 
‘‘(ii) a real estate investment trust, 
‘‘(iii) an S corporation, 
‘‘(iv) a partnership, 
‘‘(v) an estate or trust, and 
‘‘(vi) a common trust fund. 
‘‘(7) APPLICABLE PROPERTY.—For purposes of 
this subsection, the term ‘applicable property’ means 
residential rental property or nonresidential real 
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property (as such terms are defined in subsection 
(e)(2)).’’. 
(b) MINIMUM TAX TREATMENT.—Paragraph (1) of 
section 56(a) of the Internal Revenue Code of 1986 is 
amended by adding at the end thereof the following new 
subparagraph: 
‘‘(E) USE OF NEUTRAL COST RECOVERY 
RATIO.—In the case of property to which sec-
tion 168(n) applies, the deduction allowable 
under this paragraph with respect to such prop-
erty for any taxable year (after the taxable year 
during which the property is placed in service) 
shall be— 
‘‘(i) the amount so allowable for such 
taxable year without regard to this sub-
paragraph, multiplied by 
‘‘(ii) the applicable neutral cost recov-
ery ratio for such taxable year (as deter-
mined under section 168(n)). 
This subparagraph shall not apply to any prop-
erty with respect to which there is an election 
in effect not to have section 168(n) apply.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service be-
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fore, on, or after the date of the enactment of this Act, 
with respect to taxable years ending on or after such date. 
SEC. 4. ELIMINATION OF AMORTIZATION OF RESEARCH 
AND EXPERIMENTAL EXPENDITURES. 
(a) IN GENERAL.—Section 174 of the Internal Rev-
enue Code of 1986 is amended to read as follows: 
‘‘SEC. 174. RESEARCH AND EXPERIMENTAL EXPENDITURES. 
‘‘(a) TREATMENT AS EXPENSES.— 
‘‘(1) IN GENERAL.—A taxpayer may treat re-
search or experimental expenditures which are paid 
or incurred by him during the taxable year in con-
nection with his trade or business as expenses which 
are not chargeable to capital account. The expendi-
tures so treated shall be allowed as a deduction. 
‘‘(2) WHEN METHOD MAY BE ADOPTED.— 
‘‘(A) WITHOUT
CONSENT.—A taxpayer 
may, without the consent of the Secretary, 
adopt the method provided in this subsection 
for his first taxable year for which expenditures 
described in paragraph (1) are paid or incurred. 
‘‘(B) WITH CONSENT.—A taxpayer may, 
with the consent of the Secretary, adopt at any 
time the method provided in this subsection. 
‘‘(3) SCOPE.—The method adopted under this 
subsection shall apply to all expenditures described 
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in paragraph (1). The method adopted shall be ad-
hered to in computing taxable income for the taxable 
year and for all subsequent taxable years unless, 
with the approval of the Secretary, a change to a 
different method is authorized with respect to part 
or all of such expenditures. 
‘‘(b) AMORTIZATION OF CERTAIN RESEARCH AND 
EXPERIMENTAL EXPENDITURES.— 
‘‘(1) IN GENERAL.—At the election of the tax-
payer, made in accordance with regulations pre-
scribed by the Secretary, research or experimental 
expenditures which are— 
‘‘(A) paid or incurred by the taxpayer in 
connection with his trade or business, 
‘‘(B) not treated as expenses under sub-
section (a), and 
‘‘(C) chargeable to capital account but not 
chargeable to property of a character which is 
subject to the allowance under section 167 (re-
lating to allowance for depreciation, etc.) or sec-
tion 611 (relating to allowance for depletion), 
may be treated as deferred expenses. In computing 
taxable income, such deferred expenses shall be al-
lowed as a deduction ratably over such period of not 
less than 60 months as may be selected by the tax-
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payer (beginning with the month in which the tax-
payer first realizes benefits from such expenditures). 
Such deferred expenses are expenditures properly 
chargeable to capital account for purposes of section 
1016(a)(1) (relating to adjustments to basis of prop-
erty). 
‘‘(2) TIME FOR AND SCOPE OF ELECTION.—The 
election provided by paragraph (1) may be made for 
any taxable year, but only if made not later than the 
time prescribed by law for filing the return for such 
taxable year (including extensions thereof). The 
method so elected, and the period selected by the 
taxpayer, shall be adhered to in computing taxable 
income for the taxable year for which the election is 
made and for all subsequent taxable years unless, 
with the approval of the Secretary, a change to a 
different method (or to a different period) is author-
ized with respect to part or all of such expenditures. 
