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HR 5754 114th Congress House

S Corporation Modernization Act of 2016

Official title: To amend the Internal Revenue Code of 1986 to provide for S corporation reform, and for other purposes.

Introduced: July 13, 2016 See on congress.gov
Taxation Capital gains taxCharitable contributionsCorporate finance and managementEmployee benefits and pensions
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Financial services and investmentsIncome tax deductionsIncome tax ratesSales and excise taxesSecuritiesSmall businessTax administration and collection, taxpayers
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This bill died when the 114th Congress ended
It never became law before the 114th Congress (2015–2016) adjourned, and bills don't carry over to the next Congress. It would have to be reintroduced. You can still save it for reference, but it won't receive updates.
 Everywhere this bill has been 2 steps
Introduced
In committee
Reported out
Passed House
Passed Senate
To President
Became law
Jul 13, 2016
Referred to the House Committee on Ways and Means.
Jul 13, 2016
Introduced in House
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 Latest action July 13, 2016

Referred to the House Committee on Ways and Means.

 Plain-English summary Congressional Research Service

S Corporation Modernization Act of 2016

This bill amends the Internal Revenue Code, with respect to the tax treatment of S corporations, to:

  • allow a nonresident alien to be a qualifying beneficiary of an electing small business trust (ESBT), which is a type of trust that is permitted to hold shares in an S corporation;
  • allow S corporations to increase passive investment income from 25% to 60% without incurring additional taxes;
  • eliminate a provision terminating the S corporation status of corporations with excessive passive income for three consecutive years;
  • allow any S corporation bank to have individual retirement account shareholders;
  • allow ESBTs to claim expanded tax deductions for charitable contributions; and
  • allow an adjustment to the basis of an S corporation's assets upon the death of a shareholder, in the form of a 15-year amortization deduction.
 Related & companion bills 1
  • S 3181 Identical bill S Corporation Modernization Act of 2016
 Bill text 1 version

Source documents hosted by congress.gov.

 Committees of jurisdiction 1
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APA
U.S. Congress. (2026). H.R. 5754: S Corporation Modernization Act of 2016. 114th Congress. Open America. https://openamerica.io/bill/114-HR-5754/
MLA
"H.R. 5754: S Corporation Modernization Act of 2016." 114th Congress, 2026, Open America, https://openamerica.io/bill/114-HR-5754/.
Bluebook (legal)
H.R. 5754, 114th Cong. (2026), https://openamerica.io/bill/114-HR-5754/.
Markdown link
[H.R. 5754: S Corporation Modernization Act of 2016](https://openamerica.io/bill/114-HR-5754/)
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