S 2017
S Corporation Modernization Act of 2025
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Bill overview
The S Corporation Modernization Act of 2025 aims to reform the rules surrounding S corporations, primarily focusing on how built-in gain is treated upon a shareholder’s death and expanding shareholder eligibility. Specifically, it allows deductions for amortizable built-in gain upon a shareholder’s death and provides for accelerated deductions upon the disposition of such property. The bill also modifies passive investment income rules and allows nonresident alien shareholders to participate in S corporations, with a new withholding tax provision. Finally, it expands the definition of a shareholder to include employees of a firm and IRAs.
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