Sec. 721. EXPANDED SMALL BANK ACCESS TO S CORPORATION TREATMENT

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## SEC. 721 EXPANDED SMALL BANK ACCESS TO S CORPORATION TREATMENT ###

(a)Study The Comptroller General of the United States shall conduct a study of— ####

(1)possible revisions to the rules governing S corporations, including— #####

(A)increasing the permissible number of shareholders in such corporations; #####

(B)permitting shares of such corporations to be held in individual retirement accounts; #####

(C)clarifying that interest on investments held for safety, soundness, and liquidity purposes should not be considered to be passive income; #####

(D)discontinuation of the treatment of stock held by bank directors as a disqualifying personal class of stock for such corporations; and #####

(E)improving Federal tax treatment of bad debt and interest deductions; and ####

(2)what impact such revisions might have on community banks. ###

(b)Report to the Congress Not later than 6 months after the date of the enactment of this Act, the Comptroller General of the United States shall submit a report to the Congress on the results of the study conducted under subsection (a). ###

(c)Definition For purposes of this section, the term “**S corporation**” has the meaning given the term in section 1361(a)(1) of the Internal Revenue Code of 1986.