1. Short title This Act may be cited as the American Innovation Act of 2018 . 2. Simplification and expansion of deduction for start-up and organizational expenditures (a) In general Section 195 of the Internal Revenue Code of 1986 is amended by redesignating subsections (c) and (d) as subsections (d) and (e), respectively, and by striking all that precedes subsection (d) (as so redesignated) and inserting the following: 195. Start-up and organizational expenditures (a) Capitalization of expenditures Except as otherwise provided in this section, no deduction shall be allowed for start-up or organizational expenditures. (b) Election To deduct (1) In general If a taxpayer elects the application of this subsection with respect to any active trade or business— (A) the taxpayer shall be allowed a deduction for the taxable year in which such active trade or business begins in an amount equal to the lesser of— (i) the aggregate amount of start-up and organizational expenditures paid or incurred in connection with such active trade or business, or (ii) $20,000, reduced (but not below zero) by the amount by which such aggregate amount exceeds $120,000, and (B) the remainder of such start-up and organizational expenditures shall be charged to capital account and allowed as an amortization deduction determined by amortizing such expenditures ratably over the 180-month period beginning with the month in which the active trade or business begins. (2) Application to organizational expenditures In the case of organizational expenditures with respect to any corporation or partnership, the active trade or business referred to in paragraph (1) means the first active trade or business carried on by such corporation or partnership. (3) Inflation adjustment In the case of any taxable year beginning after December 31, 2019, the $20,000 and $120,000 amounts in paragraph (1)(A)(ii) 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