SEC. 70431. Expansion of qualified small business stock gain exclusion.
(a) Phased increase in exclusion for gain from qualified small business stock.—
(1) IN GENERAL.—Section 1202(a)(1) is amended to read as follows:
“(1) IN GENERAL.— In the case of a taxpayer other than a corporation, gross income shall not include—
“(A) except as provided in paragraphs (3) and (4), 50 percent of any gain from the sale or exchange of qualified small business stock acquired on or before the applicable date and held for more than 5 years, and
“(B) the applicable percentage of any gain from the sale or exchange of qualified small business stock acquired after the applicable date and held for at least 3 years.”.
(2) APPLICABLE PERCENTAGE.—Section 1202(a) is amended by adding at the end the following new paragraph:
“(5) APPLICABLE PERCENTAGE.—The applicable percentage under paragraph (1) shall be determined under the following table:
| “ Years stock held: | Applicable percentage: |
|---|---|
| 3 years | 50% |
| 4 years | 75% |
| 5 years or more | 100%”. |
(3) APPLICABLE DATE; ACQUISITION DATE.—Section 1202(a), as amended by paragraph (2), is amended by adding at the end the following new paragraph:
“(6) APPLICABLE DATE; ACQUISITION DATE.—For purposes of this section—
“(A) APPLICABLE DATE.—The term ‘applicable date’ means the date of the enactment of this paragraph.
“(B) ACQUISITION DATE.—In the case of any stock which would (but for this paragraph) be treated as having been acquired before, on, or after the applicable date, whichever is applicable, the acquisition date for purposes of this section shall be the first day on which such stock was held by the taxpayer determined after the application of section 1223.”.
(4) CONTINUED TREATMENT AS NOT ITEM OF TAX PREFERENCE.—
(A) IN GENERAL.—Section 57(a)(7) is amended by striking “An amount” and inserting “In the case of stock acquired on or before the date of the enactment of the Creating Small Business Jobs Act of 2010, an amount”.
(B) CONFORMING AMENDMENT.—Section 1202(a)(4) is amended—
(i) by striking “, and” at the end of subparagraph (B) and inserting a period, and
(ii) by striking subparagraph (C).
(5) OTHER CONFORMING AMENDMENTS.—
(A) Paragraphs (3)(A) and (4)(A) of section 1202(a) are each amended by striking “paragraph (1)” and inserting “paragraph (1)(A)”.
(B) Paragraph (4)(A) of section 1202(a) is amended by inserting “and on or before the applicable date” after “2010”.
(C) Sections 1202(b)(2), 1202(g)(2)(A), and 1202(j)(1)(A) are each amended by striking “more than 5 years” and inserting “at least 3 years (more than 5 years in the case of stock acquired on or before the applicable date)”.
(6) EFFECTIVE DATES.—
(A) IN GENERAL.—Except as provided in subparagraph (B), the amendments made by this subsection shall apply to taxable years beginning after the date of the enactment of this Act.
(B) CONTINUED TREATMENT AS NOT ITEM OF TAX PREFERENCE.—The amendments made by paragraph (4) shall take effect as if included in the enactment of section 2011 of the Creating Small Business Jobs Act of 2010.
(b) Increase in per issuer limitation.—
(1) IN GENERAL.—Subparagraph (A) of section 1202(b)(1) is amended to read as follows:
“(A) the applicable dollar limit for the taxable year, or”.
(2) APPLICABLE DOLLAR LIMIT.—Section 1202 (b) is amended by adding at the end the following:
“(4) APPLICABLE DOLLAR LIMIT.—For purposes of paragraph (1)(A), the applicable dollar limit for any taxable year with respect to eligible gain from 1 or more dispositions by a taxpayer of qualified business stock of a corporation is—
“(A) if such stock was acquired by the taxpayer on or before the applicable date, $10,000,000, reduced by the aggregate amount of eligible gain taken into account by the taxpayer under subsection (a) for prior taxable years and attributable to dispositions of stock issued by such corporation and acquired by the taxpayer before, on, or after the applicable date, and
“(B) if such stock was acquired by the taxpayer after the applicable date, $15,000,000, reduced by the sum of—
“(i) the aggregate amount of eligible gain taken into account by the taxpayer under subsection (a) for prior taxable years and attributable to dispositions of stock issued by such corporation and acquired by the taxpayer before, on, or after the applicable date, plus
“(ii) the aggregate amount of eligible gain taken into account by the taxpayer under subsection (a) for the taxable year and attributable to dispositions of stock issued by such corporation and acquired by the taxpayer on or before the applicable date.
