S Corporation Modernization Act of 2019

S Corporation Modernization Act of 2019

This bill modifies the tax treatment of  S corporations (pass thru entities) to

• increase from 25% to 60% of S corporation gross receipts the threshold for taxing S corporations with passive investment income;
• eliminate a provision terminating the status of  S corporations with excessive passive investment income for three consecutive years;
• permit S corporations to have individual retirement accounts as shareholders;
• allow an adjustment to the basis of an S corporation's assets upon the death of a shareholder, in the form of a 15-year amortization deduction; and
• permit the Internal Revenue Service to treat a late revocation of  S corporation status as timely if it finds there was reasonable cause for failure to make a timely revocation.