Page 105 - Tax Reform

PUBLIC LAW 115–97—DEC. 22, 2017 131 STAT. 2155

SEC. 13543. MODIFICATION OF TREATMENT OF S CORPORATION
CONVERSIONS TO C CORPORATIONS.
(a) ADJUSTMENTS ATTRIBUTABLE TO CONVERSION FROM S COR-
PORATION TO C CORPORATION.—Section 481 is amended by adding 26 USC 481.
at the end the following new subsection:
‘‘(d) ADJUSTMENTS ATTRIBUTABLE TO CONVERSION FROM S COR-
PORATION 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 6-taxable year period beginning with the year of
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 Act,
and
‘‘(ii) during the 2-year period beginning on the
date of such enactment makes a revocation of its elec-
tion 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 enact-
ment.’’.
(b) CASH DISTRIBUTIONS FOLLOWING POST-TERMINATION TRANSI-
TION 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 adjust-
ments 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.’’.
PART VII—EMPLOYMENT

Subpart A—Compensation
SEC. 13601. MODIFICATION OF LIMITATION ON EXCESSIVE EMPLOYEE
REMUNERATION.
(a) REPEAL OF PERFORMANCE-BASED COMPENSATION AND
COMMISSION EXCEPTIONS FOR LIMITATION ON EXCESSIVE EMPLOYEE
REMUNERATION.—
(1) IN GENERAL.—Paragraph (4) of section 162(m) is
amended by striking subparagraphs (B) and (C) and by redesig-
nating subparagraphs (D), (E), (F), and (G) as subparagraphs
(B), (C), (D), and (E), respectively.
(2) CONFORMING AMENDMENTS.—
(A) Paragraphs (5)(E) and (6)(D) of section 162(m) are
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each amended by striking ‘‘subparagraphs (B), (C), and
(D)’’ and inserting ‘‘subparagraph (B)’’.