“(5) INFLATION ADJUSTMENT.—
“(A) IN GENERAL.—In the case of any taxable year beginning after 2026, the $15,000,000 amount in paragraph (4)(B) shall 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 2025’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.
If any increase under this subparagraph is not a multiple of $10,000, such increase shall be rounded to the nearest multiple of $10,000.
“(B) NO INCREASE ONCE LIMIT REACHED.—If, for any taxable year, the eligible gain attributable to dispositions of stock issued by a corporation and acquired by the taxpayer after the applicable date exceeds the applicable dollar limit, then notwithstanding any increase under subparagraph (A) for any subsequent taxable year, the applicable dollar limit for such subsequent taxable year shall be zero.”.
(3) SEPARATE RETURNS.—Subparagraph (A) of section 1202(b)(3) is amended to read as follows:
“(A) SEPARATE RETURNS.—In the case of a separate return by a married individual for any taxable year—
“(i) paragraph (4)(A) shall be applied by substituting ‘$5,000,000’ for ‘$10,000,000’, and
“(ii) paragraph (4)(B) shall be applied by substituting one-half of the dollar amount in effect under such paragraph for the taxable year for the amount so in effect.”.
(4) EFFECTIVE DATE.—The amendments made by this subsection shall apply to taxable years beginning after the date of the enactment of this Act.
(c) Increase in limit in aggregate gross assets.—
(1) IN GENERAL.—Subparagraphs (A) and (B) of section 1202(d)(1) are each amended by striking “$50,000,000” and inserting “$75,000,000”.
(2) INFLATION ADJUSTMENT.—Section 1202(b) is amended by adding at the end the following:
“(4) INFLATION ADJUSTMENT.—In the case of any taxable year beginning after 2026, the $75,000,000 amounts in paragraphs (1)(A) and (1)(B) shall each be increased by an amount equal to—
“(A) such dollar amount, multiplied by
“(B) 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 2025’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.
If any increase under this paragraph is not a multiple of $10,000, such increase shall be rounded to the nearest multiple of $10,000.”.
(3) EFFECTIVE DATE.—The amendments made by this subsection shall apply to stock issued after the date of the enactment of this Act.
SEC. 70432. Repeal of revision to de minimis rules for third party network transactions.
(a) Reinstatement of exception for de minimis payments as in effect prior to enactment of American Rescue Plan Act of 2021.—
(1) IN GENERAL.—Section 6050W(e) is amended to read as follows:
“(e) Exception for de minimis payments by third party settlement organizations.—A third party settlement organization shall be required to report any information under subsection (a) with respect to third party network transactions of any participating payee only if—
“(1) the amount which would otherwise be reported under subsection (a)(2) with respect to such transactions exceeds $20,000, and
“(2) the aggregate number of such transactions exceeds 200.”.
(2) EFFECTIVE DATE.—The amendment made by this subsection shall take effect as if included in section 9674 of the American Rescue Plan Act.
(b) Application of de minimis rule for third party network transactions to backup withholding.—
(1) IN GENERAL.—Section 3406(b) is amended by adding at the end the following new paragraph:
“(8) OTHER REPORTABLE PAYMENTS INCLUDE PAYMENTS IN SETTLEMENT OF THIRD PARTY NETWORK TRANSACTIONS ONLY WHERE AGGREGATE TRANSACTIONS EXCEED REPORTING THRESHOLD FOR THE CALENDAR YEAR.—
“(A) IN GENERAL.—Any payment in settlement of a third party network transaction required to be shown on a return required under section 6050W which is made during any calendar year shall be treated as a reportable payment only if—
“(i) the aggregate number of transactions with respect to the participating payee during such calendar year exceeds the number of transactions specified in section 6050W(e)(2), and
“(ii) the aggregate amount of transactions with respect to the participating payee during such calendar year exceeds the dollar amount specified in section 6050W(e)(1) at the time of such payment.
