Page:United States Statutes at Large Volume 72 Part 1.djvu/1693

 72 S T A T. ]

PUBLIC LAW 8 5 - 8 6 6 - S E P T. 2, 1958

" (c) WHERE AND How MADE.—

"(1) IN GENERAL.—An election under subsection (a) may be made by a small business corporation for any taxable year at any time during the first month of such taxable year, or at any time during the month preceding such first month. Such election shall be made in such manner as the Secretary or his delegate shall prescribe by regulations. "(2)

T A X A B L E YEARS BEGINNING BEFORE DATE OF ENACTMENT.

An election may be made under subsection (a) by a small business corporation for its first taxable year which begins after December 31, 1957, and on or before the date of the enactment of this subchapter, and ends after such date at any time— " (A) within the 90-day period beginning on the day after the date of the enactment of this subchapter, or " (B) if its taxable year ends within such 90-day period, before the close of such taxable year. An election may be made pursuant to this paragraph only if the small business corporation has been a small business corporation (as defined in section 1371(a)) on each day after the date of the enactment of this subchapter and before the day of such election. "(d)

YEARS FOR W H I C H EFFECTIVE.—An election under subsection

(a) shall be effective for the taxable year of the corporation for which it is made, and for all succeeding taxable years of the corporation, unless it is terminated, with respect to any such taxable year, under subsection (e). " (e) TERMINATION.—

"(1) NEW SHAREHOLDERS.—An election under subsection (a) made by a small business corporation shall terminate if any person who was not a shareholder in such corporation— " (A) on the first day of the first taxable year of the corporation for which the election is effective, if such election is made on or before such first day, or " (B) on the day on which the election is made, if such election is made after such first day, becomes a shareholder in such corporation and does not consent to such election within such time as the Secretary or his delegate shall prescribe by regulations. Such termination shall be effective for the taxable year of the corporation in which such person becomes a shareholder in the corporation and for all succeeding taxable years of the corporation. "(2) REVOCATION.—An election under subsection (a) made by a small business corporation may be revoked by it for any taxable year of the corporation after the first taxable year for which the election is effective. An election may be revoked only if all persons who are shareholders in the corporation on the day on which the revocation is made consent to the revocation. A revocation under this paragraph shall be effective— " (A) for the taxable year in which made, if made before the close of the first month of such taxable year, " (B) for the taxable year following the taxable year in which made, if made after the close of such first month, and for all succeeding taxable years of the corporation. Such revocation shall be made in such manner as the Secretary or his delegate shall prescribe by regulations. " (3) CEASES TO BE SMALL BUSINESS CORPORATION.—An election

under subsection (a) made by a small business corporation shall terminate if at any time—

1651

