864 
ary 20, 2025,’’ after ‘‘Except as otherwise 
provided in this paragraph’’ , and 
(ii) by striking ‘‘and’’ at the end of 
clause (iv), by striking the period at the 
end of clause (v) and inserting ‘‘, and’’, 
and by adding at the end the following new 
clause: 
‘‘(vi) in the case of property placed in 
service after December 31, 2026, 0 per-
cent.’’, 
(B) in subparagraph (B)— 
(i) by striking ‘‘In the case of prop-
erty described’’ and inserting ‘‘In the case 
of property acquired by the taxpayer before 
January 20, 2025 and described’’, and 
(ii) by striking ‘‘and’’ at the end of 
clause (iv), by striking the period at the 
end of clause (v) and inserting ‘‘, and’’, 
and by adding at the end the following new 
clause: 
‘‘(vi) in the case of property placed in 
service after December 31, 2027, 0 per-
cent.’’, 
(C) in subparagraph (C), by inserting 
‘‘and’’ at the end of clause (iii), by striking 
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865 
clauses (iv) and (v), and by adding at the end 
the following new clause: 
‘‘(iv) in the case of a plant which is 
planted or grafted after January 19, 2025, 
and before January 1, 2030, 100 per-
cent.’’, and 
(D) by adding at the end the following new 
subparagraph: 
‘‘(D) RULE
FOR
PROPERTY
ACQUIRED 
AFTER JANUARY 19, 2025.— 
‘‘(i) IN
GENERAL.—In the case of 
property acquired by the taxpayer after 
January 19, 2025 and placed in service 
after such date and before January 1, 
2030 (January 1, 2031, in the case of 
property described in subparagraph (B) or 
(C) of paragraph (2)), the term ‘applicable 
percentage’ means 100 percent. 
‘‘(ii) ACQUISITION DATE DETERMINA-
TION.—For purposes of clause (i), property 
shall not be treated as acquired after the 
date on which a written binding contract is 
entered into for such acquisition.’’. 
(b) 
CONFORMING
AMENDMENT.—Section 
460(c)(6)(B) is amended by striking ‘‘which’’ and all that 
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866 
follows through the period and inserting ‘‘which has a re-
covery period of 7 years or less.’’. 
(c) EFFECTIVE DATES.— 
(1) IN GENERAL.—Except as provided by para-
graph (2), the amendments made by this section 
shall apply to property acquired after January 19, 
2025 and placed in service after such date. 
(2) SPECIFIED
PLANTS.—The amendments 
made by this section shall apply to specified plants 
planted or grafted after January 19, 2025. 
SEC. 111002. DEDUCTION OF DOMESTIC RESEARCH AND EX-
PERIMENTAL EXPENDITURES. 
(a) SUSPENSION OF AMORTIZATION FOR DOMESTIC 
RESEARCH AND EXPERIMENTAL EXPENDITURES.—Sec-
tion 174 is amended by adding at the end the following 
new subsection: 
‘‘(e) SUSPENSION OF APPLICATION TO DOMESTIC 
RESEARCH AND EXPERIMENTAL EXPENDITURES.—In the 
case of any domestic research or experimental expendi-
tures (as defined in section 174A(b)), this section shall 
not apply to such expenditures paid or incurred in taxable 
years beginning after December 31, 2024, and before Jan-
uary 1, 2030.’’. 
(b) REINSTATEMENT OF EXPENSING FOR DOMESTIC 
RESEARCH AND EXPERIMENTAL EXPENDITURES.—Part 
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867 
VI of subchapter B of chapter 1 is amended by inserting 
after section 174 the following new section: 
‘‘SEC. 174A. TEMPORARY RULES FOR DOMESTIC RESEARCH 
AND EXPERIMENTAL EXPENDITURES. 
‘‘(a) TREATMENT AS EXPENSES.—Notwithstanding 
section 263, there shall be allowed as a deduction any do-
mestic research or experimental expenditures which are 
paid or incurred by the taxpayer during the taxable year. 
‘‘(b) DOMESTIC RESEARCH OR EXPERIMENTAL EX-
PENDITURES.—For purposes of this section, the term ‘do-
mestic research or experimental expenditures’ means re-
search or experimental expenditures paid or incurred by 
the taxpayer in connection with the taxpayer’s trade or 
business other than such expenditures which are attrib-
utable to foreign research (within the meaning of section 
41(d)(4)(F)). 
‘‘(c) AMORTIZATION
OF CERTAIN DOMESTIC RE-
SEARCH AND EXPERIMENTAL EXPENDITURES.— 
‘‘(1) IN GENERAL.—At the election of the tax-
payer, made in accordance with regulations or other 
guidance provided by the Secretary, in the case of 
domestic research or experimental expenditures 
which would (but for subsection (a)) be chargeable 
to capital account but not chargeable to property of 
a character which is subject to the allowance under 
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868 
section 167 (relating to allowance for depreciation, 
etc.) or section 611 (relating to allowance for deple-
tion), subsection (a) shall not apply and the tax-
payer shall— 
‘‘(A) charge such expenditures to capital 
account, and 
‘‘(B) be allowed an amortization deduction 
of such expenditures ratably over such period of 
not less than 60 months as may be selected by 
the taxpayer (beginning with the midpoint of 
the taxable year in which such expenditures are 
paid or incurred). 
‘‘(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 
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869 
or incurred during any taxable year before the tax-
able year for which the taxpayer makes the election. 
‘‘(d) SPECIAL RULES.— 
‘‘(1) LAND AND OTHER PROPERTY.—This sec-
tion shall not apply to any expenditure for the acqui-
sition or improvement of land, or for the acquisition 
or improvement of property to be used in connection 
with the research or experimentation and of a char-
acter which is subject to the allowance under section 
167 (relating to allowance for depreciation, etc.) or 
section 611 (relating to allowance for depletion); but 
for purposes of this section allowances under section 
167, and allowances under section 611, shall be con-
sidered as expenditures. 
‘‘(2) EXPLORATION EXPENDITURES.—This sec-
tion shall not apply to any expenditure paid or in-
curred for the purpose of ascertaining the existence, 
location, extent, or quality of any deposit of ore or 
other mineral (including oil and gas). 
‘‘(3) SOFTWARE DEVELOPMENT.—For purposes 
of this section, any amount paid or incurred in con-
nection with the development of any software shall 
be treated as a research or experimental expendi-
ture. 
‘‘(e) TERMINATION.— 
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870 
‘‘(1) IN GENERAL.—This section shall not apply 
to amounts paid or incurred in taxable years begin-
ning after December 31, 2029. 
‘‘(2) CHANGE IN METHOD OF ACCOUNTING.—In 
the case of a taxpayer’s first taxable year beginning 
after December 31, 2029, paragraph (1) (and the 
corresponding application of section 174) shall be 
treated as a change in method of accounting for pur-
poses of section 481 and— 
‘‘(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 applied only on 
a cut-off basis for any domestic research or ex-
perimental expenditures paid or incurred in tax-
able years beginning after December 31, 2029, 
and no adjustment under section 481(a) shall 
be made.’’. 
(c) TREATMENT OF FOREIGN RESEARCH OR EXPERI-
MENTAL EXPENDITURES UPON DISPOSITION.—Section 
174(d) is amended by inserting ‘‘or reduction to amount 
realized’’ after ‘‘no deduction’’. 
(d) COORDINATION WITH CERTAIN OTHER PROVI-
SIONS.— 
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871 
(1) RESEARCH CREDIT.— 
(A) Section 41(d)(1)(A) is amended by in-
serting ‘‘or domestic research or experimental 
expenditures under section 174A’’ after ‘‘sec-
tion 174’’. 
(B) Section 280C(c) is amended by adding 
at the end the following new paragraph: 
‘‘(4) DOMESTIC RESEARCH OR EXPERIMENTAL 
EXPENDITURES.—The domestic research or experi-
mental expenditures otherwise taken into account 
under section 174A shall be reduced by the amount 
of the credit allowed under section 41(a).’’. 
(C) Section 280C(c) is amended— 
(i) in paragraph (1)(B)— 
(I) by striking ‘‘a deduction’’ and 
inserting ‘‘an amortization deduc-
tion’’, and 
(II) by inserting ‘‘under section 
174’’ after ‘‘basic research expenses’’, 
and 
(ii) in paragraph (2)(A)(i), by striking 
‘‘paragraph (1)’’ and inserting ‘‘para-
graphs (1) and (4)’’. 