“(B) EXCEPTION IF THIRD PARTY NETWORK TRANSACTIONS MADE IN PRIOR YEAR WERE REPORTABLE.—Subparagraph (A) shall not apply with respect to payments to any participating payee during any calendar year if one or more payments in settlement of third party network transactions made by the payor to the participating payee during the preceding calendar year were reportable payments.”.
(2) EFFECTIVE DATE.—The amendment made by this subsection shall apply to calendar years beginning after December 31, 2024.
SEC. 70433. Increase in threshold for requiring information reporting with respect to certain payees.
(a) In general.—Section 6041(a) is amended by striking “$600” and inserting “$2,000”.
(b) Inflation adjustment.—Section 6041 is amended by adding at the end the following new subsection:
“(h) Inflation adjustment.—In the case of any calendar year after 2026, the dollar amount in subsection (a) shall be increased by an amount equal to—
“(1) such dollar amount, multiplied by
“(2) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year, determined by substituting ‘calendar year 2025’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.
If any increase under the preceding sentence is not a multiple of $100, such increase shall be rounded to the nearest multiple of $100.”.
(c) Application to reporting on remuneration for services.—Section 6041A(a)(2) is amended by striking “is $600 or more” and inserting “equals or exceeds the dollar amount in effect for such calendar year under section 6041(a)”.
(d) Application to backup withholding.—Section 3406(b)(6) is amended—
(1) by striking “$600” in subparagraph (A) and inserting “the dollar amount in effect for such calendar year under section 6041(a)”, and
(2) by striking “only where aggregate for calendar year is $600 or more” in the heading and inserting “only where in excess of threshold”.
(e) Conforming amendments.—
(1) The heading of section 6041(a) is amended by striking “of $600 or more” and inserting “exceeding threshold”.
(2) Section 6041(a) is amended by striking “taxable year” and inserting “calendar year”.
(f) Effective date.—The amendments made by this section shall apply with respect to payments made after December 31, 2025.
SEC. 70434. Treatment of certain qualified sound recording productions.
(a) Election to treat costs as expenses.—Section 181(a)(1) is amended by striking “qualified film or television production, and any qualified live theatrical production,” and inserting “qualified film or television production, any qualified live theatrical production, and any qualified sound recording production”.
(b) Dollar limitation.—Section 181(a)(2) is amended by adding at the end the following new subparagraph:
“(C) QUALIFIED SOUND RECORDING PRODUCTION.—Paragraph (1) shall not apply to so much of the aggregate cost of any qualified sound recording production, or to so much of the aggregate, cumulative cost of all such qualified sound recording productions in the taxable year, as exceeds $150,000.”.
(c) No other deduction or amortization deduction allowable.—Section 181(b) is amended by striking “qualified film or television production or any qualified live theatrical production” and inserting “qualified film or television production, any qualified live theatrical production, or any qualified sound recording production”.
(d) Election.—Section 181(c)(1) is amended by striking “qualified film or television production or any qualified live theatrical production” and inserting “qualified film or television production, any qualified live theatrical production, or any qualified sound recording production”.
(e) Qualified sound recording production defined.—Section 181 is amended by redesignating subsections (f) and (g) as subsections (g) and (h), respectively, and by inserting after subsection (e) the following new subsection:
“(f) Qualified sound recording production.—For purposes of this section, the term ‘qualified sound recording production’ means a sound recording (as defined in section 101 of title 17, United States Code) produced and recorded in the United States.”.
(f) Application of termination.—Section 181(h), as redesignated by subsection (e), is amended by striking “qualified film and television productions or qualified live theatrical productions” and inserting “qualified film and television productions, qualified live theatrical productions, or qualified sound recording productions”.
(g) Bonus depreciation.—
(1) QUALIFIED SOUND RECORDING PRODUCTION AS QUALIFIED PROPERTY.—Section 168(k)(2)(A)(i) is amended—
(A) by striking “or” at the end of subclause (IV), by inserting “or” at the end of subclause (V), and by inserting after subclause (V) the following:
“(VI) which is a qualified sound recording production (as defined in subsection (f) of section 181) for which a deduction would have been allowable under section 181 without regard to subsections (a)(2) and (h) of such section or this subsection, and”, and
(B) in subclauses (IV) and (V) (as so amended) by striking “without regard to subsections (a)(2) and (g)” both places it appears and inserting “without regard to subsections (a)(2) and (h)”.
