The "American Innovation Act of 2025" seeks to foster new business growth and innovation by making significant changes to the Internal Revenue Code regarding start-up costs and the preservation of tax attributes. It aims to ease the financial burden on new businesses by allowing them to deduct a larger portion of their initial expenses immediately. Specifically, the bill amends Section 195 to increase the immediate deduction for start-up and organizational expenditures from the current $5,000 to $20,000 . This immediate deduction begins to phase out when total expenditures exceed $120,000 , and any remaining expenditures are amortized over 180 months. Crucially, these dollar amounts will be adjusted for inflation in future years, and unamortized expenditures can be fully deducted upon the complete liquidation or disposition of the business. Furthermore, the legislation addresses the preservation of tax benefits for start-up companies undergoing ownership changes. It introduces an exception to the limitations imposed by Sections 382 and 383, which typically restrict the use of net operating losses (NOLs) and general business credits after a change in ownership. This exception allows "net start-up losses" and "start-up excess credits" that arise during the initial three years of a business's operation to be preserved and utilized by the new loss corporation. To qualify for this preservation of tax attributes, the new loss corporation must continue the specific trade or business for at least a two-year period following the ownership change. These provisions are designed to encourage investment in and the acquisition of promising new businesses without penalizing them by stripping away their accumulated tax benefits, thereby supporting continued innovation and economic development.