S Corporation Modernization Act of 2024

The S Corporation Modernization Act of 2024 modernizes key rules for S corporations. It increases the passive investment income limit from 25% to 60%, allowing more flexibility for S corporations that might otherwise lose their status. The bill also permits nonresident aliens to be S corporation shareholders with new tax treatment rules, allows IRAs to own S corporation stock, and creates a deduction for shareholders inheriting S corporation stock that can be amortized over 15 years. These changes aim to make S corporation rules more adaptable to current business practices and ownership structures.