(2) PRODUCTION PLACED IN SERVICE.—Section 168(k)(2)(H) is amended by striking “and” at the end of clause (i), by striking the period at the end of clause (ii) and inserting “, and”, and by adding after clause (ii) the following:
“(iii) a qualified sound recording production shall be considered to be placed in service at the time of initial release or broadcast.”.
(h) Conforming amendments.—
(1) The heading for section 181 is amended to read as follows: “treatment of certain qualified productions.”.
(2) The table of sections for part VI of subchapter B of chapter 1 is amended by striking the item relating to section 181 and inserting the following new item:
“Sec. 181. Treatment of certain qualified productions. ”.
(i) Effective date.—The amendments made by this section shall apply to productions commencing in taxable years ending after the date of the enactment of this Act.
SEC. 70435. Exclusion of interest on loans secured by rural or agricultural real property.
(a) In general.—Part III of subchapter B of chapter 1, as amended by the preceding provisions of this Act, is amended by inserting after section 139K the following new section:
“SEC. 139L. Interest on loans secured by rural or agricultural real property.
“(a) In general.—Gross income shall not include 25 percent of the interest received by a qualified lender on any qualified real estate loan.
“(b) Qualified lender.—For purposes of this section, the term ‘qualified lender’ means—
“(1) any bank or savings association the deposits of which are insured under the Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.),
“(2) any State- or federally-regulated insurance company,
“(3) any entity wholly owned, directly or indirectly, by a company that is treated as a bank holding company for purposes of section 8 of the International Banking Act of 1978 (12 U.S.C. 3106) if—
“(A) such entity is organized, incorporated, or established under the laws of the United States or any State, and
“(B) the principal place of business of such entity is in the United States (including any territory of the United States),
“(4) any entity wholly owned, directly or indirectly, by a company that is considered an insurance holding company under the laws of any State if such entity satisfies the requirements described in subparagraphs (A) and (B) of paragraph (3), and
“(5) with respect to interest received on a qualified real estate loan secured by real estate described in subsection (c)(3)(A), any federally chartered instrumentality of the United States established under section 8.1(a) of the Farm Credit Act of 1971 (12 U.S.C. 2279aa-1(a)).
“(c) Qualified real estate loan.—For purposes of this section—
“(1) IN GENERAL.—The term ‘qualified real estate loan’ means any loan—
“(A) secured by—
“(i) rural or agricultural real estate, or
“(ii) a leasehold mortgage (with a status as a lien) on rural or agricultural real estate,
“(B) made to a person other than a specified foreign entity (as defined in section 7701(a)(51)), and
“(C) made after the date of the enactment of this section.
For purposes of the preceding sentence, the determination of whether property securing such loan is rural or agricultural real estate shall be made as of the time the interest income on such loan is accrued.
“(2) REFINANCINGS.—For purposes of subparagraphs (A) and (C) of paragraph (1), a loan shall not be treated as made after the date of the enactment of this section to the extent that the proceeds of such loan are used to refinance a loan which was made on or before the date of the enactment of this section (or, in the case of any series of refinancings, the original loan was made on or before such date).
“(3) RURAL OR AGRICULTURAL REAL ESTATE.—The term ‘rural or agricultural real estate’ means—
“(A) any real property which is substantially used for the production of one or more agricultural products,
“(B) any real property which is substantially used in the trade or business of fishing or seafood processing, and
“(C) any aquaculture facility.
Such term shall not include any property which is not located in a State or a possession of the United States.
“(4) AQUACULTURE FACILITY.—The term ‘aquaculture facility’ means any land, structure, or other appurtenance that is used for aquaculture (including any hatchery, rearing pond, raceway, pen, or incubator).
