S Corporation Modernization Act of 2016
Last action on Jul 13, 2016Referred to the House Committee on Ways and Means.
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Summary
S Corporation Modernization Act of 2016
This bill amends the Internal Revenue Code, with respect to the tax treatment of S corporations, to:
- allow a nonresident alien to be a qualifying beneficiary of an electing small business trust (ESBT), which is a type of trust that is permitted to hold shares in an S corporation;
- allow S corporations to increase passive investment income from 25% to 60% without incurring additional taxes;
- eliminate a provision terminating the S corporation status of corporations with excessive passive income for three consecutive years;
- allow any S corporation bank to have individual retirement account shareholders;
- allow ESBTs to claim expanded tax deductions for charitable contributions; and
- allow an adjustment to the basis of an S corporation's assets upon the death of a shareholder, in the form of a 15-year amortization deduction.