(2) AMT ADJUSTMENT.—Section 56(b)(2) is 
amended— 
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872 
(A) by striking ‘‘174(a)’’ each place it ap-
pears and inserting ‘‘174A(a)’’, and 
(B) by adding at the end of subparagraph 
(A) the following new flush sentence: 
‘‘In the case of research and experimental ex-
penditures charged to capital account and am-
ortized under section 174 or 174A, such 
amounts shall be amortized for purposes of this 
subsection as provided in clause (ii).’’. 
(3) OPTIONAL
10-YEAR
WRITEOFF.—Section 
59(e)(2)(B) is amended by striking ‘‘section 174(a) 
(relating to research and experimental expendi-
tures)’’ and inserting ‘‘section 174A(a) (relating to 
temporary rules for domestic research and experi-
mental expenditures)’’. 
(4) QUALIFIED SMALL ISSUE BONDS.—Section 
144(a)(4)(C)(iv) is amended by inserting ‘‘or 
174A(a)’’ after ‘‘174(a)’’. 
(5) 
START-UP
EXPENDITURES.—Section 
195(c)(1) is amended by striking ‘‘or 174’’ in the 
last sentence and inserting ‘‘174, or 174A’’. 
(6) CAPITAL EXPENDITURES.— 
(A) Section 263(a)(1)(B) is amended by 
inserting ‘‘ or 174A’’ after ‘‘174’’. 
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873 
(B) Section 263A(c)(2) is amended by in-
serting ‘‘or 174A’’ after ‘‘174’’. 
(7) ACTIVE
BUSINESS
COMPUTER
SOFTWARE 
ROYALTIES.—Section 543(d)(4)(A)(i) is amended by 
inserting ‘‘174A,’’ after ‘‘174,’’. 
(8) SOURCE
RULES.—Section 864(g)(2) is 
amended in the last sentence— 
(A) by striking ‘‘treated as deferred ex-
penses under subsection (b) of section 174’’ and 
inserting ‘‘allowed as an amortization deduction 
under section 174(a) or section 174A(c),’’, and 
(B) by striking ‘‘such subsection’’ and in-
serting ‘‘such section (as the case may be)’’. 
(9) BASIS ADJUSTMENT.—Section 1016(a)(14) 
is amended by striking ‘‘deductions as deferred ex-
penses under section 174(b)(1) (relating to research 
and experimental expenditures)’’ and inserting ‘‘de-
ductions under section 174 or 174A(c)’’. 
(10) 
SMALL
BUSINESS
STOCK.—Section 
1202(e)(2)(B) is amended by striking ‘‘research and 
experimental expenditures under section 174’’ and 
inserting ‘‘specified research or experimental expend-
itures under section 174 or domestic research or ex-
perimental expenditures under section 174A’’. 
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874 
(e) CLERICAL AMENDMENT.—The table of sections 
for part VI of subchapter B of chapter 1 is amended by 
inserting after the item relating to section 174 the fol-
lowing new item: 
‘‘Sec. 174A. Temporary rules for domestic research and experimental expendi-
tures.’’. 
(f) EFFECTIVE DATE AND SPECIAL RULE.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by 
this section shall apply to amounts paid or incurred 
in taxable years beginning after December 31, 2024. 
(2) TREATMENT
OF
FOREIGN
RESEARCH
OR 
EXPERIMENTAL
EXPENDITURES
UPON
DISPOSI-
TION.—The amendment made by subsection (c) shall 
apply to property disposed, retired, or abandoned 
after May 12, 2025. 
(3) COORDINATION WITH RESEARCH CREDIT.— 
The amendments made by subparagraphs (B) and 
(C) of subsection (d)(1) shall apply to taxable years 
beginning after December 31, 2024. 
(4) SPECIAL
RULE
FOR
SHORT
TAXABLE 
YEARS.—The Secretary of the Treasury may pre-
scribe such rules as are necessary or appropriate to 
provide for the application of the amendments made 
by this section in the case of any taxable year of less 
than 12 months that begins after December 31, 
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875 
2024, and ends before the date of the enactment of 
this Act. 
(5) CHANGE
IN
METHOD
OF
ACCOUNTING.— 
The amendments made by this section shall be treat-
ed as a change in method of accounting for purposes 
of section 481 of the Internal Revenue Code of 1986 
and— 
(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 applied only on a 
cut-off basis for any research or experimental 
expenditures paid or incurred in taxable years 
beginning after December 31, 2024, and no ad-
justments under section 481(a) shall be made. 
(6) NO INFERENCE.—The amendments made 
by subparagraphs (B) and (C) of subsection (d)(1) 
shall not be construed to create any inference with 
respect to the proper application of section 280C(c) 
of the Internal Revenue Code of 1986 with respect 
to taxable years beginning before January 1, 2025. 
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876 
SEC. 111003. MODIFIED CALCULATION OF ADJUSTED TAX-
ABLE INCOME FOR PURPOSES OF BUSINESS 
INTEREST DEDUCTION. 
(a) IN GENERAL.—Section 163(j)(8)(A)(v) is amend-
ed by striking ‘‘beginning before January 1, 2022’’ and 
inserting ‘‘beginning after December 31, 2024 and before 
January 1, 2030’’. 
(b) FLOOR PLAN FINANCING APPLICABLE TO CER-
TAIN TRAILERS AND CAMPERS.—Section 163(j)(9)(C) is 
amended by adding at the end the following new flush sen-
tence: 
‘‘Such term shall also include any trailer or 
camper which is designed to provide temporary 
living quarters for recreational, camping, or 
seasonal use and is designed to be towed by, or 
affixed to, a motor vehicle.’’. 
(c) EFFECTIVE DATE AND SPECIAL RULE.— 
(1) IN GENERAL.—The amendments made by 
this section shall apply to taxable years beginning 
after December 31, 2024. 
(2) SPECIAL
RULE
FOR
SHORT
TAXABLE 
YEARS.—The Secretary of the Treasury may pre-
scribe such rules as are necessary or appropriate to 
provide for the application of the amendments made 
by this section in the case of any taxable year of less 
than 12 months that begins after December 31, 
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877 
2024, and ends before the date of the enactment of 
this Act. 
SEC. 111004. EXTENSION OF DEDUCTION FOR FOREIGN-DE-
RIVED INTANGIBLE INCOME AND GLOBAL IN-
TANGIBLE LOW-TAXED INCOME. 
(a) IN GENERAL.—Section 250(a) is amended by 
striking paragraph (3). 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
SEC. 111005. EXTENSION OF BASE EROSION MINIMUM TAX 
AMOUNT. 
(a) IN GENERAL.—Section 59A(b) is amended by 
striking paragraph (2) and by redesignating paragraphs 
(3) and (4) as paragraphs (2) and (3), respectively. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 59A(b)(1) is amended by striking 
‘‘Except as provided in paragraphs (2) and (3)’’ and 
inserting ‘‘Except as provided in paragraph (2)’’. 
(2) Section 59A(b)(2), as redesignated by sub-
section (a)(2), is amended by striking ‘‘the percent-
age otherwise in effect under paragraphs (1)(A) and 
(2)(A) shall each be increased’’ and inserting ‘‘the 
percentages otherwise in effect under paragraph 
(1)(A) shall be increased’’. 
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878 
(3) Section 59A(e)(1)(C) is amended by strik-
ing ‘‘in the case of a taxpayer described in sub-
section (b)(3)(B)’’ and inserting ‘‘in the case of a 
taxpayer described in subsection (b)(2)(B)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
PART 2—ADDITIONAL TAX RELIEF FOR RURAL 
AMERICA AND MAIN STREET 
SEC. 111101. SPECIAL DEPRECIATION ALLOWANCE FOR 
QUALIFIED PRODUCTION PROPERTY. 
(a) IN GENERAL.—Section 168 is amended by adding 
at the end the following new subsection: 
‘‘(n) SPECIAL ALLOWANCE FOR QUALIFIED PRODUC-
TION PROPERTY.— 
‘‘(1) IN GENERAL.—In the case of any qualified 
production property— 
‘‘(A) the depreciation deduction provided 
by section 167(a) for the taxable year in which 
such property is placed in service shall include 
an allowance equal to 100 percent of the ad-
justed basis of the qualified production prop-
erty, and 
‘‘(B) the adjusted basis of the qualified 
production property shall be reduced by the 
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879 
amount of such deduction before computing the 
amount otherwise allowable as a depreciation 
deduction under this chapter for such taxable 
year and any subsequent taxable year. 
