96 STAT. 1686
PUBLIC LAW 97-354—OCT. 19, 1982 "(2) is any other accounting period for which the corporation establishes a business purpose to the satisfaction of the Secretary.
"(c) EXISTING S CORPORATIONS REQUIRED To U S E PERMITTED YEAR AFTER 50-PERCENT SHIFT IN OWNERSHIP.—
"(1) IN GENERAL.—A corporation which is an S corporation for a taxable year which includes December 31, 1982, shall not be treated as an S corporation for any subsequent taxable year beginning after the first day on which more than 50 percent of the stock is newly owned stock unless such subsequent taxable year is a permitted year. "(2) NEWLY OWNED STOCK.—For purposes of paragraph (1), the
stock held by any person on any day shall be treated as newly owned stock to the extent that— "(A) the percentage of the stock of such corporation owned by such person on such day, exceeds "(B) the percentage of the stock of such corporation owned by such person on December 31, 1982. "(3) STOCK ACQUIRED BY REASON OF DEATH, GIFT FROM FAMILY MEMBER, ETC.—
"(A) IN GENERAL.—For purposes of paragraph (2), if— "(i) a person acquired stock in the corporation after December 31, 1982, and "(ii) such stock was acquired by such person— "(I) by reason of the death of a qualified transferor, "(II) by reason of a gift from a qualified transferor who is a member of such person's family, or "(III) by reason of a qualified buy-sell agreement from a qualified transferor (or his estate) who was a member of such person's family, then such stock shall be treated as held on December 31, 1982, by the person described in clause (i). "(B) QUALIFIED TRANSFEROR.—For purposes of subparagraph (A), the term 'qualified transferor' means a person— "(i) who held the stock in the corporation (or predecessor stock) on December 31, 1982, or "(ii) who acquired the stock in an acquisition which meets the requirements of subparagraph (A). "(C) FAMILY.—For purposes of subparagraph (A), the term 'family' has the meaning given such term by section 267(c)(4). "(D) QUALIFIED BUY-SELL AGREEMENT.—For purpOSeS of
subparagraph (A), the term 'qualified buy-sell agreement' means any agreement which— "(i) has been continuously in existence since September 28, 1982, and "(ii) provides that on the death of any party to such agreement, the stock in the S corporation held by such party will be sold to surviving parties to such agreement who were parties to such agreement on September 28, 1982. 26 USC 1379.
"SEC. 1379. TRANSITIONAL RULES ON ENACTMENT.
Ante, p. 1669.
"(a) OLD ELECTIONS.—Any election made under section 1372(a) (as in effect before the enactment of the Subchapter S Revision Act of 1982) shall be treated as an election made under section 1362.
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