Bill > HR1778

This bill aims to simplify and expand tax deductions for start-up businesses and protect their ability to carry forward net operating losses (NOLs) and tax credits after ownership changes. Specifically, the bill modifies Section 195 of the Internal Revenue Code to allow new businesses to deduct up to $20,000 in start-up and organizational expenses in the first year, with the remaining expenses amortized over 180 months. The bill adjusts the $20,000 and $120,000 thresholds for inflation starting in 2027 and provides mechanisms for deducting these expenses if the business is later liquidated or sold. Additionally, the bill creates special provisions for start-up businesses experiencing an ownership change, allowing them to preserve more of their net operating losses and tax credits by introducing a "start-up period" concept that protects losses and credits from the first three years of a business's active operations. The changes will apply to expenditures and taxable years beginning after December 31, 2025, with the goal of encouraging new business formation by providing more flexible tax treatment for emerging companies.

Budget and Finance

https://www.congress.gov/bill/119th-congress/house-bill/1778/all-info