‘‘(2) QUALIFIED PRODUCTION PROPERTY.—For 
purposes of this subsection— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
production property’ means that portion of any 
nonresidential real property— 
‘‘(i) to which this section applies, 
‘‘(ii) which is used by the taxpayer as 
an integral part of a qualified production 
activity, 
‘‘(iii) which is placed in service in the 
United States or any possession of the 
United States, 
‘‘(iv) the original use of which com-
mences with the taxpayer, 
‘‘(v) the construction of which begins 
after January 19, 2025, and before Janu-
ary 1, 2029, 
‘‘(vi) with respect to which the tax-
payer has elected the application of this 
subsection, and 
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880 
‘‘(vii) which is placed in service before 
January 1, 2033. 
‘‘(B) SPECIAL RULE FOR CERTAIN PROP-
ERTY
NOT
PREVIOUSLY
USED
IN
QUALIFIED 
PRODUCTION ACTIVITIES.— 
‘‘(i) IN
GENERAL.—In the case of 
property acquired by the taxpayer during 
the period described in subparagraph 
(A)(v), the requirements of clauses (iv) and 
(v) of subparagraph (A) shall be treated as 
satisfied if such property was not used in 
a qualified production activity (determined 
without regard to the second sentence of 
subparagraph (D)) by any person at any 
time during the period beginning on Janu-
ary 1, 2021, and ending on May 12, 2025. 
‘‘(ii) 
WRITTEN
BINDING
CON-
TRACTS.—For purposes of determining 
under clause (i)— 
‘‘(I) whether such property is ac-
quired before the period described in 
subparagraph (A)(v), such property 
shall be treated as acquired not later 
than the date on which the taxpayer 
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881 
enters into a written binding contract 
for such acquisition, and 
‘‘(II) whether such property is 
acquired after such period, such prop-
erty shall be treated as acquired not 
earlier than such date. 
‘‘(C) 
EXCLUSION
OF
OFFICE
SPACE, 
ETC.—The term ‘qualified production property’ 
shall not include that portion of any nonresi-
dential real property which is used for offices, 
administrative services, lodging, parking, sales 
activities, research activities, software engineer-
ing activities, or other functions unrelated to 
manufacturing, production, or refining of tan-
gible personal property. 
‘‘(D) QUALIFIED PRODUCTION ACTIVITY.— 
The term ‘qualified production activity’ means 
the manufacturing, production, or refining of a 
qualified product. The activities of any taxpayer 
do not constitute manufacturing, production, or 
refining of a qualified product unless the activi-
ties of such taxpayer result in a substantial 
transformation of the property comprising the 
product. 
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882 
‘‘(E) PRODUCTION.—The term ‘produc-
tion’ shall not include activities other than agri-
cultural production and chemical production. 
‘‘(F) QUALIFIED
PRODUCT.—The term 
‘qualified product’ means any tangible personal 
property. 
‘‘(G) SYNDICATION.—For purposes of sub-
paragraph (A)(iv), rules similar to the rules of 
subsection (k)(2)(E)(iii) shall apply. 
‘‘(3) DEDUCTION
ALLOWED
IN
COMPUTING 
MINIMUM TAX.—For purposes of determining alter-
native minimum taxable income under section 55, 
the deduction under section 167 for qualified pro-
duction property shall be determined under this sec-
tion without regard to any adjustment under section 
56. 
‘‘(4) COORDINATION
WITH
CERTAIN
OTHER 
PROVISIONS.— 
‘‘(A) OTHER SPECIAL DEPRECIATION AL-
LOWANCES.—The term ‘qualified production 
property’ shall not include any property to 
which subsection (k), (l), or (m) applies. For 
purposes of subsections (k)(7), (l)(3)(D), and 
(m)(2)(B)(iii), qualified production property to 
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883 
which this subsection applies shall be treated as 
a separate class of property. 
‘‘(B) ALTERNATIVE DEPRECIATION PROP-
ERTY.—The term ‘qualified production prop-
erty’ shall not include any property to which the 
alternative depreciation system under sub-
section (g) applies. For purposes of subsection 
(g)(7)(A), qualified production property to 
which this subsection applies shall be treated as 
separate nonresidential real property. 
‘‘(5) RECAPTURE.—If, at any time during the 
10-year period beginning on the date that any quali-
fied production property is placed in service by the 
taxpayer, such property ceases to be used as de-
scribed in paragraph (2)(A)(ii) and is used by the 
taxpayer in a productive use not described in para-
graph (2)(A)(ii)— 
‘‘(A) section 1245 shall be applied— 
‘‘(i) by treating such property as hav-
ing been disposed of by the taxpayer as of 
the first time such property is so used in 
a productive use not described in para-
graph (2)(A)(ii), and 
‘‘(ii) by treating the amount described 
in subparagraph (B) of section 1245(a)(1) 
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884 
with respect to such disposition as being 
not less than the amount described in sub-
paragraph (A) of such section, and 
‘‘(B) the basis of the taxpayer in such 
property, and the taxpayer’s allowance for de-
preciation with respect to such property, shall 
be appropriately adjusted to take into account 
amounts recognized by reason of subparagraph 
(A). 
‘‘(6) REGULATIONS.—The Secretary shall issue 
such regulations or other guidance as may be nec-
essary or appropriate to carry out the purposes of 
this subsection, including regulations or other guid-
ance— 
‘‘(A) regarding what constitutes a substan-
tial transformation of property, and 
‘‘(B) providing for the application of para-
graph (5) with respect to a change in use de-
scribed in such paragraph by a transferee fol-
lowing a fully or partially tax free transfer of 
qualified production property.’’. 
(b) TREATMENT OF QUALIFIED PRODUCTION PROP-
ERTY AS SECTION 1245 PROPERTY.—Section 1245(a)(3) 
is amended by striking ‘‘or’’ at the end of subparagraph 
(E), by striking the period at the end of subparagraph 
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(F) and inserting ‘‘, or’’, and by adding at the end the 
following new subparagraph: 
‘‘(G) any qualified production property (as 
defined in section 168(n)(2)).’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service after 
the date of the enactment of this Act. 
SEC. 111102. RENEWAL AND ENHANCEMENT OF OPPOR-
TUNITY ZONES. 
(a) MODIFICATION
OF LOW-INCOME COMMUNITY 
DEFINITION.—Section 1400Z–1(c)(1) is amended— 
(1) by striking ‘‘COMMUNITIES.—The term’’ 
and inserting the following: ‘‘COMMUNITIES.— 
‘‘(A) IN GENERAL.—The term’’, and 
(2) by adding at the end the following: 
‘‘(B) MODIFICATIONS.—For purposes of 
subparagraph (A), section 45D(e)(1) shall be 
applied in subparagraph (B) thereof, by sub-
stituting ‘70 percent’ for ‘80 percent’ each 
place it appears. 
‘‘(C) 
CERTAIN
CENSUS
TRACTS
DIS-
ALLOWED.—The term ‘low-income community’ 
shall not include any population census tract 
if— 
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886 
‘‘(i) in the case of a tract not located 
within a metropolitan area, the median 
family income for such tract is at least 125 
percent of statewide median family income, 
or 
‘‘(ii) in the case of a tract located 
within a metropolitan area, the median 
family income for such tract is at least 125 
percent of the metropolitan area median 
family income.’’. 
(b) NEW ROUND OF QUALIFIED OPPORTUNITY ZONE 
DESIGNATIONS.— 
(1) IN GENERAL.—Section 1400Z–1 is amended 
by adding at the end the following new subsection: 
‘‘(g) NEW ROUND
OF QUALIFIED OPPORTUNITY 
ZONE DESIGNATIONS.— 
‘‘(1) IN GENERAL.—In addition to designations 
under subsection (b), and under rules similar to the 
rules of such subsection, the Secretary shall des-
ignate tracts nominated by the chief executive offi-
cers of States for purposes of this section. 
‘‘(2) NUMBER OF DESIGNATIONS; PROPORTION 
OF RURAL AREAS DESIGNATED.— 
‘‘(A) IN
GENERAL.—Of the low-income 
communities within a State, the Secretary may 
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887 
designate under this subsection not more than 
25 percent as qualified opportunity zones, of 
which at least the lesser of the following shall 
be qualified opportunity zones which are com-
prised entirely of a rural area: 
‘‘(i) The applicable percentage of the 
total number of qualified opportunity zone 
designations which may be made within 
the State under this subsection. 
‘‘(ii) All low-income communities with-
in the State which are comprised entirely 
of a rural area. 
‘‘(B) 
APPLICABLE
PERCENTAGE.—For 
purposes of this paragraph, the applicable per-
centage shall be, for any calendar year during 
which a designation is made, the greater of— 
‘‘(i) 33 percent, or 
‘‘(ii) the percentage of the United 
States population living within a rural area 
for the preceding calendar year. 
