Page:United States Statutes at Large Volume 92 Part 3.djvu/212

 92 STAT. 2844 ^^

PUBLIC LAW 95-600—NOV. 6, 1978 made by a small business corporation for any taxable year— "(A) at any time during the preceding taxable year, or "(B) at any time during the first 75 days of the taxable year. "(2) TREATMENT OF CERTAIN LATE ELECTIONS.—If—

"(A) a small business corporation makes an election under subsection (a) for any taxable year, and "(B) such election is made after the first 75 days of the taxable year and on or before the last day of such taxable year, then such election shall be treated as made for the following taxable year. "(3) MANNER OF MAKING ELECTION.—An election under subsection (a) shall be made in such manner as the Secretary shall prescribe by regulations." (b) TECHNICAL AMENDMENTS.—

26 USC 1372.

(1) The second sentence of section 1372(a) is amended to read as follows: "Such election shall be valid only if all persons who are shareholders in such corporation on the day on which such election is made consent to such election." (2) Subparagraph (A) of section 1372(e)(1) is amended to read as follows: "(A) An election under subsection (a) made by a small business corporation shall terminate if any person who was not a shareholder in such corporation on the day on which the election is made becomes a shareholder in such corporation and affirmatively refuses (in such manner as the Secretary may by regulations prescribe) to consent to such election on or before the 60th day after the day on which he acquires the stock." (3) Subparagraph (C) of section 1372(e)(1) is amended by inserting "(or, if later, the first taxable year for which such election would otherwise have been effective)" after "in the corporation". SEC. 344. EFFECTIVE DATE. The amendments made by this part shall apply to taxable years beginning after December 31, 1978.

26 USC 1371 note.

PART II—OTHER PROVISIONS SEC. 345. SMALL BUSINESS CORPORATION STOCK.

(a) INCREASE TO $1,000,000 AMOUNT OF STOCK POTENTIALLY SUBJECT TO ORDINARY LOSS TREATMENT; REMOVAL OF EQUITY CAPITAL TEST.—

26 USC 1244.

Subsection (c) of section 1244 (relating to losses on small business stock) is amended by striking out paragraph (2) and inserting in lieu thereof the following: "(3) SMALL BUSINESS CORPORATION DEFINED.—

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"(A) IN GENERAL.—For purposes of this section, a corporation shall be treated as a small business corporation if the aggregate amount of money and other property received by the corporation for stock, as a contribution to capital, and as paid-in surplus, does not exceed $1,000,000. The determination under the preceding sentence shall be made as of the time of the issuance of the stock in question but shall include amounts received for such stock and for all stock theretofore issued. "(B) AMOUNT TAKEN INTO ACCOUNT WITH RESPECT TO PROP-

ERTY.—For purposes of subparagraph (A), the amount taken into account with respect to any property other than money

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