S. 2605 (is) To amend the Internal Revenue Code of 1986 to expand income averaging to include the trade or business of fishing and to provide a business credit against income for the purchase of fishing safety equipment. [Introduced in Senate] %%Filename:...

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108th CONGRESS
  2d Session
                                S. 2604

 To amend the Internal Revenue Code of 1986 to reduce the recognition 
        period for built-in gains for subchapter S corporations.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 24, 2004

 Mr. Smith (for himself and Mr. Breaux) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to reduce the recognition 
        period for built-in gains for subchapter S corporations.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. REDUCED RECOGNITION PERIOD FOR BUILT-IN GAINS.

    (a) In General.--Paragraph (7) of section 1374(d) (relating to 
definitions and special rules) is amended to read as follows:
            ``(7) Recognition period.--The term `recognition period' 
        means the 7-year period beginning with the 1st day of the 1st 
        taxable year for which the corporation was an S corporation. 
        For purposes of applying this section to any amount includible 
        in income by reason of distributions to shareholders pursuant 
        to section 593(e), the preceding sentence shall be applied 
        without regard to the duration of the recognition period in 
        effect on the date such distribution.''.
    (b) Effective Date.--
            (1) General rule.--The amendment made by this section shall 
        apply to any recognition period in effect on or after the date 
        of the enactment of this Act.
            (2) Special application to existing periods exceeding 7 
        years.-- Any recognition period in effect on the date of the 
        enactment of this Act, the length of which is greater than 7 
        years, shall end on such date.
                                 <all>

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