Page:United States Statutes at Large Volume 96 Part 2.djvu/314

 96 STAT. 1676

PUBLIC LAW 97-354—OCT. 19, 1982 days in such short year is of the number of days in the S termination year. "(B) SECTION 443(d)(2) TO APPLY.—Subsection (d)(2) of section 443 shall apply to the short taxable year described in subparagraph (B) of paragraph (1). "(6) OTHER SPECIAL RULES.—For purposes of this title— "(A)

SHORT YEARS TREATED AS i YEAR FOR CARRYOVER

PURPOSES.—The short taxable year described in subparagraph (A) of paragraph (1) shall not be taken into account for purposes of determining the number of taxable years to which any item may be carried back or carried forward by the corporation. "(B) DUE DATE FOR S YEAR.—The due date for filing the return for the short taxable year described in subparagraph (A) of paragraph (1) shall be the same as the due date for filing the return for the short taxable year described in subparagraph (B) of paragraph (1) (including extensions thereof). "(f) INADVERTENT TERMINATIONS.—If—

"(1) an election under subsection (a) by any corporation was terminated under paragraph (2) or (3) of subsection (d), "(2) the Secretary determines that the termination was inadvertent, "(3) no later than a reasonable period of time after discovery of the event resulting in such termination, steps were taken so that the corporation is once more a small business corporation, and "(4) the corporation, and each person who was a shareholder of the corporation at any time during the period specified pursuant to this subsection, agrees to make such adjustments (consistent with the treatment of the corporation as an S corporation) as may be required by the Secretary with respect to such period, then, notwithstanding the terminating event, such corporation shall be treated as continuing to be an S corporation during the period specified by the Secretary. "(g) ELECTION AFTER TERMINATION.—If a small business corporation has made an election under subsection (a) and if such election has been terminated under subsection (d), such corporation (and any successor corporation) shall not be eligible to make an election under subsection (a) for any taxable year before its 5th taxable year which begins after the 1st taxable year for which such termination is effective, unless the Secretary consents to such election. 26 USC 1363.

Ante, p. 1677.

"SEC. 1363. EFFECT OF ELECTION ON CORPORATION. "(a) GENERAL RULE.—Except as otherwise provided in this sub-

chapter and in section 58(d), an S corporation shall not be subject to the taxes imposed by this chapter. "(b) COMPUTATION OF CORPORATION'S TAXABLE INCOME.—The taxable income of an S corporation shall be computed in the same manner as in the case of an individual, except that— "(1) the items described in section 1366(a)(l)(A) shall be separately stated, "(2) the deductions referred to in section 703(a)(2) shall not be allowed to the corporation, and "(3) section 248 shall apply. "(c) ELECTIONS OF THE S CORPORATION.—

