Page:United States Statutes at Large Volume 92 Part 3.djvu/997

 PUBLIC LAW 95-628—NOV. 10, 1978

92 STAT. 3629

may by regulations prescribe) to consent to such election on or before the 60th day after the day on which he acquired the stock.". (2) The last sentence of section 1372(a) (relating to eligibility 26 USC 1372. for election by a small business corporation) 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.". (3) Subparagraph (C) of section 1372(e)(1) is amended by inserting " (or, if later, the first taxable year for which such election would have taken effect)" after "in the corporation". (c) EFFECTIVE DATE.—The amendments made by subsections (a) 26 USC 1372 and (b) shall apply to elections made more than 60 days after the date ^^ot^of the enactment of this Act for taxable years beginning more than 60 days after such date of enactment. (d) KETROACTIVE APPLICATION OF "PRECEDING TAXABLE YEAR" 26 USC 1372 note. AMENDMENT.— (1) IN GENERAL. I f

(A) a small business corporation has treated itself in its return as an electing small business corporation under subchapter S of chapter 1 of the Internal Revenue Code of 1954 for any taxable year beginning before the date 60 days after the date of the enactment of this Act (hereinafter in this subsection referred to as the "election year"), (B) such treatment was pursuant to an election which such corporation made during the taxable year immediately preceding the election year and which, but for this subsection, would not be effective, and (C) at such time and in such manner as the Secretary of the Treasury or his delegate may prescribe by regulations— (i) such corporation makes an election under this paragraph, and (ii) all persons (or their personal representatives) who were shareholders of such corporation at any time beginning with the first day of the election year and ending on the date of the making of such election consent to such election, consent to the application of the amendment made by subsection (a), and consent to the application of paragraph (3) of this subsection, then paragraph (1) of the first sentence of section 1372(c) of such Code (as amended by subsection (a)) shall apply with respect to the taxable years referred to in paragraph (2) of this subsection. (2) YEARS TO WHICH AMENDMENT APPLIES.—In the case of an election under paragraph (1) by any corporation, the taxable years referred to in this paragraph are— (A) the election year, (B) all subsequent taxable years of such corporation, and (C) in the case of each person who was a shareholder of such corporation at any time during any taxable year described in subparagraph (A) or (B)— (i) the first taxable year of such person ending with or within a taxable year described in subparagraph (A) or (B),and (ii) all subsequent taxable years of such person. (3) STATUTE OP LIMITATIONS FOR ASSESSMENT OF DEFICIENCY.—

If the assessment of any deficiency in income tax resulting from