‘‘(3) RURAL
AREA.—Whether a low-income 
community is comprised entirely of a rural area shall 
be determined by the Secretary in consultation with 
the Secretary of Agriculture. For purposes of this 
subsection, the term ‘rural area’ has the meaning 
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888 
given such term by section 343(a)(13)(A) of the 
Consolidated Farm and Rural Development Act. 
‘‘(4) PERIOD FOR WHICH DESIGNATION IS IN 
EFFECT.—A designation as a qualified opportunity 
zone under this subsection shall remain in effect for 
the period beginning on January 1, 2027, and end-
ing on December 31, 2033. 
‘‘(5) CONTIGUOUS
TRACTS
NOT
ELIGIBLE.— 
Subsection (e) shall not apply to designations made 
under this subsection.’’. 
(2) ELECTION WITH RESPECT TO NEW ROUND 
OF ZONES.—Section 1400Z–2(a)(2)(B) is amended 
by striking ‘‘December 31, 2026’’ and inserting 
‘‘December 31, 2033’’. 
(3) YEAR
OF
INCLUSION.—Section 1400Z– 
2(b)(1)(B) is amended to read as follows: 
‘‘(B)(i) December 31, 2026, in the case of 
an amount invested before January 1, 2027, 
and 
‘‘(ii) December 31, 2033, in the case of an 
amount invested after December 31, 2026, and 
before January 1, 2034.’’. 
(4) WINDING
DOWN
INITIAL
ZONE
DESIGNA-
TIONS.—Section 1400Z–1(f) is amended— 
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889 
(A) by striking ‘‘and ending’’ and all that 
follows and inserting the following: ‘‘and ending 
on December 31, 2026.’’, and 
(B) by striking ‘‘A designation’’ and in-
serting ‘‘Except as provided in subsection 
(g)(4), a designation’’. 
(c) MODIFICATION OF OPPORTUNITY ZONE INVEST-
MENT INCENTIVES.— 
(1) CONSOLIDATED BASIS INCREASES; RURAL 
ZONE BASIS INCREASE.—Section 1400Z–2(b)(2)(B) 
is amended by adding at the end the following new 
clauses: 
‘‘(v) CONSOLIDATED BASIS INCREASE 
FOR INVESTMENTS AFTER 2026.—In the 
case of investments made after December 
31, 2026— 
‘‘(I) clauses (iii) and (iv) shall 
not apply, and 
‘‘(II) for any such investment 
held by the taxpayer for at least 5 
years, the basis of such adjustment 
shall be increased by an amount equal 
to 10 percent of the amount of gain 
deferred by reason of subsection 
(a)(1)(A). 
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890 
‘‘(vi) SPECIAL RULE FOR RURAL OP-
PORTUNITY
FUNDS.—Clause (v) shall be 
applied by substituting ‘30 percent’ for ‘10 
percent’ in the case of an investment in a 
qualified rural opportunity fund. 
‘‘(vii) 
QUALIFIED
RURAL
OPPOR-
TUNITY
FUND.—For purposes of clause 
(vi), a ‘qualified rural opportunity fund’ 
means a qualified opportunity fund that 
holds at least 90 percent of its assets in 
qualified 
opportunity 
zone 
property 
which— 
‘‘(I) is qualified opportunity zone 
business property substantially all of 
the use of which, during substantially 
all of the fund’s holding period for 
such property, was in a qualified op-
portunity zone comprised entirely of a 
rural area, or 
‘‘(II) is qualified opportunity 
zone stock, or a qualified opportunity 
zone partnership interest, in a quali-
fied opportunity zone business in 
which substantially all of the tangible 
property owned or leased is qualified 
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891 
opportunity zone business property 
described in subsection (d)(3)(A)(i) 
and substantially all the use of which 
is in a qualified opportunity zone com-
prised entirely of a rural area. 
For purposes of the preceding sentence, 
property held in the fund shall be meas-
ured under rules similar to the rules of 
subsection (d)(1).’’. 
(2) LIMITED
TREATMENT
OF
ORDINARY
IN-
COME.—Section 1400Z–2(a) is amended by adding 
at the end the following new paragraph: 
‘‘(3) SPECIAL RULE FOR ORDINARY INCOME.— 
In the case of any ordinary income of the taxpayer 
for the taxable year— 
‘‘(A) the taxpayer may elect the applica-
tion of paragraph (1) with respect to so much 
of ordinary income as does not exceed $10,000 
(reduced by the amount of any income with re-
spect to which an election pursuant to this 
paragraph has previously been made), and 
‘‘(B) subsection (b)(2)(B) shall not apply 
to the investment with respect to such elec-
tion.’’. 
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892 
(3) SPECIAL RULE FOR IMPROVEMENT OF EX-
ISTING STRUCTURES IN RURAL AREAS, INCLUDING 
FOR DATA CENTERS.—Section 1400Z–2(d)(2)(D)(ii) 
is amended by inserting ‘‘(50 percent of such ad-
justed basis in the case of property in a qualified op-
portunity zone comprised entirely of a rural area)’’ 
after ‘‘the adjusted basis of such property’’. 
(d) INFORMATION REPORTING ON QUALIFIED OP-
PORTUNITY FUNDS
AND QUALIFIED RURAL OPPOR-
TUNITY FUNDS.— 
(1) FILING
REQUIREMENTS
FOR
FUNDS
AND 
INVESTORS.—Subpart A of part III of subchapter A 
of chapter 61 is amended by inserting after section 
6039J the following new sections: 
‘‘SEC. 6039K. RETURNS WITH RESPECT TO QUALIFIED OP-
PORTUNITY FUNDS AND QUALIFIED RURAL 
OPPORTUNITY FUNDS. 
‘‘(a) IN GENERAL.—Every qualified opportunity fund 
shall file an annual return (at such time and in such man-
ner as the Secretary may prescribe) containing the infor-
mation described in subsection (b). 
‘‘(b) INFORMATION FROM QUALIFIED OPPORTUNITY 
FUNDS.—The information described in this subsection 
is— 
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893 
‘‘(1) the name, address, and taxpayer identifica-
tion number of the qualified opportunity fund, 
‘‘(2) whether the qualified opportunity fund is 
organized as a corporation or a partnership, 
‘‘(3) the value of the total assets held by the 
qualified opportunity fund as of each date described 
in section 1400Z–2(d)(1), 
‘‘(4) the value of all qualified opportunity zone 
property held by the qualified opportunity fund on 
each such date, 
‘‘(5) with respect to each investment held by 
the qualified opportunity fund in qualified oppor-
tunity zone stock or a qualified opportunity zone 
partnership interest— 
‘‘(A) the name, address, and taxpayer 
identification number of the corporation in 
which such stock is held or the partnership in 
which such interest is held, as the case may be, 
‘‘(B) each North American Industry Clas-
sification System (NAICS) code that applies to 
the trades or businesses conducted by such cor-
poration or partnership, 
‘‘(C) the population census tracts in which 
the qualified opportunity zone business property 
of such corporation or partnership is located, 
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894 
‘‘(D) the amount of the investment in such 
stock or partnership interest as of each date de-
scribed in section 1400Z–2(d)(1), 
‘‘(E) the value of tangible property held by 
such corporation or partnership on each such 
date which is owned by such corporation or 
partnership, 
‘‘(F) the value of tangible property held by 
such corporation or partnership on each such 
date which is leased by such corporation or 
partnership, 
‘‘(G) the approximate number of residen-
tial units (if any) for any real property held by 
such corporation or partnership, and 
‘‘(H) the approximate average monthly 
number of full-time equivalent employees of 
such corporation or partnership for the year 
(within numerical ranges identified by the Sec-
retary) or such other indication of the employ-
ment impact of such corporation or partnership 
as determined appropriate by the Secretary, 
‘‘(6) with respect to the items of qualified op-
portunity zone business property held by the quali-
fied opportunity fund— 
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895 
‘‘(A) the North American Industry Classi-
fication System (NAICS) code that applies to 
the trades or businesses in which such property 
is held, 
‘‘(B) the population census tract in which 
the property is located, 
‘‘(C) whether the property is owned or 
leased, 
‘‘(D) the aggregate value of the items of 
qualified opportunity zone property held by the 
qualified opportunity fund as of each date de-
scribed in section 1400Z–2(d)(1), and 
‘‘(E) in the case of real property, number 
of residential units (if any), 
‘‘(7) the approximate average monthly number 
of full-time equivalent employees for the year of the 
trades or businesses of the qualified opportunity 
fund in which qualified opportunity zone business 
property is held (within numerical ranges identified 
by the Secretary) or such other indication of the em-
ployment impact of such trades or businesses as de-
termined appropriate by the Secretary, 
‘‘(8) with respect to each person who disposed 
of an investment in the qualified opportunity fund 
during the year— 
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896 
‘‘(A) the name and taxpayer identification 
number of such person, 
‘‘(B) the date or dates on which the invest-
ment disposed was acquired, and 
‘‘(C) the date or dates on which any such 
investment was disposed and the amount of the 
investment disposed, and 
‘‘(9) such other information as the Secretary 
may require. 
