sections (c) and (d) as subsections (d) and (e), respec-
tively, and by striking all that precedes subsection (d) (as 
so redesignated) and inserting the following: 
‘‘SEC. 195. START-UP AND ORGANIZATIONAL EXPENDI-
TURES. 
‘‘(a) CAPITALIZATION OF EXPENDITURES.—Except 
as otherwise provided in this section, no deduction shall 
be allowed for start-up or organizational expenditures. 
‘‘(b) ELECTION TO DEDUCT.— 
‘‘(1) IN GENERAL.—If a taxpayer elects the ap-
plication of this subsection with respect to any active 
trade or business— 
‘‘(A) the taxpayer shall be allowed a deduc-
tion for the taxable year in which such active 
trade or business begins in an amount equal to 
the lesser of— 
‘‘(i) the aggregate amount of start-up 
and organizational expenditures paid or in-
curred in connection with such active trade 
or business, or 
‘‘(ii) $20,000, reduced (but not below 
zero) by the amount by which such aggre-
gate amount exceeds $120,000, and 
‘‘(B) the remainder of such start-up and 
organizational expenditures shall be charged to 
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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, 
2021, 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 2020’ 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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