Summary: S.1520 — 100th Congress (1987-1988)All Information (Except Text)

There is one summary for S.1520. Bill summaries are authored by CRS.

Shown Here:
Introduced in Senate (07/21/1987)

Amends the Internal Revenue Code to permit a partnership, S corporation, or personal service corporation, unless it is part of a tiered structure, to elect to have a taxable year other than the required one, but generally only if the deferral period of the taxable year elected is three months or less. (Current law requires partnerships, S corporations, and personal service corporations, in most cases, to conform their taxable years to the calendar years used by their owners.)

Subjects the principals of a partnership or S corporation electing to change taxable years to additional estimated tax requirements to offset any tax deferral resulting from such election. Imposes deduction limitations on a personal service corporation that changes taxable years.

Provides that an election with respect to taxable year shall be made by the partnership, S corporation, or personal service corporation and shall be binding on all partners and shareholders.

Sets forth the formula for determining the additional tax requirement when a taxpayer: (1) is a partner or shareholder in at least one such entity during any applicable election years of the entity that end within the taxpayer's taxable year; and (2) has an aggregate deferred tax exceeding $200 with respect to the entity. Describes payment procedures.

Requires the inclusion of specified information on returns filed by partnerships and S corporations that elect to use a non-required taxable year.

Limits the tax deduction permitted to a personal service corporation for amounts paid or incurred with respect to employee-owners when such a corporation: (1) elects to have a taxable year other than the required one; and (2) fails to meet certain minimum distribution requirements regarding non-dividend amounts paid to owners.