“(d) Coordination with section 265.—In the case of any qualified real estate loan, section 265 shall be applied—
“(1) by treating any qualified real estate loan for purposes of subsection (a)(2) thereof as an obligation the interest on which is wholly exempt from the taxes imposed by this subtitle,
“(2) by substituting ‘25 percent of the interest on indebtedness’ for ‘Interest on indebtedness’ in such subsection (a)(2),
“(3) by treating 25 percent of the adjusted basis of any qualified real estate loan as adjusted basis of a tax-exempt obligation described in subsection (b)(4)(B) thereof, and
“(4) by substituting ‘25 percent of the amount of such indebtedness’ for ‘the amount of such indebtedness’ in subsection (b)(6)(A)(a)(ii) thereof.”.
(b) Clerical amendment.—The table of sections for part III of subchapter B of chapter 1, as amended by the preceding provisions of this Act, is amended by inserting after the item relating to section 139K the following new item:
“Sec. 139L. Interest on loans secured by rural or agricultural real property. ”.
(c) Effective date.—The amendments made by this section shall apply to taxable years ending after the date of the enactment of this Act.
SEC. 70436. Reduction of transfer and manufacturing taxes for certain devices.
(a) Transfer tax.—Section 5811(a) is amended to read as follows:
“(a) Rate.—There shall be levied, collected, and paid on firearms transferred a tax at the rate of—
“(1) $200 for each firearm transferred in the case of a machinegun or a destructive device, and
“(2) $0 for any firearm transferred which is not described in paragraph (1).”.
(b) Making tax.—Section 5821(a) is amended to read as follows:
“(a) Rate.—There shall be levied, collected, and paid upon the making of a firearm a tax at the rate of—
“(1) $200 for each firearm made in the case of a machinegun or a destructive device, and
“(2) $0 for any firearm made which is not described in paragraph (1).”.
(c) Conforming amendment.—Section 4182(a) is amended by adding at the end the following: “For purposes of the preceding sentence, any firearm described in section 5811(a)(2) shall be deemed to be a firearm on which the tax provided by section 5811 has been paid.”
(d) Effective date.—The amendments made by this section shall apply to calendar quarters beginning more than 90 days after the date of the enactment of this Act.
SEC. 70437. Treatment of capital gains from the sale of certain farmland property.
(a) In general.—Part IV of subchapter O of chapter 1 is amended by redesignating section 1062 as section 1063 and by inserting after section 1061 the following new section:
“SEC. 1062. Gain from the sale or exchange of qualified farmland property to qualified farmers.
“(a) Election to pay tax in installments.—In the case of gain from the sale or exchange of qualified farmland property to a qualified farmer, at the election of the taxpayer, the portion of the net income tax of such taxpayer for the taxable year of the sale or exchange which is equal to the applicable net tax liability shall be paid in 4 equal installments.
“(b) Rules relating to installment payments.—
“(1) DATE FOR PAYMENT OF INSTALLMENTS.—If an election is made under subsection (a), the first installment shall be paid on the due date (determined without regard to any extension of time for filing the return) for the return of tax for the taxable year in which the sale or exchange occurs and each succeeding installment shall be paid on the due date (as so determined) for the return of tax for the taxable year following the taxable year with respect to which the preceding installment was made.
“(2) ACCELERATION OF PAYMENT.—
“(A) IN GENERAL.—If there is an addition to tax for failure to timely pay any installment required under this section, then the unpaid portion of all remaining installments shall be due on the date of such failure.
“(B) INDIVIDUALS.—In the case of an individual, if the individual dies, then the unpaid portion of all remaining installment shall be paid on the due date for the return of tax for the taxable year in which the taxpayer dies.
“(C) C CORPORATIONS.—In the case of a taxpayer which is a C corporation, trust, or estate, if there is a liquidation or sale of substantially all the assets of the taxpayer (including in a title 11 or similar case), a cessation of business by the taxpayer (in the case of a C corporation), or any similar circumstance, then the unpaid portion of all remaining installments shall be due on the date of such event (or in the case of a title 11 or similar case, the day before the petition is filed). The preceding sentence shall not apply to the sale of substantially all the assets of a taxpayer to a buyer if such buyer enters into an agreement with the Secretary under which such buyer is liable for the remaining installments due under this subsection in the same manner as if such buyer were the taxpayer.