‘‘(c) STATEMENT REQUIRED TO BE FURNISHED TO 
INVESTORS.—Every person required to make a return 
under subsection (a) shall furnish to each person whose 
name is required to be set forth in such return by reason 
of subsection (b)(8) a written statement showing— 
‘‘(1) the name, address and phone number of 
the information contact of the person required to 
make such return, and 
‘‘(2) the information required to be shown on 
such return by reason of subsection (b)(8) with re-
spect to the person whose name is required to be so 
set forth. 
‘‘(d) DEFINITIONS.—For purposes of this section— 
‘‘(1) IN GENERAL.—Any term used in this sec-
tion which is also used in subchapter Z of chapter 
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897 
1 shall have the meaning given such term under 
such subchapter. 
‘‘(2) FULL-TIME
EQUIVALENT
EMPLOYEES.— 
The term ‘full-time equivalent employees’ means, 
with respect to any month, the sum of— 
‘‘(A) the number of full-time employees (as 
defined in section 4980H(c)(4)) for the month, 
plus 
‘‘(B) the number of employees determined 
(under rules similar to the rules of section 
4980H(c)(2)(E)) by dividing the aggregate 
number of hours of service of employees who 
are not full-time employees for the month by 
120. 
‘‘(e) APPLICATION TO QUALIFIED RURAL OPPOR-
TUNITY FUNDS.—Every qualified rural opportunity fund 
(as defined in section 1400Z–2(b)(2)(B)(vii)) shall file the 
annual return required under subsection (a), and the 
statements required under subsection (c), applied— 
‘‘(1) by substituting ‘qualified rural oppor-
tunity’ for ‘qualified opportunity’ each place it ap-
pears, 
‘‘(2) 
by 
substituting 
‘section 
1400Z– 
2(b)(2)(B)(vii)’ for ‘section 1400Z–2(d)(1)’ each 
place it appears, and 
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898 
‘‘(3) by treating any reference (after the appli-
cation of paragraph (1)) to qualified rural oppor-
tunity zone stock, a qualified rural opportunity zone 
partnership interest, a qualified rural opportunity 
zone business, or qualified opportunity zone business 
property as stock, an interest, a business, or prop-
erty, respectively, described in (I) or (II), as the case 
may be, of section 1400Z–2(b)(2)(B)(vii). 
‘‘SEC. 6039L. INFORMATION REQUIRED FROM QUALIFIED 
OPPORTUNITY 
ZONE 
BUSINESSES 
AND 
QUALIFIED 
RURAL 
OPPORTUNITY 
ZONE 
BUSINESSES. 
‘‘(a) IN GENERAL.—Every applicable qualified oppor-
tunity zone business shall furnish to the qualified oppor-
tunity fund described in subsection (b) a written state-
ment in such manner and setting forth such information 
as the Secretary may by regulations prescribe for purposes 
of enabling such qualified opportunity fund to meet the 
requirements of section 6039K(b)(5). 
‘‘(b) APPLICABLE QUALIFIED OPPORTUNITY ZONE 
BUSINESS.—For purposes of subsection (a), the term ‘ap-
plicable qualified opportunity zone business’ means any 
qualified opportunity zone business— 
‘‘(1) which is a trade or business of a qualified 
opportunity fund, 
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899 
‘‘(2) in which a qualified opportunity fund holds 
qualified opportunity zone stock, or 
‘‘(3) in which a qualified opportunity fund holds 
a qualified opportunity zone partnership interest. 
‘‘(c) OTHER TERMS.—Any term used in this section 
which is also used in subchapter Z of chapter 1 shall have 
the meaning given such term under such subchapter. 
‘‘(d) APPLICATION TO QUALIFIED RURAL OPPOR-
TUNITY BUSINESSES.—Every applicable qualified rural 
opportunity zone business (as defined in subsection (b) de-
termined after application of the substitutions described 
in this sentence) shall furnish the written statement re-
quired under subsection (a), applied— 
‘‘(1) by substituting ‘qualified rural oppor-
tunity’ for ‘qualified opportunity’ each place it ap-
pears, and 
‘‘(2) by treating any reference (after the appli-
cation of paragraph (1)) to qualified rural oppor-
tunity zone stock, a qualified rural opportunity zone 
partnership interest, or a qualified rural opportunity 
zone business as stock, an interest, or a business, re-
spectively, described in (I) or (II), as the case may 
be, of section 1400Z–2(b)(2)(B)(vii).’’. 
(2) PENALTIES.— 
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900 
(A) IN GENERAL.—Part II of subchapter 
B of chapter 68 is amended by inserting after 
section 6725 the following new section: 
‘‘SEC. 6726. FAILURE TO COMPLY WITH INFORMATION RE-
PORTING 
REQUIREMENTS 
RELATING 
TO 
QUALIFIED 
OPPORTUNITY 
FUNDS 
AND 
QUALIFIED RURAL OPPORTUNITY FUNDS. 
‘‘(a) IN GENERAL.—In the case of any person re-
quired to file a return under section 6039K fails to file 
a complete and correct return under such section in the 
time and in the manner prescribed therefor, such person 
shall pay a penalty of $500 for each day during which 
such failure continues. 
‘‘(b) LIMITATION.— 
‘‘(1) IN
GENERAL.—The maximum penalty 
under this section on failures with respect to any 1 
return shall not exceed $10,000. 
‘‘(2) 
LARGE
QUALIFIED
OPPORTUNITY 
FUNDS.—In the case of any failure described in sub-
section (a) with respect to a fund the gross assets 
of which (determined on the last day of the taxable 
year) are in excess of $10,000,000, paragraph (1) 
shall be applied by substituting ‘$50,000’ for 
‘$10,000’. 
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901 
‘‘(c) PENALTY
IN CASES
OF INTENTIONAL DIS-
REGARD.—If a failure described in subsection (a) is due 
to intentional disregard, then— 
‘‘(1) subsection (a) shall be applied by sub-
stituting ‘$2,500’ for ‘$500’, 
‘‘(2) subsection (b)(1) shall be applied by sub-
stituting ‘$50,000’ for ‘$10,000’, and 
‘‘(3) subsection (b)(2) shall be applied by sub-
stituting ‘$250,000’ for ‘$50,000’. 
‘‘(d) INFLATION ADJUSTMENT.— 
‘‘(1) IN GENERAL.—In the case of any failure 
relating to a return required to be filed in a calendar 
year beginning after 2025, each of the dollar 
amounts in subsections (a), (b), and (c) shall be in-
creased by an amount equal to such dollar amount 
multiplied by the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar year 
determined by substituting ‘calendar year 2024’ for 
‘calendar year 2016’ in subparagraph (A)(ii) thereof. 
‘‘(2) ROUNDING.— 
‘‘(A) IN
GENERAL.—If the $500 dollar 
amount in subsection (a) and (c)(1) or the 
$2,500 amount in subsection (c)(1), after being 
increased under paragraph (1), is not a mul-
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903 
‘‘(MM) section 6039K(c) (relating to dis-
position of qualified opportunity fund invest-
ments), or 
‘‘(NN) section 6039L (relating to informa-
tion required from certain qualified opportunity 
zone businesses and qualified rural opportunity 
zone businesses).’’. 
(3) ELECTRONIC FILING.—Section 6011(e) is 
amended by adding at the end the following new 
paragraph: 
‘‘(8) QUALIFIED
OPPORTUNITY
FUNDS
AND 
QUALIFIED RURAL OPPORTUNITY FUNDS.—Notwith-
standing paragraphs (1) and (2), any return filed by 
a qualified opportunity fund or qualified rural oppor-
tunity fund shall be filed on magnetic media or other 
machine-readable form.’’. 
(4) CLERICAL AMENDMENTS.— 
(A) The table of sections for subpart A of 
part III of subchapter A of chapter 61 is 
amended by inserting after the item relating to 
section 6039J the following new items: 
‘‘Sec. 6039K. Returns with respect to qualified opportunity funds and qualified 
rural opportunity funds. 
‘‘Sec. 6039L. Information required from qualified opportunity zone businesses 
and qualified rural opportunity zone businesses.’’.’’. 
