Sec. 13543. Modification of treatment of S corporation conversions to C corporations
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/bill/115/hr/1/eas/section-13543·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Section 481 is amended by adding at the end the following new sub-section: IN GENERAL.—In the case of an eligible terminated S corporation, any increase in tax under this chapter by reason of an adjustment required by subsection (a)(2), and which is attributable to such corporation’s revocation described in paragraph (2)(A)(ii), shall be taken into account ratably during the 6-taxable year period beginning with the year of change. . Section 1371 is amended by adding at the end the following new subsection:
In the case of a distribution of money by an eligible terminated S corporation after the post-termination transition period, the accumulated adjustments account shall be allocated to such distribution, and the distribution shall be chargeable to accumulated earnings and profits, in the same ratio as the amount of such accumulated adjustments account bears to the amount of such accumulated earnings and profits. For purposes of this subsection, the term eligible terminated S corporation means any C corporation— which— was an S corporation on the day before the date of the enactment of the Tax Cuts and Jobs Act , and during the 2-year period beginning on the date of such enactment makes a revocation of its election under section 1362(a), and the owners of the stock of which, determined on the date such revocation is made, are the same owners (and in identical proportions) as on the date of such enactment. .
The amendments made by this section shall apply to distributions after the date of the enactment of this Act.