(A) by striking ‘‘50 percent’’ and inserting 
‘‘more than 50 percent’’, and 
(B) by striking ‘‘80 percent’’ and inserting 
‘‘at least 80 percent’’. 
(11)(A) Paragraph (6) of section 199(d) is 
amended to read as follows: 
‘‘(6) COORDINATION WITH MINIMUM TAX.—For 
purposes of determining alternative minimum tax-
able income under section 55— 
‘‘(A) the deduction under this section shall 
be determined without regard to any adjust-
ments under sections 56 through 59, and 
‘‘(B) in the case of a corporation, sub-
section (a)(1)(B) shall be applied by sub-
stituting ‘alternative minimum taxable income’ 
for ‘taxable income’.’’. 
(B) Paragraph (2) of section 199(a) is amended 
by striking ‘‘subsections (d)(1) and (d)(6)’’ and in-
serting ‘‘subsection (d)(1)’’. 
(12) Subsection (d) of section 199 is amended 
by redesignating paragraph (7) as paragraph (8) 
and by inserting after paragraph (6) the following 
new paragraph: 
‘‘(7) UNRELATED
BUSINESS
TAXABLE
IN-
COME.—For purposes of determining the tax im-
posed by section 511, subsection (a)(1)(B) shall be 
applied by substituting ‘unrelated business taxable 
income’ for ‘taxable income’.’’. 
(13) Subsection (d) of section 199, as amended 
by the preceding paragraphs of this subsection, is 
further amended by redesignating paragraph (8) as 
paragraph (9) and by inserting after paragraph (7) 
the following new paragraph: 
‘‘(8) COORDINATION WITH CARRYOVER OF NET 
OPERATING LOSS.—The deduction allowable under 
this section shall not be taken into account for pur-
poses of computing taxable income under section 
172(b)(2).’’. 
(14) Paragraph (9) of section 199(d), as redes-
ignated by the preceding paragraphs of this sub-
section, is amended by inserting ‘‘, including regula-
tions which prevent more than 1 taxpayer from 
being allowed a deduction under this section with re-
spect to any activity described in subsection 
(c)(4)(A)(i)’’ before the period at the end. 
(15) Clause (i) of section 163(j)(6)(A) is 
amended by striking ‘‘and’’ at the end of subclause 
(II), by redesignating subclause (III) as subclause 
(IV), and by inserting after subclause (II) the fol-
lowing new subclause:
‘‘(III) any deduction allowable 
under section 199, and’’. 
(16) Paragraph (2) of section 170(b) is amend-
ed by redesignating subparagraphs (C) and (D) as 
subparagraphs (D) and (E), respectively, and by in-
serting after subparagraph (B) the following new 
subparagraph: 
‘‘(C) section 199,’’. 
(17) Paragraph (1) of section 613A(d) is 
amended by redesignating subparagraphs (B), (C), 
and (D) as subparagraphs (C), (D), and (E), respec-
tively, and by inserting after subparagraph (A) the 
following new subparagraph: 
‘‘(B) any deduction allowable under section 
199,’’. 
(18) Subsection (e) of section 102 of the Amer-
ican Jobs Creation Act of 2004 is amended to read 
as follows: 
‘‘(e) EFFECTIVE DATE.— 
‘‘(1) IN GENERAL.—The amendments made by 
this section shall apply to taxable years beginning 
after December 31, 2004. 
‘‘(2) APPLICATION
TO
PASS-THRU
ENTITIES, 
ETC.—In determining the deduction under section 
199 of the Internal Revenue Code of 1986 (as added
by this section), items arising from a taxable year of 
a partnership, S corporation, estate, or trust begin-
ning before January 1, 2005, shall not be taken into 
account for purposes of subsection (d)(1) of such 
section.’’. 
(b) AMENDMENTS RELATED TO SECTION 231 OF 
THE ACT.— 
(1) Clause (ii) of section 1361(c)(1)(A) is 
amended by inserting ‘‘(and their estates)’’ after ‘‘all 
members of the family’’. 
(2) Subparagraph (C) of section 1361(c)(1) is 
amended to read as follows: 
‘‘(C) EFFECT
OF
ADOPTION, ETC.—For 
purposes of this paragraph, any legally adopted 
child of an individual, any child who is lawfully 
placed with an individual for legal adoption by 
the individual, and any eligible foster child of 
an individual (within the meaning of section 
152(f)(1)(C)), shall be treated as a child of 
such individual by blood.’’. 
(c) AMENDMENT RELATED TO SECTION 235 OF THE 
ACT.—Subsection (b) of section 235 of the American Jobs 
Creation Act of 2004 is amended by striking ‘‘taxable 
years beginning’’ and inserting ‘‘transfers’’.
