Renewing Investment in American Workers and Supply Chains Act

Section 168(e)(3)(F) of the Internal Revenue Code of 1986 is amended to read as follows:

The term 20-year property means—

(i) initial clearing and grading land improvements with respect to any electric utility transmission and distribution plant,

(ii) any nonresidential real property, and

(iii) any residential rental property.

Section 168(k)(2)(A)(i)(I) of such Code is amended by inserting (other than nonresidential real property and residential rental property) before the comma at the end.

The table contained in section 168(c) of such Code is amended—

(A) by striking the row relating to residential rental property, and

(B) by striking the row relating to nonresidential real property.

Section 168 of such Code is amended by adding at the end the following new subsection:

The deduction otherwise provided under section 167(a) with respect to nonresidential real property and residential rental property for any taxable year shall be equal to the product of such amount (determined without regard to this subsection) multiplied by the applicable neutral cost recovery ratio with respect to such property for such taxable year.

For purposes of paragraph (1), the term applicable neutral cost recovery ratio means, with respect to any property for any taxable year, the product (not less than 1 and rounded to the nearest 0.001) of—

(A) the quotient of—

(i) the gross domestic product deflator (as determined by the Bureau of Economic Analysis) for the calendar quarter ending in such taxable year which corresponds to the calendar quarter during which such property was placed in service by the taxpayer, divided by

(ii) the gross domestic product deflator (as determined by the Bureau of Economic Analysis) for the calendar quarter during which such property was placed in service by the taxpayer, multiplied by

(B) 1.03 to the nth power, where n is the number of full years in the period beginning on the 1st day of the calendar quarter during which such property was placed in service by the taxpayer and ending on the day before the beginning of the corresponding calendar quarter ending during such taxable year.

In the case of nonresidential real property or residential rental property which is placed in service before the date of enactment of this subsection, subparagraphs (A)(i), (A)(ii), and (B) of paragraph (2) shall each be applied by substituting calendar quarter which includes the date of enactment of this subsection for calendar quarter during which such property was placed in service by the taxpayer.

The additional amount determined under this section by reason of this subsection shall not be taken into account in determining the adjusted basis of any applicable property or of any interest in a pass-thru entity which holds such property and shall not be treated as a deduction for depreciation for purposes of sections 1245 and 1250.

For purposes of subparagraph (A), the term pass-thru entity means—

(i) a regulated investment company,

(ii) a real estate investment trust,

(iii) an S corporation,

(iv) a partnership,

(v) an estate or trust, and

(vi) a common trust fund.

The amendments made by subsection (a) shall apply to property placed in service after the date of the enactment of this Act, in taxable years ending after such date.

The amendments made by subsection (b) shall apply to taxable years ending after the date of the enactment of this Act.