Small Business and Financial Institutions Tax Relief Act of 2001

Small Business and Financial Institutions Tax Relief Act of 2001 - Amends the Internal Revenue Code, with respect to S corporations, to, among other things: (1) permit a trust constituting an individual retirement account as an S corporation bank shareholder; (2) exclude certain investment income from the definition of passive income for an S corporation bank; (3) increase the maximum number of shareholders a small business organization may have to be eligible to elect S corporation treatment; (4) state that stock held by a bank director as required by banking regulations (director qualifying stock) shall not be considered a disqualifying second class of S corporation stock; (5) direct the Secretary of the Treasury to modify a certain regulation to permit an S corporation bank to treat certain bad debt deductions as built-in losses during the entire period during which the bank recognized built-in gains from changing its accounting method for recognizing bad debts from the reserve method to the charge-off method; (6) include all banks within the three-year deduction preference rule; (7) reduce from 100 percent to 90 percent the percentage of shares held by shareholders necessary for consent to election by a small business organization to be an S corporation; (8) revise exceptions to the criteria for the treatment of certain wholly owned subchapter S subsidiaries with reference to required information returns; and (9) permit S corporations to make charitable contributions of inventory and scientific property.