PlainBillCongress, translated.Legislation. Context. Public interest.Read twice and referred to the Committee on Finance.
Congressional Research Service
Version 00 · Introduced in Senate · Jul 19, 2001
Subchapter S Modernization Act of 2001 - Amends the Internal Revenue Code to revise provisions concerning S corporations to, among other things: (1) allow certain members of a family to be treated as one shareholder of an S corporation; (2) prohibit treating qualified preferred stock as a second class of stock and treating a person as a shareholder by reason of holding such stock; (3) permit financial institutions to hold convertible (safe harbor) debt; (4) repeal the characterization of excessive passive investment income as a termination event; (5) permit certain losses on liquidation not exceeding ordinary income basis to be treated as ordinary losses; (6) permit the deductibility of interest expense incurred by an electing small business trust to acquire S corporation stock; (7) provide that shareholder basis is not increased by income derived from cancellation of S corporation's debt; (8) provide for the exclusion of investment securities income from the passive income test for bank S corporations; (9) provide relief from inadvertently invalid qualified subchapter S subsidiary elections and terminations on the same basis as is provided to invalid or terminated S corporation elections; and (10) provide for the elimination of all earnings and profits attributable to pre-1983 years.
People & committees
Sen. Hatch, Orrin G. [R-UT] · R–UT
Legislative record
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Read twice and referred to the Committee on Finance.
Sponsor introductory remarks on measure. (CR S7959-7962)
Introduced in Senate
Primary sources
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Source last updated: Aug 19, 2025. Consult Congress.gov for the current record.
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