What is H.R. 4453?
(Updated January 31, 2017)
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.
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.
Impact
The bill affects the roughly 4.5 million S corporations operating in the United States.
Cost of H.R. 4453
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.
Additional Info
The Latest
-
IT: Israel escalates military operations in northern Gaza, and... How can you help your neighbors today?Welcome to Thursday, May 16th, mates... Israel is planning to escalate its military operations in northern Gaza, where 100,000 read more...
-
The Latest: Israel Attacks North and South Gaza, Nowhere Left for CiviliansUpdated May 15, 2024, 1:00 p.m. Israel is planning to escalate its military operations in northern Gaza, where 100,000 read more... Israel
-
Michael Cohen Takes the Stand in Trump Hush Money TrialUpdated May 15, 2024, 11:30 a.m. EST Michael Cohen, once Trump's personal lawyer, faced cross-examination in the former read more... Law Enforcement
-
IT: 💊 Research uncovers the impact of shield laws in abortion pill access, and... Are you ready to vote?Welcome to Tuesday, May 14th, subscribers... New research finds that "shield laws" have allowed abortion pill access to remain read more...