[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2439 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 2439

 To amend the Internal Revenue Code of 1986 to allow for an unlimited 
 number of shareholders in an S corporation if all of the shareholders 
                    are members of the same family.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 16, 1993

   Mr. Shaw introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to allow for an unlimited 
 number of shareholders in an S corporation if all of the shareholders 
                    are members of the same family.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,
    (a) In General.--Subsection (b) of section 1361 (relating to small 
business corporations) is amended by adding at the end thereof the 
following new paragraph:
            ``(3) Exception for family-held corporation.--
                    ``(A) In general.--Subparagraph (A) of paragraph 
                (1) shall not apply to a corporation all of the 
                shareholders of which are members of the same family.
                    ``(B) Members of the same family.--For purposes of 
                this paragraph, the term ``members of the same family'' 
                means the lineal descendants of a common ancestor and 
                the spouses (or former spouses) of such lineal 
                descendants or common ancestor.
                    ``(C) Common ancestor.--For purposes of this 
                paragraph, an individual shall not be considered a 
                common ancestor if, as of the later of the effective 
                date of this paragraph or the time the election under 
                section 1362(a) is made, the individual is more than 
                four generations removed from the youngest generation 
                of shareholders.
                    ``(D) Effect of adoption.--Individuals related by 
                legal adoption or by half-blood shall be treated as 
                related by whole blood.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply with respect to taxable years beginning on or after the date of 
enactment of this Act.

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