H.R.4056 - S Corporation Reform Act of 1993103rd Congress (1993-1994)
|Sponsor:||Rep. Hoagland, Peter [D-NE-2] (Introduced 03/16/1994)|
|Committees:||House - Ways and Means|
|Latest Action:||03/16/1994 Referred to the House Committee on Ways and Means. (All Actions)|
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Summary: H.R.4056 — 103rd Congress (1993-1994)All Information (Except Text)
Introduced in House (03/16/1994)
TABLE OF CONTENTS:
Title I: Eligible Shareholders of S Corporation
Subtitle A: Number of Shareholders
Subtitle B: Persons Allowed as Shareholders
Subtitle C: Other Provisions
Title II: Qualification and Eligibility Requirements
for S Corporations
Subtitle A: One Class of Stock
Subtitle B: Elections and Terminations
Subtitle C: Other Provisions
Title III: Taxation of S Corpporation Shareholders
Title IV: Effective Date
S Corporation Reform Act of 1993 - Title I: Eligible Shareholders of S Corporation - Subtitle A: Number of Shareholders - Amends the Internal Revenue Code to increase from 35 to 50 the maximum number of shareholders of an S corporation (small business corporation). Allows members of a family to be treated as one shareholder.
Subtitle B: Persons Allowed as Shareholders - Allows the following entities to be shareholders of S corporations: (1) certain tax-exempt organizations; (2) financial institutions that do not use the reserve method of accounting for bad debts; (3) nonresident aliens; and (4) certain small business trusts.
Subtitle C: Other Provisions - Extends the post-death qualification for certain trusts to be permitted as shareholders from 60 days to two years.
Title II: Qualification and Eligibility Requirements for S Corporation - Subtitle A: One Class of Stock- Allows an S corporation to issue qualified preferred stock.
Permits financial institutions to hold safe harbor debt.
Subtitle B: Elections and Terminations - Revises the rules on inadvertent terminations by certain trusts of the election to be an S corporation. Authorizes the Secretary of the Treasury to treat certain late elections as timely and to provide an automatic waiver procedure for certain inadvertent terminations.
Expands the post-termination transition period until 120 days after a determination is made that the election had terminated in a prior year.
Repeals excessive passive investment income as a termination event.
Increases the tax imposed on such excessive income.
Subtitle C: Other Provisions - Permits an S corporation to own more than 80 percent of another corporation's stock.
Repeals the requirement that partnership rules apply for fringe benefit purposes (making C corporation rules applicable).
Provides for the treatment of distributions during loss years.
Provides a consent dividend for S corporation elections to by-pass amounts in the accumulated adjustments account when making distributions.
Eliminates the need to keep records of certain generally small amounts of earnings arising before 1983.
Allows S corporations to make charitable contributions of inventory and scientific property.
Title III: Taxation of S Corporation Shareholders - Treats losses on liquidations of S corporations as ordinary to the extent the loss created by ordinary income pass-through triggered the liquidation.
Title IV: Effective Date - Makes this Act effective after December 31, 1994.