Explanation of Bill H.R. 2297
Explanation of Bill H.R. 2297
This bill, introduced by Mr. Meehan and co-sponsored by Mr. Kelly, Mr. Neal, Mr. Larson, and Mr. Kind, aims to amend the Internal Revenue Code of 1986 to provide an exception from the passive loss rules for investments in high technology research small business pass-thru entities. The bill is known as the "Partnerships to Advance Revolutionary Technology and Novel Entrepreneurial Research Act" or the "PARTNER Act".
The bill proposes several changes to the current tax laws:
Exception from Passive Loss Rules for Investments in High Technology Research Small Business Pass-Thru Entities
Section 2 of the bill introduces an exception from passive loss rules for investments in high technology research small business pass-thru entities. This means that investments in these entities will not be classified as passive activities. The bill defines a "high technology research small business pass-thru entity" as a domestic pass-thru entity that meets certain criteria.
The bill also includes provisions related to aggregate gross assets, capital expenditures, and the treatment of losses, deductions, and credits for these entities.
Material Participation Not Required
The bill also removes the requirement of material participation for these entities, which means that investors do not need to actively participate in the business to enjoy the benefits of the exception from passive loss rules.
Allowance of Certain Research-Related Deductions and Credits for Alternative Minimum Tax
The bill allows certain research-related deductions and credits for high technology research small business pass-thru entities when calculating alternative minimum tax.
Exception to Limitation on Pass-Thru of Research Credit
The bill provides an exception to the limitation on the pass-thru of research credit for high technology research small business pass-thru entities.
Effective Date
The amendments made by this bill will apply to losses and credits arising in taxable years beginning after December 31, 2016.