(d) AMENDMENTS RELATED TO SECTION 243 OF 
THE ACT.— 
(1) Paragraph (7) of section 856(c) is amended 
to read as follows: 
‘‘(7) RULES OF APPLICATION FOR FAILURE TO 
SATISFY PARAGRAPH (4).— 
‘‘(A) IN GENERAL.— A corporation, trust, 
or association that fails to meet the require-
ments of paragraph (4) (other than a failure to 
meet the requirements of paragraph (4)(B)(iii) 
which is described in subparagraph (B)(i) of 
this paragraph) for a particular quarter shall 
nevertheless be considered to have satisfied the 
requirements of such paragraph for such quar-
ter if— 
‘‘(i) following the corporation, trust, 
or association’s identification of the failure 
to satisfy the requirements of such para-
graph for a particular quarter, a descrip-
tion of each asset that causes the corpora-
tion, trust, or association to fail to satisfy 
the requirements of such paragraph at the 
close of such quarter of any taxable year is 
set forth in a schedule for such quarter
filed in accordance with regulations pre-
scribed by the Secretary, 
‘‘(ii) the failure to meet the require-
ments of such paragraph for a particular 
quarter is due to reasonable cause and not 
due to willful neglect, and 
‘‘(iii)(I) the corporation, trust, or as-
sociation disposes of the assets set forth on 
the schedule specified in clause (i) within 
6 months after the last day of the quarter 
in which the corporation, trust or associa-
tion’s identification of the failure to satisfy 
the requirements of such paragraph oc-
curred or such other time period prescribed 
by the Secretary and in the manner pre-
scribed by the Secretary, or 
‘‘(II) the requirements of such para-
graph are otherwise met within the time 
period specified in subclause (I). 
‘‘(B) RULE
FOR
CERTAIN
DE
MINIMIS 
FAILURES.—A corporation, trust, or association 
that fails to meet the requirements of para-
graph (4)(B)(iii) for a particular quarter shall 
nevertheless be considered to have satisfied the
requirements of such paragraph for such quar-
ter if— 
‘‘(i) such failure is due to the owner-
ship of assets the total value of which does 
not exceed the lesser of— 
‘‘(I) 1 percent of the total value 
of the trust’s assets at the end of the 
quarter for which such measurement 
is done, and 
‘‘(II) $10,000,000, and 
‘‘(ii)(I) the corporation, trust, or asso-
ciation, following the identification of such 
failure, disposes of assets in order to meet 
the requirements of such paragraph within 
6 months after the last day of the quarter 
in which the corporation, trust or associa-
tion’s identification of the failure to satisfy 
the requirements of such paragraph oc-
curred or such other time period prescribed 
by the Secretary and in the manner pre-
scribed by the Secretary, or 
‘‘(II) the requirements of such para-
graph are otherwise met within the time 
period specified in subclause (I). 
‘‘(C) TAX.—
‘‘(i) TAX IMPOSED.— If subparagraph 
(A) applies to a corporation, trust, or asso-
ciation for any taxable year, there is here-
by imposed on such corporation, trust, or 
association a tax in an amount equal to 
the greater of— 
‘‘(I) $50,000, or 
‘‘(II) the amount determined 
(pursuant to regulations promulgated 
by the Secretary) by multiplying the 
net income generated by the assets 
described in the schedule specified in 
subparagraph (A)(i) for the period 
specified in clause (ii) by the highest 
rate of tax specified in section 11. 
‘‘(ii) PERIOD.—For purposes of clause 
(i)(II), the period described in this clause 
is the period beginning on the first date 
that the failure to satisfy the requirements 
of such paragraph (4) occurs as a result of 
the ownership of such assets and ending on 
the earlier of the date on which the trust 
disposes of such assets or the end of the 
first quarter when there is no longer a fail-
ure to satisfy such paragraph (4).
‘‘(iii) ADMINISTRATIVE PROVISIONS.— 
For purposes of subtitle F, the taxes im-
posed by this subparagraph shall be treat-
ed as excise taxes with respect to which the 
deficiency procedures of such subtitle 
apply.’’. 
(2) Subsection (m) of section 856 is amended 
by adding at the end the following new paragraph: 
‘‘(6) TRANSITION RULE.— 
‘‘(A) IN GENERAL.—Notwithstanding para-
graph (2)(C), securities held by a trust shall 
not be considered securities held by the trust 
for purposes of subsection (c)(4)(B)(iii)(III) if 
such securities— 
‘‘(i) were held by such trust on Octo-
ber 22, 2004, and continuously thereafter, 
and 
‘‘(ii) would not be taken into account 
for purposes of such subsection by reason 
of paragraph (7)(C) of subsection (c) (as 
in effect on October 22, 2004) if the 
amendments made by section 243 of the 
American Jobs Creation Act of 2004 had 
never been enacted.
