I 
115TH CONGRESS 
1ST SESSION H. R. 1416 
To amend the Internal Revenue Code of 1986 to exclude from gross income 
contributions to the capital of a partnership, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 7, 2017 
Mr. TIBERI (for himself, Mr. DANNY K. DAVIS of Illinois, and Mr. SMITH of 
Missouri) introduced the following bill; which was referred to the Com-
mittee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to exclude 
from gross income contributions to the capital of a part-
nership, 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 ‘‘Preserving Investment 
in Neighborhoods Act’’. 
SEC. 2. EXCLUSION OF CONTRIBUTIONS TO CAPITAL OF 
PARTNERSHIP. 
(a) IN GENERAL.—Subsection (a) of section 118 of 
the Internal Revenue Code of 1986 is amended by insert-
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ing before the period at the end the following: ‘‘, and, in 
the case of a partnership, gross income shall not include 
contributions to the capital of the partnership’’. 
(b) BASIS OF PROPERTY CONTRIBUTED TO PART-
NERSHIP.—Section 723 of such Code is amended— 
(1) by striking ‘‘The basis of property’’ and in-
serting the following: 
‘‘(a) IN GENERAL.—Except as provided in subsection 
(b), the basis of property’’, and 
(2) by adding at the end the following new sub-
section: 
‘‘(b) CONTRIBUTIONS TO CAPITAL.— 
‘‘(1) PROPERTY OTHER THAN MONEY.—If prop-
erty other than money— 
‘‘(A) is acquired by a partnership as a con-
tribution to capital, and 
‘‘(B) is not contributed by a partner as 
such, 
then the basis of such property shall be zero. 
‘‘(2) MONEY.—If money— 
‘‘(A) is received by a partnership as a con-
tribution to capital, and 
‘‘(B) is not contributed by a partner as 
such, 
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then the basis of any property acquired with such 
money during the 12-month period beginning on the 
day the contribution is received shall be reduced by 
the amount of such contribution. The excess (if any) 
of the amount of such contribution over the amount 
of the reduction under the preceding sentence shall 
be applied to the reduction (as of the last day of the 
period specified in the preceding sentence) of the 
basis of any other property of the partnership. The 
particular properties to which the reductions re-
quired by this paragraph shall be allocated shall be 
determined under regulations prescribed by the Sec-
retary.’’. 
(c) NO INCREASE IN BASIS OF PARTNER’S INTER-
EST.—Subparagraph (B) of section 705(a)(1) of such 
Code is amended by inserting ‘‘(other than amounts ex-
cluded from gross income under section 118)’’ after ‘‘ex-
empt from tax under this title’’. 
(d) CONFORMING AMENDMENT.—The heading for 
section 118 of such Code is amended by striking ‘‘OF A 
CORPORATION’’ and inserting ‘‘OF
CORPORATIONS 
AND PARTNERSHIPS’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to contributions made after the 
date of the enactment of this Act. 
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(f) NO INFERENCE.—Nothing contained in this sec-
tion or the amendments made by this section shall be con-
strued to create any inference under the Internal Revenue 
Code of 1986 with respect to the treatment of contribu-
tions to the capital of partnerships made on or before the 
date of the enactment of this Act. 
Æ 
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