Page:United States Statutes at Large Volume 92 Part 3.djvu/211

 PUBLIC LAW 95-600—NOV. 6, 1978

92 STAT. 2843

to such charitable organizations within 90 days after the date on which the payment is received by the State or local government in the same manner as if the refund profit had not been paid to the United States and met the requirements of subsection (a), (c) DEFINITIONS.—For purposes of this section— (1) REFUND PROFIT.—The term "refund profit" means interest, profit, or other amounts generated by, or arising out of, the advance refunding, before September 24, 1976, of an obligation of a State or local government described in section 103 of such Code. 26 USC 103. (2) CHARITABLE ORGANIZATION.—The term "charitable organization" means an organization described in section 501(c)(3) of 26 USC 501. such Code and exempt from taxation under section 501(a) of such Code other than an organization described in section 509(a) of 26 USC 509. such Code. (3) QUALIFIED AGREEMENT.—The term "qualified agreement" means an agreement (whether or not enforceable) which provides for, or contemplates, the payment of refund profit to one or more charitable organizations. (4) LOW-INTEREST UNITED STATES OBLIGATIONS.—The term "lowinterest United States obligations" means United States obliga; tions which bear an interest rate lower than the highest rate of interest borne by public debt securities generally available for purchase at the time such obligations were purchased.

Subtitle E—Small Business Provisions PART I—PROVISIONS RELATING TO SUBCHAPTER S SEC. 341. SUBCHAPTER S CORPORATIONS ALLOWED 15 SHAREHOLDERS.

(a) GENERAL RULE.—Paragraph (1) of section 1371(a) (defining small business corporation) is amended to read as follows: "(1) have more than 15 shareholders;".

26 USC 1371.

(b) TECHNICAL AMENDMENTS.—

(1) Section 1371 is amended by striking out subsection (e) and by redesignating subsection (f) as subsection (e). (2) Paragraph (2) of section 1371(a) is amended by striking out "subsection (f)" and inserting in lieu thereof "subsection (e)". SEC. 342. PERMITTED SHAREHOLDERS OF SUBCHAPTER S CORPORATIONS. (a) HUSBAND AND WIFE TREATED AS O N R INDIVIDUAL.—Subsection

(c) of section 1371 (relating to stock owned by husband and wife) is amended to read as follows: "(c) STOCK OWNED BY HUSBAND AND WIFE.—For purposes of subsec-

tion (a)(1), a husband and wife (and their estates) shall be treated as one shareholder." (b) GRANTOR OF GRANTOR TRUST TREATED AS THE SHAREHOLDER.—

Subsection (e) of section 1371 (as redesignated by section 331(b)(1) of this Act) is amended by inserting after the first sentence the following new sentence: "In the case of a trust described in paragraph (1), the grantor shall be treated as the shareholder." SEC. 343. EXTENSION OF PERIOD FOR MAKING SUBCHAPTER S ELECTIONS. (a) GENERAL RULE.—Subsection (c) of section 1372 (relating to when 26 USC 1372. and how subchapter S election may be made) is amended to read as follows: "(c) WHEN AND HOW MADE.—

"(1) IN GENERAL.—An election under subsection (a) may be

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