Geothermal Tax Parity Act

This bill amends the Internal Revenue Code to provide tax parity for geothermal energy by allowing amortization of geological and geophysical costs and by exempting working interests in geothermal properties from passive loss limitations. It applies to taxable years beginning after enactment.

Sec. 2, Amortization of geological and geophysical expenditures: The bill expands current law, which allows amortization of such costs for oil or gas, to also cover geothermal deposits. This applies to amounts paid or incurred in taxable years beginning after the date of enactment.

Sec. 3, Exception to passive loss limitations for working interests in geothermal properties: The bill extends the existing exception for working interests in oil and gas properties to also include geothermal properties. This means that losses from a working interest in a geothermal property are not subject to the passive activity loss rules. The change applies to taxable years beginning after the date of enactment.