(B) The table of sections for part II of 
subchapter B of chapter 68 is amended by in-
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904 
serting after the item relating to section 6725 
the following new item: 
‘‘Sec. 6726. Failure to comply with information reporting requirements relating 
to qualified opportunity funds and qualified rural opportunity 
funds.’’. 
(5) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to taxable years begin-
ning after the date of the enactment of this Act. 
(e) SECRETARY REPORTING OF DATA ON OPPOR-
TUNITY ZONE AND RURAL OPPORTUNITY ZONE TAX IN-
CENTIVES.— 
(1) IN GENERAL.—As soon as practical after 
the date of the enactment of this Act, and annually 
thereafter, the Secretary of the Treasury, or the 
Secretary’s delegate (referred to in this section as 
the ‘‘Secretary’’), in consultation with the Director 
of the Bureau of the Census and such other agencies 
as the Secretary determines appropriate, shall make 
publicly available a report on qualified opportunity 
funds. 
(2) INFORMATION INCLUDED.—The report re-
quired under paragraph (1) shall include, to the ex-
tent available, the following information: 
(A) The number of qualified opportunity 
funds. 
(B) The aggregate dollar amount of assets 
held in qualified opportunity funds. 
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905 
(C) The aggregate dollar amount of invest-
ments made by qualified opportunity funds in 
qualified opportunity fund property, stated sep-
arately for each North American Industry Clas-
sification System (NAICS) code. 
(D) The percentage of population census 
tracts designated as qualified opportunity zones 
that have received qualified opportunity fund 
investments. 
(E) For each population census tract des-
ignated as a qualified opportunity zone, the ap-
proximate average monthly number of full-time 
equivalent employees of the qualified oppor-
tunity zone businesses in such qualified oppor-
tunity zone for the preceding 12-month period 
(within numerical ranges identified by the Sec-
retary) or such other indication of the employ-
ment impact of such qualified opportunity fund 
businesses as determined appropriate by the 
Secretary. 
(F) The percentage of the total amount of 
investments made by qualified opportunity 
funds in— 
(i) qualified opportunity zone property 
which is real property; and 
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(ii) other qualified opportunity zone 
property. 
(G) For each population census tract, the 
aggregate approximate number of residential 
units resulting from investments made by quali-
fied opportunity funds in real property. 
(H) The aggregate dollar amount of in-
vestments made by qualified opportunity funds 
in each population census tract. 
(3) ADDITIONAL INFORMATION.— 
(A) IN GENERAL.—Beginning with the re-
port submitted under paragraph (1) for the 6th 
year after the date of the enactment of this Act, 
the Secretary shall include in such report the 
impacts and outcomes of a designation of a 
population census tract as a qualified oppor-
tunity zone as measured by economic indicators, 
such as job creation, poverty reduction, new 
business starts, and other metrics as deter-
mined by the Secretary. 
(B) SEMI-DECENNIAL INFORMATION.— 
(i) IN GENERAL.—In the case of any 
report submitted under paragraph (1) in 
the 6th year or the 11th year after the 
date of the enactment of this Act, the Sec-
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retary shall include the following informa-
tion: 
(I) For population census tracts 
designated as a qualified opportunity 
zone, a comparison (based on aggre-
gate information) of the factors listed 
in clause (iii) between the 5-year pe-
riod ending on the date of the enact-
ment of Public Law 115–97 and the 
most recent 5-year period for which 
data is available. 
(II) For population census tracts 
designated as a qualified opportunity 
zone, a comparison (based on aggre-
gate information) of the factors listed 
in clause (iii) for the most recent 5- 
year period for which data is available 
between such population census tracts 
and a similar population census tracts 
that were not designated as a quali-
fied opportunity zone. 
(ii) CONTROL GROUPS.—For purposes 
of clause (i), the Secretary may combine 
population census tracts into such groups 
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908 
as the Secretary determines appropriate 
for purposes of making comparisons. 
(iii) FACTORS
LISTED.—The factors 
listed in this clause are the following: 
(I) The unemployment rate. 
(II) The number of persons 
working in the population census 
tract, including the percentage of such 
persons who were not residents in the 
population census tract in the pre-
ceding year. 
(III) 
Individual, 
family, 
and 
household poverty rates. 
(IV) Median family income of 
residents of the population census 
tract. 
(V) Demographic information on 
residents of the population census 
tract, including age, income, edu-
cation, race, and employment. 
(VI) The average percentage of 
income of residents of the population 
census tract spent on rent annually. 
(VII) The number of residences 
in the population census tract. 
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909 
(VIII) The rate of home owner-
ship in the population census tract. 
(IX) The average value of resi-
dential property in the population cen-
sus tract. 
(X) The number of affordable 
housing units in the population census 
tract. 
(XI) The number and percentage 
of residents in the population census 
tract that were not employed for the 
preceding year. 
(XII) The number of new busi-
ness starts in the population census 
tract. 
(XIII) The distribution of em-
ployees in the population census tract 
by North American Industry Classi-
fication System (NAICS) code. 
(4) PROTECTION OF IDENTIFIABLE RETURN IN-
FORMATION.—In making reports required under this 
subsection, the Secretary— 
(A) shall establish appropriate procedures 
to ensure that any amounts reported do not dis-
close taxpayer return information that can be 
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910 
associated with any particular taxpayer or com-
petitive or proprietary information, and 
(B) if necessary to protect taxpayer return 
information, may combine information required 
with respect to individual population census 
tracts into larger geographic areas. 
(5) DEFINITIONS.—Any term used in this sub-
section which is also used in subchapter Z of chapter 
1 of the Internal Revenue Code of 1986 shall have 
the meaning given such term under such subchapter. 
(6) REPORTS
ON
QUALIFIED
RURAL
OPPOR-
TUNITY FUNDS.—The Secretary shall make publicly 
available, with respect to qualified rural opportunity 
funds, separate reports as required under this sub-
section, applied— 
(A) by substituting ‘‘qualified rural oppor-
tunity’’ for ‘‘qualified opportunity’’ each place it 
appears, 
(B) by substituting a reference to this Act 
for ‘‘Public Law 115–97’’, and 
(C) by treating any reference (after the ap-
plication of subparagraph (A)) to qualified rural 
opportunity zone stock, qualified rural oppor-
tunity zone partnership interest, qualified rural 
opportunity zone business, or qualified oppor-
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tunity zone business property as stock, interest, 
business, or property, respectively, described in 
(I) or (II), as the case may be, of section 
1400Z–2(b)(2)(B)(vii) of the Internal Revenue 
Code of 1986. 
SEC. 111103. INCREASED DOLLAR LIMITATIONS FOR EX-
PENSING OF CERTAIN DEPRECIABLE BUSI-
NESS ASSETS. 
(a) IN GENERAL.—Section 179(b) is amended— 
(1) in paragraph (1), by striking ‘‘$1,000,000’’ 
and inserting ‘‘$2,500,000’’ , and 
(2) in paragraph (2), by striking ‘‘$2,500,000’’ 
and inserting ‘‘$4,000,000’’. 
(b) 
CONFORMING
AMENDMENTS.—Section 
179(b)(6)(A) is amended— 
(1) by inserting ‘‘(2025 in the case of the dollar 
amounts in paragraphs (1) and (2))’’ after ‘‘In the 
case of any taxable year beginning after 2018’’, and 
(2) in clause (ii), by striking ‘‘determined by 
substituting ‘calendar year 2017’ for ‘calendar year 
2016’ in subparagraph (A)(ii) thereof.’’ and insert-
ing ‘‘determined by substituting in subparagraph 
(A)(ii) thereof— 
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912 
‘‘(I) in the case of amounts in 
paragraphs (1) and (2), ‘calendar year 
2024’ for ‘calendar year 2016’, and 
‘‘(II) in the case of the amount 
in paragraph (5)(A), ‘calendar year 
2017’ for ‘calendar year 2016’.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service in 
taxable years beginning after December 31, 2024. 
SEC. 111104. REPEAL OF REVISION TO DE MINIMIS RULES 
FOR 
THIRD 
PARTY 
NETWORK 
TRANS-
ACTIONS. 
(a) REINSTATEMENT OF EXCEPTION FOR DE MINI-
MIS PAYMENTS AS IN EFFECT PRIOR TO ENACTMENT OF 
AMERICAN RESCUE PLAN ACT OF 2021.— 
(1) IN GENERAL.—Section 6050W(e) is amend-
ed to read as follows: 
‘‘(e) EXCEPTION FOR DE MINIMIS PAYMENTS BY 
THIRD PARTY SETTLEMENT ORGANIZATIONS.—A third 
party settlement organization shall be required to report 
any information under subsection (a) with respect to third 
party network transactions of any participating payee only 
if— 
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‘‘(1) the amount which would otherwise be re-
ported under subsection (a)(2) with respect to such 
transactions exceeds $20,000, and 
‘‘(2) the aggregate number of such transactions 
exceeds 200.’’. 
