EXTENSION OF REDUCTION IN S-CORPORATION RECOGNITION PERIOD FOR BUILT-IN GAINS TAX.

SEC. 326. EXTENSION OF REDUCTION IN S-CORPORATION RECOGNITION PERIOD FOR BUILT-IN GAINS TAX. (a) [26 U.S.C. 1374] In General.—Paragraph (7) of section 1374(d) is amended— (1) by redesignating subparagraph (C) as subparagraph (D), and (2) by inserting after subparagraph (B) the following new subparagraph: “(C) Special rule for 2012 and 2013. For purposes of determining the net recognized built-in gain for taxable years beginning in 2012 or 2013, subparagraphs (A) and (D) shall be applied by substituting ‘5-year’ for ‘10-year’.” , and (3) by adding at the end the following new subparagraph: “(E) Installment sales. If an S corporation sells an asset and reports the income from the sale using the installment method under section 453, the treatment of all payments received shall be governed by the provisions of this paragraph applicable to the taxable year in which such sale was made.” . (b) Technical Amendment.—Subparagraph (B) of section 1374(d)(2) is amended by inserting “described in subparagraph (A)” after “, for any taxable year”. (c) [26 U.S.C. 1374 note] Effective Date.—The amendments made by this section shall apply to taxable years beginning after December 31, 2011.