CARES Windfall for the Wealthiest Repeal Act
Bill: S.147 | Sponsor: Sen. Whitehouse, Sheldon (D-RI)
Policy area: Taxation

Summary:
CARES Windfall for the Wealthiest Repeal Act
This bill restores and makes permanent the limitation on excess businesses losses of noncorporate taxpayers. It also allows taxpayers a carryback of their net operating losses arising in 2019 and 2020.

To amend the Internal Revenue Code of 1986 to impose a limitation on 
  excess business losses of non-corporate taxpayers and to modify the 
      carryback of net operating losses for certain taxable years.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``CARES Windfall for the Wealthiest 
Repeal Act''.

SEC. 2. LIMITATION ON EXCESS BUSINESS LOSSES OF NON-CORPORATE TAXPAYERS 
              RESTORED AND MADE PERMANENT.

    (a) In General.--Section 461(l)(1) of the Internal Revenue Code of 
1986 is amended to read as follows:
            ``(1) Limitation.--In the case of a taxpayer other than a 
        corporation, any excess business loss of the taxpayer shall not 
        be allowed.''.
    (b) Farming Losses.--Section 461 of such Code is amended by 
striking subsection (j).
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2017.

SEC. 3. CERTAIN TAXPAYERS ALLOWED CARRYBACK OF NET OPERATING LOSSES 
              ARISING IN 2019 AND 2020.

    (a) Carryback of Losses Arising in 2019 and 2020.--
            (1) In general.--Section 172(b)(1)(D)(i) of the Internal 
        Revenue Code of 1986 is amended to read as follows:
                            ``(i) In general.--In the case of any net 
                        operating loss arising in a taxable year 
                        beginning after December 31, 2018, and before 
                        January 1, 2021, and to which subparagraphs (B) 
                        and (C)(i) do not apply, such loss shall be a 
                        net operating loss carryback to each taxable 
                        year preceding the taxable year of such loss, 
                        but not to any taxable year beginning before 
                        January 1, 2018.''.
            (2) Conforming amendments.--
                    (A) The heading for section 172(b)(1)(D) of such 
                Code is amended by striking ``2018, 2019, and'' and 
                inserting ``2019 and''.
                    (B) Section 172(b)(1)(D) of such Code is amended by 
                striking clause (iii) and by redesignating clauses (iv) 
                and (v) as clauses (iii) and (iv), respectively.
                    (C) Section 172(b)(1)(D)(iii) of such Code, as so 
                redesignated, is amended by striking ``(i)(I)'' and 
                inserting ``(i)''.
                    (D) Section 172(b)(1)(D)(iv) of such Code, as so 
                redesignated, is amended--
                            (i) by striking ``If the 5-year carryback 
                        period under clause (i)(I)'' in subclause (I) 
                        and inserting ``If the carryback period under 
                        clause (i)'', and
                            (ii) by striking ``2018 or'' in subclause 
                        (II).
    (b) Disallowed for Certain Taxpayers.--Section 172(b)(1)(D) of such 
Code, as amended by the preceding provisions of this Act, is amended by 
adding at the end the following new clauses:
                            ``(v) Carryback disallowed for certain 
                        taxpayers.--Clause (i) shall not apply with 
                        respect to any loss arising in a taxable year 
                        in which--
                                    ``(I) the taxpayer (or any related 
                                person) is not allowed a deduction 
                                under this chapter for the taxable year 
                                by reason of section 162(m) or section 
                                280G, or
                                    ``(II) the taxpayer (or any related 
                                person) is a specified corporation for 
                                the taxable year.
                            ``(vi) Specified corporation.--For purposes 
                        of clause (v)--
                                    ``(I) In general.--The term 
                                `specified corporation' means, with 
                                respect to any taxable year, a 
                                corporation the aggregate distributions 
                                (including redemptions) of which during 
                                all taxable years ending after December 
                                31, 2017, exceed the sum of applicable 
                                stock issued of such corporation and 5 
                                percent of the fair market value of the 
                                stock of such corporation as of the 
                                last day of the taxable year.
                                    ``(II) Applicable stock issued.--
                                The term `applicable stock issued' 
                                means, with respect to any corporation, 
                                the aggregate fair market value of 
                                stock (as of the issue date of such 
                                stock) issued by the corporation during 
                                all taxable years ending after December 
                                31, 2017, in exchange for money or 
                                property other than stock in such 
                                corporation.
                                    ``(III) Certain preferred stock 
                                disregarded.--For purposes of subclause 
                                (I), stock described in section 
                                1504(a)(4), and distributions 
                                (including redemptions) with respect to 
                                such stock, shall be disregarded.
                            ``(vii) Related person.--For purposes of 
                        clause (v), a person is a related person to a 
                        taxpayer if the related person bears a 
                        relationship to the taxpayer specified in 
                        section 267(b) or section 707(b)(1).''.
    (c) Effective Date.--The amendments made by this section shall take 
effect as if included in the enactment of section 2303(b) of the 
Coronavirus Aid, Relief, and Economic Security Act.
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