The American Innovation Act of 2026 seeks to foster new business growth by revising the tax treatment of start-up and organizational expenditures. It amends Section 195 of the Internal Revenue Code to allow taxpayers to immediately deduct up to $20,000 of these costs in the year an active trade or business begins. This immediate deduction phases out for aggregate expenditures exceeding $120,000 , with any remaining costs amortized over a 180-month period. The bill also permits the deduction of unamortized expenditures if a business is completely liquidated or disposed of, and the dollar amounts will be adjusted for inflation after 2026. To streamline the tax code, the bill repeals separate sections for corporate and partnership organizational expenditures, integrating these rules into the revised Section 195. Furthermore, it introduces crucial provisions to preserve tax benefits for new businesses undergoing ownership changes. The legislation creates an exception to the limitations under Sections 382 and 383, allowing the retention of net operating losses and general business credits that arise during a business's initial three-year "start-up period." This ensures that early-stage tax benefits are not lost, provided the new entity continues the business for at least two years after the ownership change.