[Congressional Record Volume 163, Number 196 (Friday, December 1, 2017)]
[Senate]
[Page S7727]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

  SA 1832. Mr. JOHNSON submitted an amendment intended to be proposed 
to amendment SA 1618 proposed by Mr. McConnell (for Mr. Hatch (for 
himself and Ms. Murkowski)) to the bill H.R. 1, to provide for 
reconciliation pursuant to titles II and V of the concurrent resolution 
on the budget for fiscal year 2018; which was ordered to lie on the 
table; as follows:

       At the appropriate place, insert the following:

     SEC. __. MODIFICATION OF TREATMENT OF S CORPORATION 
                   CONVERSIONS TO C CORPORATIONS.

       (a) Adjustments Attributable to Conversion From S 
     Corporation to C Corporation.--Section 481 is amended by 
     adding at the end the following new subsection:
       ``(d) Adjustments Attributable to Conversion From S 
     Corporation to C Corporation.--
       ``(1) In general.--In the case of an eligible terminated S 
     corporation, any adjustment required by subsection (a)(2) 
     which is attributable to such corporation's revocation 
     described in paragraph (2)(A)(ii) shall be taken into account 
     ratably during the 10-taxable year period beginning with the 
     year of the change.
       ``(2) Eligible terminated s corporation.--For purposes of 
     this subsection, the term `eligible terminated S corporation' 
     means any C corporation--
       ``(A) which--
       ``(i) was an S corporation on the day before the date of 
     the enactment of the Tax Cuts and Jobs Ac; and
       ``(ii) during the 3-year period beginning on the date of 
     such enactment makes a revocation of its election under 
     section 1362(a); and
       ``(B) the owners of the stock of which, determined on the 
     date such revocation is made, are the same owners (and in 
     identical proportions) as on the date of such enactment.''.
       (b) Cash Distributions Following Post-termination 
     Transition Period From S Corporation Status.--Section 1371 is 
     amended by adding at the end the following new subsection:
       ``(f) Cash Distributions Following Post-termination 
     Transition Period.--In the case of a distribution of money by 
     an eligible terminated S corporation (as defined in section 
     481(d)) after the post-termination transition period, the 
     accumulated adjustments account shall be allocated to such 
     distribution, and the distribution shall be chargeable to 
     accumulated earnings and profits, in the same ratio as the 
     amount of such accumulated adjustments account bears to the 
     amount of such accumulated earnings and profits.''.
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