Amended 1984, 1986
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 806(b)(3), struck out subsec. (c) which required existing S corporations to use permitted year after 50-percent shift in ownership.
- 1984 Pub. L. 98-369 Pub. L. 98–369, § 721(m), substituted “which includes December 31, 1982 (or which is an S corporation for a taxable year beginning during 1983 by reason of an election made on or before October 19, 1982)” for “which includes December 31, 1982”.
- 1984 Pub. L. 98-369 Pub. L. 98–369, § 721(q), substituted “who (or whose estate) held” for “who held”.
Cases: Farmers Gin v. Commissioner, T.C. Memo. 1995-25
Forms: Form 2553
Final rules 1
(a) General rule For purposes of this subtitle, the taxable year of an S corporation shall be a permitted year.
Amended 1986
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 806(b)(1), amended subsec. (a) generally. Prior to amendment, subsec. (a) read as follows: “For purposes of this subtitle—
“(1) an S corporation shall not change its taxable year to any accounting period other than a permitted year, and
“(2) no corporation may make an election under section 1362(a) for any taxable year unless such taxable year is a permitted year.”
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(b) Permitted year defined For purposes of this section, the term “permitted year” means a taxable year which—
Amended 1986
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 806(b)(2), inserted at end “For purposes of paragraph (2), any deferral of income to shareholders shall not be treated as a business purpose.”
(1) is a year ending December 31, or
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(2) is any other accounting period for which the corporation establishes a business purpose to the satisfaction of the Secretary.
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For purposes of paragraph (2), any deferral of income to shareholders shall not be treated as a business purpose.