[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3874 Introduced in House (IH)]







110th CONGRESS
  1st Session
                                H. R. 3874

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


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                    IN THE HOUSE OF REPRESENTATIVES

                            October 17, 2007

   Mr. Kagen (for himself, Mr. Ramstad, Mr. Kind, and Mr. English of 
Pennsylvania) introduced the following bill; which was referred to the 
                      Committee on Ways and Means

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                                 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. SHORT TITLE.

    This Act may be cited as the ``Small Business Growth and 
Opportunity Act''.

SEC. 2. REDUCED RECOGNITION PERIOD FOR BUILT-IN GAINS TAX.

    (a) In General.--Paragraph (7) of section 1374(d) of the Internal 
Revenue Code of 1986 (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 includable 
        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 of such distribution.''.
    (b) Effective Date.--The amendment made by this section--
            (1) shall apply for purposes of determining the recognition 
        period with respect to 1st days referred to in section 
        1374(d)(7) of such Code occurring before, on, or after the date 
        of the enactment of this Act, but
            (2) shall not apply for purposes of determining the tax 
        imposed by section 1374 of such Code for taxable years ending 
        before such date.
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