therefrom. (G) Coordination with section 1374 The amount of passive investment income shall be determined by not taking into account any recognized built-in gain or loss of the S corporation for any taxable year in the recognition period. Terms used in the preceding sentence shall have the same respective meanings as when used in section 1374. . (2) (A) Section 26(b)(2)(J) is amended by striking 25 percent and inserting 60 percent . (B) Section 1375(b)(1)(A)(i) is amended by striking 25 percent and inserting 60 percent . (C) The heading for section 1375 is amended by striking 25 percent and inserting 60 percent . (D) The item relating to section 1375 in the table of sections for part III of subchapter S of chapter 1 is amended by striking 25 percent and inserting 60 percent . (3) Section 1042(c)(4)(A)(i) is amended by striking section 1362(d)(3)(C) and inserting section 1375(b)(3) . (4) Section 1362(f)(1)(B) is amended by striking paragraph (2) or (3) of subsection (d) and inserting subsection (d)(2) . (d) Effective Date The amendments made by this section shall apply to taxable years beginning after December 31, 2017. 4. Expansion of S corporation eligible shareholders to include IRAs (a) In General Section 1361(c)(2)(A)(vi) is amended to read as follows: (vi) A trust which constitutes an individual retirement account under section 408(a), including one designated as a Roth IRA under section 408A. . (b) Sale of Stock in IRA Relating to S Corporation Election Exempt From Prohibited Transaction Rules Section 4975(d)(16) is amended— (1) by striking subparagraphs (A) and (B) and by redesignating subparagraphs (C), (D), (E), and (F) as subparagraphs (A), (B), (C) and (D), respectively, and (2) by striking such bank or company in subparagraph (A) (as so redesignated) and inserting the issuer of such stock . (c) Effective Date The amendments made by this section shall take effect on January 1, 2018. 5. Charitable contribution deduction for electing small business trusts (a) In general Section 641(c)(2) is amended by