“(3) PRORATION OF DEFICIENCY TO INSTALLMENTS.—If an election is made under subsection (a) to pay the applicable net tax liability in installments and a deficiency has been assessed with respect to such applicable net tax liability, the deficiency shall be prorated to the installments payable under subsection (a). The part of the deficiency so prorated to any installment the date for payment of which has not arrived shall be collected at the same time as, and as a part of, such installment. The part of the deficiency so prorated to any installment the date for payment of which has arrived shall be paid upon notice and demand from the Secretary. This section shall not apply if the deficiency is due to negligence, to intentional disregard of rules and regulations, or to fraud with intent to evade tax.
“(c) Election.—
“(1) IN GENERAL.—Any election under subsection (a) shall be made not later than the due date for the return of tax for the taxable year described in subsection (a).
“(2) PARTNERSHIPS AND S CORPORATIONS.—In the case of a sale or exchange described in subsection (a) by a partnership or S corporation, the election under subsection (a) shall be made at the partner or shareholder level. The Secretary may prescribe such regulations or other guidance as necessary to carry out the purposes of this paragraph.
“(d) Definitions.—For purposes of this section—
“(1) APPLICABLE NET TAX LIABILITY.—
“(A) IN GENERAL.—The applicable net tax liability with respect to the sale or exchange of any property described in subsection (a) is the excess (if any) of—
“(i) such taxpayer’s net income tax for the taxable year, over
“(ii) such taxpayer’s net income tax for such taxable year determined without regard to any gain recognized from the sale or exchange of such property.
“(B) NET INCOME TAX.—The term ‘net income tax’ means the regular tax liability reduced by the credits allowed under subparts A, B, and D of part IV of subchapter A.
“(2) QUALIFIED FARMLAND PROPERTY.—
“(A) IN GENERAL.—The term ‘qualified farmland property’ means real property located in the United States—
“(i) which—
“(I) has been used by the taxpayer as a farm for farming purposes, or
“(II) leased by the taxpayer to a qualified farmer for farming purposes,
during substantially all of the 10-year period ending on the date of the qualified sale or exchange, and
“(ii) which is subject to a covenant or other legally enforceable restriction which prohibits the use of such property other than as a farm for farming purposes for any period before the date that is 10 years after the date of the sale or exchange described in subsection (a).
For purposes of clause (i), property which is used or leased by a partnership or S corporation in a manner described in such clause shall be treated as used or leased in such manner by each person who holds a direct or indirect interest in such partnership or S corporation.
“(B) FARM; FARMING PURPOSES.—The terms ‘farm’ and ‘farming purposes’ have the respective meanings given such terms under section 2032A(e).
“(3) QUALIFIED FARMER.—The term ‘qualified farmer’ means any individual who is actively engaged in farming (within the meaning of subsections (b) and (c) of section 1001 of the Food Security Act of 1986 (7 U.S.C. 1308–1(b) and (c))).
“(e) Return requirement.—A taxpayer making an election under subsection (a) shall include with the return for the taxable year of the sale or exchange described in subsection (a) a copy of the covenant or other legally enforceable restriction described in subsection (d)(2)(A)(ii).”.
(b) Clerical amendment.—The table of sections for part IV of subchapter O of chapter 1 is amended by redesignating the item relating to section 1062 as relating to section 1063 and by inserting after the item relating to section 1061 the following new item:
“Sec. 1062. Gain from the sale or exchange of qualified farmland property to qualified farmers.”.
(c) Effective date.—The amendments made by this section shall apply to sales or exchanges in taxable years beginning after the date of the enactment of this Act.
SEC. 70438. Extension of rules for treatment of certain disaster-related personal casualty losses.
For purposes of applying section 304(b) of the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (division EE of Public Law 116–260), section 301 of such Act shall be applied by substituting the date of the enactment of this section for “the date of the enactment of this Act” each place it appears.
SEC. 70439. Restoration of taxable REIT subsidiary asset test.
(a) In general.—Section 856(c)(4)(B)(ii) is amended by striking “20 percent” and inserting “25 percent”.
(b) Effective date.—The amendment made by this section shall apply to taxable years beginning after December 31, 2025.