(2) EFFECTIVE DATE.—The amendment made 
by this subsection shall take effect as if included in 
section 9674 of the American Rescue Plan Act. 
(b) APPLICATION OF DE MINIMIS RULE FOR THIRD 
PARTY NETWORK TRANSACTIONS
TO BACKUP WITH-
HOLDING.— 
(1) IN GENERAL.—Section 3406(b) is amended 
by adding at the end the following new paragraph: 
‘‘(8) OTHER REPORTABLE PAYMENTS INCLUDE 
PAYMENTS IN SETTLEMENT OF THIRD PARTY NET-
WORK
TRANSACTIONS
ONLY
WHERE
AGGREGATE 
TRANSACTIONS
EXCEED
REPORTING
THRESHOLD 
FOR THE CALENDAR YEAR.— 
‘‘(A) IN GENERAL.—Any payment in set-
tlement of a third party network transaction re-
quired to be shown on a return required under 
section 6050W which is made during any cal-
endar year shall be treated as a reportable pay-
ment only if— 
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914 
‘‘(i) the aggregate number of trans-
actions with respect to the participating 
payee during such calendar year exceeds 
the number of transactions specified in 
section 6050W(e)(2), and 
‘‘(ii) the aggregate amount of trans-
actions with respect to the participating 
payee during such calendar year exceeds 
the dollar amount specified in section 
6050W(e)(1) at the time of such payment. 
‘‘(B) EXCEPTION
IF
THIRD
PARTY
NET-
WORK
TRANSACTIONS
MADE
IN
PRIOR
YEAR 
WERE REPORTABLE.—Subparagraph (A) shall 
not apply with respect to payments to any par-
ticipating payee during any calendar year if one 
or more payments in settlement of third party 
network transactions made by the payor to the 
participating payee during the preceding cal-
endar year were reportable payments.’’. 
(2) EFFECTIVE DATE.—The amendment made 
by this subsection shall apply to calendar years be-
ginning after December 31, 2024. 
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915 
SEC. 111105. INCREASE IN THRESHOLD FOR REQUIRING IN-
FORMATION REPORTING WITH RESPECT TO 
CERTAIN PAYEES. 
(a) IN GENERAL.—Section 6041(a) is amended by 
striking ‘‘$600’’ and inserting ‘‘$2,000’’. 
(b) INFLATION
ADJUSTMENT.—Section 6041 is 
amended by adding at the end the following new sub-
section: 
‘‘(h) INFLATION ADJUSTMENT.—In the case of any 
calendar year after 2026, the dollar amount in subsection 
(a) shall be increased by an amount equal to— 
‘‘(1) such dollar amount, multiplied by 
‘‘(2) the cost-of-living adjustment determined 
under section 1(f)(3) for such calendar year, deter-
mined by substituting ‘calendar year 2025’ for ‘cal-
endar year 2016’ in subparagraph (A)(ii) thereof. 
If any increase under the preceding sentence is not a mul-
tiple of $100, such increase shall be rounded to the nearest 
multiple of $100.’’. 
(c) APPLICATION TO REPORTING ON REMUNERATION 
FOR SERVICES.—Section 6041A(a)(2) is amended by 
striking ‘‘is $600 or more’’ and inserting ‘‘equals or ex-
ceeds the dollar amount in effect for such calendar year 
under section 6041(a)’’. 
(d) APPLICATION TO BACKUP WITHHOLDING.—Sec-
tion 3406(b)(6) is amended— 
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916 
(1) by striking ‘‘$600’’ in subparagraph (A) 
and inserting ‘‘the dollar amount in effect for such 
calendar year under section 6041(a)’’, and 
(2) by striking ‘‘ONLY WHERE AGGREGATE FOR 
CALENDAR YEAR IS $600 OR MORE’’ in the heading 
and inserting ‘‘ONLY IF IN EXCESS OF THRESHOLD’’. 
(e) CONFORMING AMENDMENTS.— 
(1) The heading of section 6041(a) is amended 
by striking ‘‘OF $600 OR MORE’’ and inserting ‘‘EX-
CEEDING THRESHOLD’’. 
(2) Section 6041(a) is amended by striking 
‘‘taxable year’’ and inserting ‘‘calendar year’’. 
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to payments made 
after December 31, 2025. 
SEC. 111106. REPEAL OF EXCISE TAX ON INDOOR TANNING 
SERVICES. 
(a) IN GENERAL.—Subtitle D is amended by striking 
chapter 49 and by striking the item relating to such chap-
ter in the table of chapters of such subtitle. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to services performed after the 
date of the enactment of this Act. 
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917 
SEC. 111107. EXCLUSION OF INTEREST ON LOANS SECURED 
BY RURAL OR AGRICULTURAL REAL PROP-
ERTY. 
(a) IN GENERAL.—Part III of subchapter B of chap-
ter 1 is amended by inserting after section 139I the fol-
lowing new section: 
‘‘SEC. 139J. INTEREST ON LOANS SECURED BY RURAL OR 
AGRICULTURAL REAL PROPERTY. 
‘‘(a) IN GENERAL.—Gross income shall not include 
25 percent of the interest received by a qualified lender 
on any qualified real estate loan. 
‘‘(b) QUALIFIED LENDER.—For purposes of this sec-
tion, the term ‘qualified lender’ means— 
‘‘(1) any bank or savings association the depos-
its of which are insured under the Federal Deposit 
Insurance Act (12 U.S.C. 1811 et seq.), 
‘‘(2) any State- or federally-regulated insurance 
company, 
‘‘(3) any entity wholly owned, directly or indi-
rectly, by a company that is treated as a bank hold-
ing company for purposes of section 8 of the Inter-
national Banking Act of 1978 (12 U.S.C. 3106) if— 
‘‘(A) such entity is organized, incor-
porated, or established under the laws of the 
United States or any State of the United 
States, and 
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918 
‘‘(B) the principal place of business of 
such entity is in the United States (including 
any territory of the United States), 
‘‘(4) any entity wholly owned, directly or indi-
rectly, by a company that is considered an insurance 
holding company under the laws of any State if such 
entity satisfies the requirements described in sub-
paragraphs (A) and (B) of paragraph (3), and 
‘‘(5) with respect to interest received on a quali-
fied real estate loan secured by real estate described 
in subsection (c)(3)(A), any federally chartered in-
strumentality of the United States established under 
section 8.1(a) of the Farm Credit Act of 1971 (12 
U.S.C. 2279aa-1(a)). 
‘‘(c) QUALIFIED REAL ESTATE LOAN.—For purposes 
of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified real es-
tate loan’ means any loan— 
‘‘(A) secured by— 
‘‘(i) rural or agricultural real estate, 
or 
‘‘(ii) a leasehold mortgage (with a sta-
tus as a lien) on rural or agricultural real 
estate, 
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919 
‘‘(B) made to a person other than a speci-
fied foreign entity (as defined in section 
7701(a)(51)), and 
‘‘(C) made after the date of the enactment 
of this section and before January 1, 2029. 
For purposes of the preceding sentence, the deter-
mination of whether property securing such loan is 
rural or agricultural real estate shall be made as of 
the time the interest income on such loan is accrued. 
‘‘(2) REFINANCINGS.—For purposes of sub-
paragraphs (A) and (C) of paragraph (1), a loan 
shall not be treated as made after the date of the 
enactment of this section to the extent that the pro-
ceeds of such loan are used to refinance a loan 
which was made on or before the date of the enact-
ment of this section (or, in the case of any series of 
refinancings, the original loan was made on or be-
fore such date). 
‘‘(3) RURAL
OR
AGRICULTURAL
REAL
ES-
TATE.—The term ‘rural or agricultural real estate’ 
means— 
‘‘(A) any real property which is substan-
tially used for the production of one or more 
agricultural products, 
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920 
‘‘(B) any real property which is substan-
tially used in the trade or business of fishing or 
seafood processing, and 
‘‘(C) any aquaculture facility. 
Such term shall not include any property which is 
not located in a State or a possession of the United 
States. 
‘‘(4) 
AQUACULTURE
FACILITY.—The 
term 
‘aquaculture facility’ means any land, structure, or 
other appurtenance that is used for aquaculture (in-
cluding any hatchery, rearing pond, raceway, pen, or 
incubator). 
