H.R. 9840, S Corporation Tax Relief Package. Quorum's AI analysis reads it as a net cost — and names who bears it.
H.R. 9840 · Net cost
What it does
This bill modernizes S corporation tax rules by allowing stepped-up basis deductions for heirs when S corporation shareholders die, raising the passive income threshold from 25% to 60%, permitting nonresident aliens and IRAs to own S corporation stock, allowing employees to count as a single shareholder, and repealing Section 409A (nonqualified deferred compensation taxation). It also increases the shareholder limit from 100 to 250 and creates a withholding tax on nonresident alien shareholders' effectively connected income.
The analysis names S corporation owners and shareholders — and 5 more groups — among the beneficiaries.
The cost
The stepped-up basis deduction (Section 2) allows heirs to inherit S corporation stock with a basis reset to fair market value at death, eliminating capital gains tax on appreciation during the decedent's lifetime—a permanent wealth transfer benefit for high-net-worth families.
Transparency scores 35%. The analysis flags 1 rider and a high warning level.
Who is behind it
Filed by Mike Carey.
The week in bills
One email, Sunday: what Congress passed, what it changed, and who paid.
One link arrives to confirm the address. It is used for this email and nothing else, and every issue carries an unsubscribe link.