Page:United States Statutes at Large Volume 96 Part 2.djvu/311

 PUBLIC LAW 97-354—OCT. 19, 1982

96 STAT. 1673

"(2) CERTAIN ELECTIONS MADE DURING IST 2y2 MONTHS TREATED AS MADE FOR NEXT TAXABLE YEAR.—If—

"(A) an election under subsection (a) is made for any taxable year during such year and on or before the 15th day of the 3d month of such year, but "(B) either— "(i) on 1 or more days in such taxable year before the day on which the election was made the corporation did not meet the requirements of subsection (b) of section 1361, or

"(ii) 1 or more of the persons who held stock in the corporation during such taxable year and before the election was made did not consent to the election, then such election shall be treated as made for the following taxable year. "(3) ELECTION MADE AFTER IST 2y2 MONTHS TREATED AS MADE FOR FOLLOWING TAXABLE YEAR.—If—

"(A) a small business corporation makes an election under subsection (a) for any taxable year, and "(B) such election is made after the 15th day of the 3d month 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. "(c) YEARS FOR WHICH 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, until such election is terminated under subsection (d). "(d) TERMINATION.— "(1) BY REVOCATION.—

"(A) IN GENERAL.—An election under subsection (a) may be terminated by revocation. "(B) MORE THAN ONE-HALF OF SHARES MUST CONSENT TO

REVOCATION.—An election may be revoked only if shareholders holding more than one-half of the shares of stock of the corporation on the day on which the revocation is made consent to the revocation. "(C) WHEN EFFECTIVE.—Except as provided in subpara-

graph (D)— "(i) a revocation made during the taxable year and on or before the 15th day of the 3d month thereof shall be effective on the 1st day of such taxable year, and "(ii) a revocation made during the taxable year but after such 15th day shall be effective on the 1st day of the following taxable year. "(D) REVOCATION MAY SPECIFY PROSPECTIVE DATE.—If the

revocation specifies a date for revocation which is on or after the day on which the revocation is made, the revocation shall be effective on and after the date so specified. "(2) BY CORPORATION CEASING TO BE SMALL BUSINESS CORPORATION.—

"(A) IN GENERAL.—An election under subsection (a) shall be terminated whenever (at any time on or after the 1st day of the i s t taxable year for which the corporation is an S corporation) such corporation ceases to be a small business corporation.

Ante, p. 1669.

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