S Corporation Reform Act of 1993

referredUnited States· United States Congress· EN

Introduced

19 November 1993

Last action

19 November 1993 · Introduced

Status

Read twice and referred to the Committee on Finance.

Summary

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 Corporation 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: Once 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, 1993.

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Timeline

19 November 1993
Introduced
Read twice and referred to the Committee on Finance.
Source: IntroReferral
19 November 1993
Introduced
Sponsor introductory remarks on measure. (CR S16436-16437, S16441-16442)
Source: IntroReferral
19 November 1993
Introduced
Introduced in Senate
Source: IntroReferral

Votes

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Versions

Introduced in Senate · 19 November 1993 · Download file

Documents

3 official files

Introduced in Senate (text)

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Introduced in Senate (text)
Introduced in Senate · EN · 19 November 1993
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Introduced in Senate (PDF)
Introduced in Senate · EN · 19 November 1993
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Introduced in Senate
summary · EN · 19 November 1993
Open at official source
Leesvertaling
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Related records

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Sources

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Official source: https://www.congress.gov/bill/103rd-congress/senate-bill/1690
Open data entity: https://api.congress.gov/v3/bill/103/s/1690
us · 103-s-1690 · source updated 26 August 2025