PUBLIC LAW 97-354—OCT. 19, 1982
96 STAT. 1671
includes the estate of an individual in a case under title 11 of the United States Code. "(4)
DIFFERENCES IN COMMON STOCK VOTING RIGHTS DISRE-
GARDED.—For purposes of subsection (b)(1)(D), a corporation shall not be treated as having more than 1 class of stock solely because there are differences in voting rights among the shares of common stock. "(5) STRAIGHT DEBT SAFE HARBOR.—
"(A) IN GENERAL.—For purposes of subsection (b)(1)(D), straight debt shall not be treated as a second class of stock. "(B) STRAIGHT DEBT DEFINED.—For purposes of this paragraph, the term 'straight debt' means any written unconditional promise to pay on demand or on a specified date a sum certain in money if— "(i) the interest rate (and interest payment dates) are not contingent on profits, the borrower's discretion, or similar factors, "(ii) there is no convertibility (directly or indirectly) into stock, and "(iii) the creditor is an individual (other than a nonresident alien), an estate, or a trust described in paragraph (2). "(C) REGULATIONS.—The Secretary shall prescribe such regulations as may be necessary or appropriate to provide for the proper treatment of straight debt under this subchapter and for the coordination of such treatment with other provisions of this title. "(6)
OWNERSHIP OF STOCK IN CERTAIN INACTIVE CORPORA-
TIONS.—For purposes of subsection (b)(2)(A), a corporation shall not be treated as a member of an affiliated group at any time during any taxable year by reason of the ownership of stock in another corporation if such other corporation— "(A) has not begun business at any time on or after the date of its incorporation and before the close of such taxable year, and "(B) does not have taxable income for the period included within such taxable year.
- (d) SPECIAL RULE FOR QUALIFIED SUBCHAPTER S TRUST.—
"(1) IN GENERAL.—In the case of a qualified subchapter S trust with respect to which a beneficiary makes an election under paragraph (2)— "(A) such trust shall be treated as a trust described in subsection (c)(2)(A)(i), and "(B) for purposes of section 678(a), the beneficiary of such trust shall be treated as the owner of that portion of the trust which consists of stock in an S corporation with respect to which the election under paragraph (2) is made. "(2) ELECTION.—
"(A) IN GENERAL.—A beneficiary of a qualified subchapter S trust (or his legal representative) may elect to have this subsection apply. "(B) MANNER AND TIME OF ELECTION.— "(i) SEPARATE ELECTION WITH RESPECT TO EACH S COR-
PORATION.—An election under this paragraph shall be made separately with respect to each S corporation the stock of which is held by the trust.
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