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house Bill H.R. 4453

Tax Cuts for S-Corporations

Argument in favor

Would free up S corporations' access to capital, which in turn might help spur economic growth.

Argument opposed

Increases the federal deficit by a billion and a half over the next decade.

bill Progress


  • Not enacted
    The President has not signed this bill
  • The senate has not voted
  • The house Passed June 12th, 2014
    Roll Call Vote 263 Yea / 155 Nay
      house Committees
      Committee on Ways and Means
    IntroducedApril 10th, 2014

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What is House Bill H.R. 4453?

This bill would permanently cut in half (from 10 years to 5 years), the length of time that S corporations have to pay the built-in gains tax, commonly referred to as the "BIG tax." S corporations, according to the IRS, "are corporations that elect to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes." They generally don't pay corporate taxes and are limited to 100 shareholders. C corporations, on the other hand, are taxed separately from, and in addition to, their shareholders. When an S turns into a C, or acquires assets from a C, they have to pay the BIG tax. 

The same reductions would also be applied to regulated investment companies and real estate investment funds. 

Impact

The bill affects the roughly 4.5 million S corporations operating in the United States.

Cost of House Bill H.R. 4453

$1.50 Billion
The staff of the Joint Committee on Taxation (JCT) estimates that enacting H.R. 4453 would reduce revenues, thus increasing federal deficits, by $1.5 billion over the 2014-2024 period.

AKA

S Corporation Permanent Tax Relief Act of 2014

Official Title

To amend the Internal Revenue Code of 1986 to make permanent the reduced recognition period for built-in gains of S corporations.

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