PUBLIC LAW 95-628—NOV. 10, 1978
92 STAT. 3628
" (3) any gain recognized to the corporation on the distribution." 26 use301 note. (d) EFFECTIVE D A T E. — The amendments made by this section shall apply to distributions made after the date of the enactment of this Act. SEC. 4. 60-DAY EXTENSION OF 12-MONTH PERIOD UNDER SECTION 337 WHERE THERE IS INVOLUNTARY CONVERSION. 26 USC 337. (a) AMENDMENT OF SECTION 337.—Section 337 (relating to gain or loss on sales or exchanges in connection with certain liquidations) is amended by a d d i n g at the end thereof the following new subsection: "(e)
SPECIAL RULE FOR INVOLUNTARY CONVERSIONS.—If—
" (1) there is an involuntary conversion (within the meaning 26 USC 1033. of section 1033) of property of a distributing corporation and there is a complete liquidation of such corporation which qualifies under subsection (a), " (2) the disposition of the converted property (within the meaning of clause (ii) of section 1033(a)(2)(E)) occurs during the 60-day period which ends on the day before the first day of the 12-month period, and " (3) such corporation elects the application of this subsection a t such time and in such manner as the Secretary may by regulations prescribe, then for purposes of this section such disposition shall be treated as a sale or exchange occurring within the 12-month period." 26 use337 note. (b) EFFECTIVE D A T E. — The amendment made by subsection (a) shall apply with respect to dispositions of the converted property (within the meaning of clause (ii) of section 1033(a)(2)(E) of the I n t e r n a l Revenue Code of 1954) occurring after the date of the enactment of this Act in taxable years ending after such date. SEC. 5. EXTENSION OF PERIOD FOR MAKING SUBCHAPTER S ELECTIONS. 26 USC 1372.
(a)
AMENDMENT OF SECTION 1 3 7 2 (C). — S u b s e c t i o n (c)
of section
1372 (relating to where and how subchapter S election may be made) is amended to read as follows: "(c)
W H E N AND H o w
MADE.—
" (1) IN GENERAL.—An election under subsection (a) may be made by a small business corporation for any taxable year— " (A) at any time during the preceding taxable year, or " (B) at any time during the first 75 days of the taxable year. "(2)
TREATMENT o r CERTAIN LATE ELECTIONS.—If—
" (A) a small business corporation makes an election under subsection (a) for any taxable year, and " (B) such election is made after the first 75 days of the taxable year and on or before the last day of such taxable year, then such election shall be treated as having been made for the following taxable year. " (3) M A N N E R o r MAKING ELECTION.—An election under sub-
section (a) shall be made in such manner as the Secretary shall prescribe by regulations.", (b)
TECHNICAL AMENDMENTS.—
(1) Section 1372(e)(1)(A) (relating to termination in the case of new shareholders) is amended to read as follows: " (A) an election under subsection (a) made by a small business corporation shall terminate if any person who is not a shareholder in siich corporation on the day on which the election was made becomes a shareholder in such corporation and affirmatively refuses (in such manner as the Secretary
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