Subchapter S Revision Act of 1999

Subchapter S Revision Act of 1999 - Title I: Eligible Shareholders of an S Corporation - Amends the Internal Revenue Code to allow certain members of a family to be treated as one shareholder of an S corporation (electing small business corporation). Permits nonresident aliens to be S corporation shareholders if the corporation is engaged in a U.S. trade or business. Subjects such aliens' effectively-connected U.S. income to withholding tax.

Title II: Qualification and Eligibility Requirements of S Corporations - Prohibits, with respect to S corporations, treating: (1) qualified preferred stock as a second class of stock; and (2) a person as a shareholder by reason of holding such stock.

(Sec. 202) Permits financial institutions to hold convertible (safe harbor) debt.

(Sec. 203) Repeals: (1) the characterization of excessive passive investment income as a termination event; and (2) the passive income capital gain category.

(Sec. 205) Permits: (1) an S corporation to make charitable contributions of inventory and scientific property; and (2) S corporation shareholders to increase the basis of their stock by the excess of the charitable contribution over the property's basis.

(Sec. 206) Makes other-than health insurance fringe benefits nontaxable for S corporation two-percent shareholders.

Title III: Taxation of S Corporation Shareholders - States that a loss recognized by a shareholder in a complete liquidation of an S corporation shall be treated as an ordinary loss to the extent the shareholder's stock basis is attributable to ordinary income from such liquidation.

Title IV: Effective Date - Sets forth the effective date for provisions of this Act.