Bill > HR4453

This bill, the S Corporation Permanent Tax Relief Act of 2014, makes two key tax provisions permanent for S corporations, which are businesses that pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes. First, it permanently reduces the "recognition period" from ten years to five years, meaning that any built-in gains (profits from assets that were worth more when the company became an S corporation than when it was acquired) are taxed at the corporate level for a shorter duration. Second, it permanently allows for an adjustment to the basis, or the shareholder's investment value, in their S corporation stock when the corporation makes tax-deductible contributions of appreciated property, meaning the shareholder's investment value is increased to reflect the value of the donated property. Importantly, the bill also states that the budgetary impact of these changes will not be counted on any "PAYGO" (Pay As You Go) scorecards, which are used to track government spending and ensure that new legislation does not increase the deficit.