RELIEF FROM INADVERTENTLY INVALID QUALIFIED SUBCHAPTER S SUBSIDIARY ELECTIONS AND TERMINATIONS.

SEC. 238. RELIEF FROM INADVERTENTLY INVALID QUALIFIED SUBCHAPTER S SUBSIDIARY ELECTIONS AND TERMINATIONS.(a) In General.—Section 1362(f) (relating to inadvertent invalid elections or terminations) is amended—(1) by inserting “, section 1361(b)(3)(B)(ii),” after “subsection (a)” in paragraph (1),(2) by inserting “, section 1361(b)(3)(C),” after “subsection (d)” in paragraph (1)(B),(3) by amending paragraph (3)(A) to read as follows:“(A) so that the corporation for which the election was made or the termination occurred is a small business corporation or a qualified subchapter S subsidiary, as the case may be, or”,(4) by amending paragraph (4) to read as follows:“(4) the corporation for which the election was made or the termination occurred, and each person who was a shareholder in such corporation at any time during the period specified pursuant to this subsection, agrees to make such adjustments (consistent with the treatment of such corporation as an S corporation or a qualified subchapter S subsidiary, as the case may be) as may be required by the Secretary with respect to such period,”, and(5) by inserting “or a qualified subchapter S subsidiary, as the case may be” after “S corporation” in the matter following paragraph (4).(b) Effective Date.—The amendments made by this section shall apply to elections made and terminations made after December 31, 2004.118 STAT. 1437