A new measure (H.R. 8619) would modify some of the rules for S corporations. It would allow nonresident aliens to be shareholders (something that’s not possible now), while imposing a withholding tax on their share of the S corporation’s income. It would modify the passive income rule, increasing the threshold for the corporation’s tax on passive income from the current 25% to 60%. And it would change the rules for the treatment of built-in capital gains tax when a shareholder dies. And, perhaps the most interesting proposal, would allow IRAs to be shareholders. These and other provisions would take effect after 2023 if enacted. #IdeaoftheDay
Barbara Weltman
Big Ideas for Small Business, Inc.
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