H.R. 636 — what changed
FAA Extension, Safety, and Security Act of 2016
From Reported in House to Engrossed in House. 2 sections amended and 2 added between Reported in House and Engrossed in House.
Sec. 2 Expensing certain depreciable business assets for small business
In general—
Dollar limitation— Section 179(b)(1) of the Internal Revenue Code of 1986 is amended by striking “shall not exceed—” and all that follows and inserting “shall not exceed $500,000.”.
Reduction in limitation— Section 179(b)(2) of such Code is amended by striking “exceeds—” and all that follows and inserting “exceeds $2,000,000.”.
Computer software— Section 179(d)(1)(A)(ii) of such Code is amended by striking “, to which section 167 applies, and which is placed in service in a taxable year beginning after 2002 and before 2015” and inserting “and to which section 167 applies”.
Election— Section 179(c)(2) of such Code is amended—
changed
by striking “may not be revoked” and all that follows through “and before 2015”, 2015”; and
by striking “irrevocable” in the heading thereof.
Air conditioning and heating units— Section 179(d)(1) of such Code is amended by striking “and shall not include air conditioning or heating units”.
Qualified real property— Section 179(f) of such Code is amended—
changed
by striking “beginning after 2009 and before 2015” in paragraph (1), (1); and
by striking paragraphs (3) and (4).
Inflation adjustment— Section 179(b) of such Code is amended by adding at the end the following new paragraph:
“(6) Inflation adjustment
“(A) In general—In the case of any taxable year beginning after 2015, the dollar amounts in paragraphs (1) and (2) shall each be increased by an amount equal to—
“(i) such dollar amount, multiplied by
“(ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting “calendar year 2014” for “calendar year 1992” in subparagraph (B) thereof.
“(B) Rounding—The amount of any increase under subparagraph (A) shall be rounded to the nearest multiple of $10,000.”
Effective date— The amendments made by this section shall apply to taxable years beginning after December 31, 2014.
Sec. 3 Reduced recognition period for built-in gains of S corporations made permanent
added
In general— Paragraph (7) of section 1374(d) of the Internal Revenue Code of 1986 is amended to read as follows:
added “(7) Recognition period
added “(A) In general—The term recognition period means the 5-year period beginning with the first day of the first taxable year for which the corporation was an S corporation. For purposes of applying this section to any amount includible in income by reason of distributions to shareholders pursuant to section 593(e), the preceding sentence shall be applied without regard to the phrase “5-year”.
added “(B) Installment sales—If an S corporation sells an asset and reports the income from the sale using the installment method under section 453, the treatment of all payments received shall be governed by the provisions of this paragraph applicable to the taxable year in which such sale was made.”
added
Effective date— The amendment made by this section shall apply to taxable years beginning after December 31, 2014.
removed
The budgetary effects of this Act shall not be entered on either PAYGO scorecard maintained pursuant to section 4(d) of the Statutory Pay-As-You-Go Act of 2010.
Sec. 4 Permanent rule regarding basis adjustment to stock of S corporations making charitable contributions of property
added
added
In general— Section 1367(a)(2) of the Internal Revenue Code of 1986 is amended by striking the last sentence.
added
Effective date— The amendment made by this section shall apply to contributions made in taxable years beginning after December 31, 2014.
Sec. 5 Budgetary effects
addedadded The budgetary effects of this Act shall not be entered on either PAYGO scorecard maintained pursuant to section 4(d) of the Statutory Pay-As-You-Go Act of 2010.