‘‘(B) RULE NOT TO APPLY TO SECURITIES 
HELD AFTER MATURITY DATE.—Subparagraph 
(A) shall not apply with respect to any security 
after the latest maturity date under the con-
tract (as in effect on October 22, 2004) taking 
into account any renewal or extension permitted 
under the contract if such renewal or extension 
does not significantly modify any other terms of 
the contract. 
‘‘(C) SUCCESSORS.—If the successor of a 
trust to which this paragraph applies acquires 
securities in a transaction to which section 381 
applies, such trusts shall be treated as a single 
entity for purposes of determining the holding 
period of such securities under subparagraph 
(A)(i).’’. 
(3) Subparagraph (E) of section 857(b)(2) is 
amended by striking ‘‘section 856(c)(7)(B)(iii), and 
section 
856(g)(1).’’ 
and 
inserting 
‘‘section 
856(c)(7)(C), and section 856(g)(5)’’. 
(4) Subsection (g) of section 243 of the Amer-
ican Jobs Creation Act of 2004 is amended to read 
as follows: 
‘‘(g) EFFECTIVE DATES.—
‘‘(1) SUBSECTIONS (a) AND (b).—The amend-
ments made by subsections (a) and (b) shall apply 
to taxable years beginning after December 31, 2000. 
‘‘(2) SUBSECTIONS (c) AND (e).—The amend-
ments made by subsections (c) and (e) shall apply 
to taxable years beginning after the date of the en-
actment of this Act. 
‘‘(3) SUBSECTION (d).—The amendment made 
by subsection (d) shall apply to transactions entered 
into after December 31, 2004. 
‘‘(4) SUBSECTION (f).— 
‘‘(A) The amendment made by paragraph 
(1) of subsection (f) shall apply to failures with 
respect to which the requirements of subpara-
graph (A) or (B) of section 856(c)(7) of the In-
ternal Revenue Code of 1986 (as added by such 
paragraph) are satisfied after the date of the 
enactment of this Act. 
‘‘(B) The amendment made by paragraph 
(2) of subsection (f) shall apply to failures with 
respect to which the requirements of paragraph 
(6) of section 856(c) of the Internal Revenue 
Code of 1986 (as amended by such paragraph) 
are satisfied after the date of the enactment of 
this Act.
‘‘(C) The amendments made by paragraph 
(3) of subsection (f) shall apply to failures with 
respect to which the requirements of paragraph 
(5) of section 856(g) of the Internal Revenue 
Code of 1986 (as added by such paragraph) are 
satisfied after the date of the enactment of this 
Act. 
‘‘(D) The amendment made by paragraph 
(4) of subsection (f) shall apply to taxable years 
ending after the date of the enactment of this 
Act. 
‘‘(E) The amendments made by paragraph 
(5) of subsection (f) shall apply to statements 
filed after the date of the enactment of this 
Act.’’. 
(e) AMENDMENTS RELATED TO SECTION 244 OF 
THE ACT.— 
(1) Paragraph (2) of section 181(d) is amended 
by striking the last sentence in subparagraph (A), by 
redesignating subparagraph (B) as subparagraph 
(C), and by inserting after subparagraph (A) the fol-
lowing new subparagraph: 
‘‘(B) SPECIAL RULES FOR TELEVISION SE-
RIES.—In the case of a television series—
‘‘(i) each episode of such series shall 
be treated as a separate production, and 
‘‘(ii) only the first 44 episodes of such 
series shall be taken into account.’’. 
(2) Subparagraph (C) of section 1245(a)(2) is 
amended by inserting ‘‘181,’’ after ‘‘179B,’’. 
(f) AMENDMENT RELATED TO SECTION 245 OF THE 
ACT.—Subsection (b) of section 45G is amended to read 
as follows: 
‘‘(b) LIMITATION.—The credit allowed under sub-
section (a) for any taxable year shall not exceed the prod-
uct of— 
‘‘(1) $3,500, and 
‘‘(2) the sum of— 
‘‘(A) the number of miles of railroad track 
owned or leased by the eligible taxpayer as of 
the close of the taxable year, and 
‘‘(B) the number of miles of railroad track 
assigned for purposes of this subsection to the 
eligible taxpayer by a Class II or Class III rail-
road which owns or leases such railroad track 
as of the close of the taxable year. 
Any mile which is assigned by a taxpayer under 
paragraph (2)(B) may not be taken into account by 
such taxpayer under paragraph (2)(A).’’.