‘‘(d) COORDINATION WITH SECTION 265.—Qualified 
real estate loans shall be treated as obligations described 
in section 265(a)(2) the interest on which is wholly exempt 
from the taxes imposed by this subtitle.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for part III of subchapter B of chapter 1 is amended by 
inserting after the item relating to section 139I the fol-
lowing new item: 
‘‘Sec. 139J. Interest on loans secured by rural or agricultural real property.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years ending after the 
date of the enactment of this Act. 
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921 
SEC. 111108. TREATMENT OF CERTAIN QUALIFIED SOUND 
RECORDING PRODUCTIONS. 
(a) ELECTION TO TREAT COSTS AS EXPENSES.— 
Section 181(a)(1) is amended by striking ‘‘qualified film 
or television production, and any qualified live theatrical 
production,’’ and inserting ‘‘qualified film or television 
production, any qualified live theatrical production, and 
any qualified sound recording production’’. 
(b) DOLLAR
LIMITATION.—Section 181(a)(2) is 
amended by adding at the end the following new subpara-
graph: 
‘‘(C) QUALIFIED SOUND RECORDING PRO-
DUCTION.—Paragraph (1) shall not apply to so 
much of the aggregate cost of any qualified 
sound recording production, or to so much of 
the aggregate, cumulative cost of all such quali-
fied sound recording productions in the taxable 
year, as exceeds $150,000.’’. 
(c) NO OTHER DEDUCTION OR AMORTIZATION DE-
DUCTION ALLOWABLE.—Section 181(b) is amended by 
striking ‘‘qualified film or television production or any 
qualified live theatrical production’’ and inserting ‘‘quali-
fied film or television production, any qualified live theat-
rical production, or any qualified sound recording produc-
tion’’. 
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922 
(d) ELECTION.—Section 181(c)(1) is amended by 
striking ‘‘qualified film or television production or any 
qualified live theatrical production’’ and inserting ‘‘quali-
fied film or television production, any qualified live theat-
rical production, or any qualified sound recording produc-
tion’’. 
(e) QUALIFIED SOUND RECORDING PRODUCTION 
DEFINED.—Section 181 is amended by redesignating sub-
sections (f) and (g) as subsections (g) and (h), respec-
tively, and by inserting after subsection (e) the following 
new subsection: 
‘‘(f) QUALIFIED SOUND RECORDING PRODUCTION.— 
For purposes of this section, the term ‘qualified sound re-
cording production’ means a sound recording (as defined 
in section 101 of title 17, United States Code) produced 
and recorded in the United States.’’. 
(f) APPLICATION OF TERMINATION.—Section 181(g) 
is amended by striking ‘‘qualified film and television pro-
ductions or qualified live theatrical productions’’ and in-
serting ‘‘qualified film and television productions, qualified 
live theatrical productions, and qualified sound recording 
productions’’. 
(g) BONUS DEPRECIATION.— 
(1) QUALIFIED
SOUND
RECORDING
PRODUC-
TION
AS
QUALIFIED
PROPERTY.—Section 
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923 
168(k)(2)(A)(i), as amended by the preceding provi-
sions of this Act, is amended— 
(A) by striking ‘‘or’’ at the end of sub-
clause (IV), by striking ‘‘and’’ and inserting 
‘‘or’’ at the end of subclause (V), and by insert-
ing after subclause (V) the following: 
‘‘(VI) which is a qualified sound 
recording production (as defined in 
subsection (f) of section 181) which is 
placed in service before January 1, 
2029, for which a deduction would 
have been allowable under section 181 
without regard to subsections (a)(2) 
and (h) of such section or this sub-
section, and’’, and 
(B) in subclauses (IV) and (V) (as so 
amended) by striking ‘‘without regard to sub-
sections (a)(2) and (g)’’ both places it appears 
and inserting ‘‘without regard to subsections 
(a)(2) and (h)’’. 
(2) PRODUCTION PLACED IN SERVICE.—Section 
168(k)(2)(H) is amended by striking ‘‘and’’ at the 
end of clause (i), by striking the period at the end 
of clause (ii) and inserting ‘‘, and’’, and by adding 
after clause (ii) the following: 
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924 
‘‘(iii) a qualified sound recording pro-
duction shall be considered to be placed in 
service at the time of initial release or 
broadcast.’’. 
(h) CONFORMING AMENDMENTS.— 
(1) The heading for section 181 is amended to 
read as follows: ‘‘TREATMENT
OF
CERTAIN 
QUALIFIED PRODUCTIONS.’’. 
(2) The table of sections for part VI of sub-
chapter B of chapter 1 is amended by striking the 
item relating to section 181 and inserting the fol-
lowing new item: 
‘‘Sec. 181. Treatment of certain qualified productions.’’. 
(i) EFFECTIVE DATE.—The amendments made by 
this section shall apply to productions commencing in tax-
able years ending after the date of the enactment of this 
Act. 
SEC. 111109. MODIFICATIONS TO LOW-INCOME HOUSING 
CREDIT. 
(a) STATE HOUSING CREDIT CEILING INCREASE FOR 
LOW-INCOME HOUSING CREDIT.— 
(1) 
IN
GENERAL.—Section 
42(h)(3)(I) 
is 
amended— 
(A) by striking ‘‘and 2021,’’ and inserting 
‘‘2021, 2026, 2027, 2028, and 2029,’’, and 
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925 
(B) by striking ‘‘2018, 2019, 2020, AND 
2021’’ in the heading and inserting ‘‘CERTAIN 
CALENDAR YEARS’’. 
(2) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to calendar years after 
2025. 
(b) TAX-EXEMPT
BOND
FINANCING
REQUIRE-
MENT.— 
(1) IN GENERAL.—Section 42(h)(4) is amended 
by striking subparagraph (B) and inserting the fol-
lowing: 
‘‘(B) SPECIAL
RULE
WHERE
MINIMUM 
PERCENT
OF
BUILDINGS
IS
FINANCED
WITH 
TAX-EXEMPT
BONDS
SUBJECT
TO
VOLUME 
CAP.—For purposes of subparagraph (A), para-
graph (1) shall not apply to any portion of the 
credit allowable under subsection (a) with re-
spect to a building if— 
‘‘(i) 50 percent or more of the aggre-
gate basis of such building and the land on 
which the building is located is financed by 
1 or more obligations described in subpara-
graph (A), or 
‘‘(ii)(I) 25 percent or more of the ag-
gregate basis of such building and the land 
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926 
on which the building is located is financed 
by 1 or more qualified obligations, and 
‘‘(II) 1 or more of such qualified obli-
gations— 
‘‘(aa) are part of an issue the 
issue date of which is after December 
31, 2025, and 
‘‘(bb) provide the financing for 
not less than 5 percent of the aggre-
gate basis of such building and the 
land on which the building is located. 
‘‘(C) QUALIFIED
OBLIGATION.—For pur-
poses of subparagraph (B)(ii), the term ‘quali-
fied obligation’ means an obligation which is de-
scribed in subparagraph (A) and which is part 
of an issue the issue date of which is before 
January 1, 2030.’’. 
(2) EFFECTIVE DATE.— 
(A) IN GENERAL.—The amendment made 
by this subsection shall apply to buildings 
placed in service in taxable years beginning 
after December 31, 2025. 
(B) 
REHABILITATION
EXPENDITURES 
TREATED
AS
SEPARATE
NEW
BUILDING.—In 
the case of any building with respect to which 
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any expenditures are treated as a separate new 
building under section 42(e) of the Internal 
Revenue Code of 1986, for purposes of sub-
paragraph (A), both the existing building and 
the separate new building shall be treated as 
having been placed in service on the date such 
expenditures are treated as placed in service 
under section 42(e)(4) of such Code. 
(c) TEMPORARY INCLUSION OF INDIAN AREAS AND 
RURAL AREAS AS DIFFICULT DEVELOPMENT AREAS FOR 
PURPOSES OF CERTAIN BUILDINGS.— 
(1) IN GENERAL.—Section 42(d)(5)(B)(iii)(I) is 
amended by inserting before the period the fol-
lowing: ‘‘, and, in the case of buildings placed in 
service after December 31, 2025 and before January 
1, 2030, any Indian area or rural area’’. 
(2) INDIAN
AREA; 
RURAL
AREA.—Section 
42(d)(5)(B)(iii) is amended by redesignating sub-
clause (II) as subclause (IV) and by inserting after 
subclause (I) the following new subclauses: 
‘‘(II) INDIAN
AREA.—For pur-
poses of subclause (I), the term ‘In-
dian area’ means any Indian area (as 
defined in section 4(11) of the Native 
American Housing Assistance and 
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kjohnson on DSK7ZCZBW3PROD with $$_JOB