American Innovation Act of 2018
This bill consolidates and expands the existing tax deductions for start-up expenditures and organizational expenditures of taxpayers beginning an active trade or business.
For the year in which an active trade or business begins, the bill allows a single deduction equal to the lesser of (1) the aggregate amount of start-up and organizational expenditures paid or incurred in connection with the active trade or business, or (2) $20,000, reduced (but not below zero) by the amount by which the aggregate amount exceeds $120,000. The $20,000 and $120,000 limits must be adjusted for inflation after 2019.
The bill also allows a start-up business to use net operating loss carryforwards, net operating losses, and unused general business tax credits after an ownership change without being subject to certain limitations required under current law.
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