‘‘(ii) computer software (as defined in 
section 197(e)(3)(B)) to which section 167 
applies, 
‘‘(B) which is section 1245 property (as 
defined in section 1245(a)(3)), and 
‘‘(C) which is acquired by purchase for use 
in the active conduct of a trade or business.’’. 
(2) NO
COMPUTER
SOFTWARE
INCLUDED
AS 
SECTION 197 INTANGIBLE.— 
(A) IN GENERAL.—Section 197(e)(3)(A) is 
amended to read as follows: 
‘‘(A) IN
GENERAL.—Any computer soft-
ware.’’. 
(B) CONFORMING
AMENDMENT.—Section 
167(f)(1)(B) is amended by striking ‘‘; except 
that such term shall not include any such soft-
ware which is an amortizable section 197 intan-
gible’’. 
(b) 2-YEAR APPLICABLE RECOVERY PERIOD
FOR 
DEPRECIATION OF COMPUTERS AND PERIPHERAL EQUIP-
MENT.— 
(1) IN GENERAL.—Section 168(c) (relating to 
applicable recovery period) is amended by adding at 
the end the following flush sentence:
‘‘In the case of 5-year property which is a computer or 
peripheral equipment, the applicable recovery period shall 
be 2 years.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 168(g)(3)(C) (relating to alter-
native depreciation system for certain property) 
is amended to read as follows: 
‘‘(C) QUALIFIED TECHNOLOGICAL EQUIP-
MENT.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (ii), in the case of any 
qualified technological equipment, the re-
covery period used for purposes of para-
graph (2) shall be 5 years. 
‘‘(ii) COMPUTERS
OR
PERIPHERAL 
EQUIPMENT.—In the case of any computer 
or peripheral equipment, the recovery pe-
riod used for purposes of paragraph (2) 
shall be 2 years.’’. 
(B) Section 168(j)(2) (relating to deprecia-
tion of property on Indian reservations) is 
amended by adding at the end the following 
flush sentence:
‘‘In the case of 5-year property which is a computer or 
peripheral equipment, the applicable recovery period shall 
be 1 year.’’. 
(C) Section 467(e)(3)(A) (relating to cer-
tain payments for the use of property or serv-
ices) is amended by adding at the end the fol-
lowing flush sentence: 
‘‘In the case of 5-year property which is a computer or 
peripheral equipment, the applicable recovery period shall 
be 2 years.’’. 
(c) 2-YEAR DEPRECIATION PERIOD FOR COMPUTER 
SOFTWARE.—Section 167(f)(1)(A) is amended by striking 
‘‘36 months’’ and inserting ‘‘24 months’’. 
(d) ADJUSTMENTS ON DEPRECIATION LIMITS FOR 
LUXURY AUTOMOBILES.— 
(1) IN GENERAL.—Section 280F(a)(1)(A) (re-
lating to limitation on amount of depreciation for 
luxury automobiles) is amended— 
(A) by striking ‘‘$2,560’’ in clause (i) and 
inserting ‘‘$6,000’’; 
(B) by striking ‘‘$4,100’’ in clause (ii) and 
inserting ‘‘$9,600’’; 
(C) by striking ‘‘$2,450’’ in clause (iii) and 
inserting ‘‘$5,760’’; and
(D) by striking ‘‘$1,475’’ in clause (iv) and 
inserting ‘‘$3,460’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 280F(a)(1)(B)(ii) (relating to 
disallowed deductions allowed for years after re-
covery period) is amended by striking ‘‘$1,475’’ 
each place that it appears and inserting 
‘‘$3,460’’. 
(B) Section 280F(d)(7) is amended— 
(i) in subparagraph (A) by striking 
‘‘1988’’ and inserting ‘‘2006’’, and 
(ii) in subparagraph (B)(i)(II) by 
striking ‘‘1987’’ and inserting ‘‘2005’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service after 
December 31, 2005. 
SEC. 202. SIMPLIFICATION OF ESTIMATED TAX RULES. 
(a) IN GENERAL.—Section 6654(d)(1) (relating to 
failure by an individual to pay estimated income tax) is 
amended by striking subparagraph (C). 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act.
SEC. 203. QUALIFIED JOINT VENTURES OPERATED BY HUS-
BAND AND WIFE AS CO-OWNERS. 
(a) IN GENERAL.—Section 761 of the Internal Rev-
enue Code of 1986 (defining terms for purposes of part-
nerships) is amended by redesignating subsection (f) as 
subsection (g) and by inserting after subsection (e) the 
following new subsection: 
‘‘(f) QUALIFIED JOINT VENTURE.— 
‘‘(1) IN GENERAL.—In the case of a qualified 
joint venture conducted by a husband and wife who 
file a joint return for the taxable year, for purposes 
of this title— 
‘‘(A) such joint venture shall not be treat-
ed as a partnership, 
‘‘(B) all items of income, gain, loss, deduc-
tion, and credit shall be divided between the 
spouses in accordance with their respective in-
terests in the venture, and 
‘‘(C) each spouse shall take into account 
such spouse’s respective share of such items as 
if they were attributable to a trade or business 
conducted by such spouse as a sole proprietor. 
‘‘(2) QUALIFIED
JOINT
VENTURE.—For pur-
poses of paragraph (1), the term ‘qualified joint ven-
ture’ means any joint venture involving the conduct 
of a trade or business if—