Bill > S1855

This bill makes permanent a reduced recognition period for built-in gains for S corporations, which are businesses that pass their profits and losses through to their owners to avoid double taxation. Currently, under Section 1374 of the Internal Revenue Code of 1986, S corporations face a recognition period for these built-in gains, meaning they are taxed on profits from assets that were appreciated before they became an S corporation. This bill amends that section to permanently set this recognition period at five years, starting from the first taxable year the corporation was an S corporation, and it applies to taxable years beginning after December 31, 2013.