The election shall not apply to any expenditure paid 
or incurred during any taxable year before the tax-
able year for which the taxpayer makes the election. 
‘‘(c) LAND AND OTHER PROPERTY.—This section 
shall not apply to any expenditure for the acquisition or 
improvement of land, or for the acquisition or improve-
ment of property to be used in connection with the re-
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search or experimentation and of a character which is sub-
ject to the allowance under section 167 (relating to allow-
ance for depreciation, etc.) or section 611 (relating to al-
lowance for depletion); but for purposes of this section al-
lowances under section 167, and allowances under section 
611, shall be considered as expenditures. 
‘‘(d) EXPLORATION EXPENDITURES.—This section 
shall not apply to any expenditure paid or incurred for 
the purpose of ascertaining the existence, location, extent, 
or quality of any deposit of ore or other mineral (including 
oil and gas). 
‘‘(e) ONLY REASONABLE RESEARCH EXPENDITURES 
ELIGIBLE.—This section shall apply to a research or ex-
perimental expenditure only to the extent that the amount 
thereof is reasonable under the circumstances. 
‘‘(f) CROSS REFERENCES.— 
‘‘(1) For adjustments to basis of property for 
amounts allowed as deductions as deferred expenses 
under subsection (b), see section 1016(a)(14). 
‘‘(2) For election of 10-year amortization of ex-
penditures allowable as a deduction under subsection 
(a), see section 59(e).’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for part VI of subchapter B of chapter 1 of such Code 
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is amended by striking the item relating to section 174 
and inserting the following new item: 
‘‘Sec. 174. Research and experimental expenditures’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 41(d)(1)(A) of such Code is amend-
ed by striking ‘‘specified research or experimental 
expenditures under section 174’’ and inserting ‘‘ex-
penses under section 174’’. 
(2) Section 280C(c) of such Code is amended to 
read as follows: 
‘‘(c) CREDIT FOR INCREASING RESEARCH ACTIVI-
TIES.— 
‘‘(1) IN GENERAL.—No deduction shall be al-
lowed for that portion of the qualified research ex-
penses (as defined in section 41(b)) or basic re-
search expenses (as defined in section 41(e)(2)) oth-
erwise allowable as a deduction for the taxable year 
which is equal to the amount of the credit deter-
mined for such taxable year under section 41(a). 
‘‘(2) SIMILAR
RULE
WHERE
TAXPAYER
CAP-
ITALIZES RATHER THAN DEDUCTS EXPENSES.—If— 
‘‘(A) the amount of the credit determined 
for the taxable year under section 41(a)(1), ex-
ceeds 
‘‘(B) the amount allowable as a deduction 
for such taxable year for qualified research ex-
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penses or basic research expenses (determined 
without regard to paragraph (1)), 
the amount chargeable to capital account for the 
taxable year for such expenses shall be reduced by 
the amount of such excess. 
‘‘(3) ELECTION OF REDUCED CREDIT.— 
‘‘(A) IN
GENERAL.—In the case of any 
taxable year for which an election is made 
under this paragraph— 
‘‘(i) paragraphs (1) and (2) shall not 
apply, and 
‘‘(ii) the amount of the credit under 
section 41(a) shall be the amount deter-
mined under subparagraph (B). 
‘‘(B) AMOUNT OF REDUCED CREDIT.—The 
amount of credit determined under this sub-
paragraph for any taxable year shall be the 
amount equal to the excess of— 
‘‘(i) the amount of credit determined 
under section 41(a) without regard to this 
paragraph, over 
‘‘(ii) the product of— 
‘‘(I) the amount described in 
clause (i), and 
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‘‘(II) the rate of tax under sec-
tion 11(b). 
‘‘(C) ELECTION.—An election under this 
paragraph for any taxable year shall be made 
not later than the time for filing the return of 
tax for such year (including extensions), shall 
be made on such return, and shall be made in 
such manner as the Secretary may prescribe. 
Such an election, once made, shall be irrev-
ocable. 
‘‘(4) CONTROLLED GROUPS.—Paragraph (3) of 
subsection (b) shall apply for purposes of this sub-
section.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to amounts paid or incurred in tax-
able years beginning after December 31, 2021. 
Æ 
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