; table of contents. Sec. 2. Expansion of qualifying beneficiaries of an electing small business trust. Sec. 3. Modifications to S corporation passive investment income rules. Sec. 4. Expansion of S corporation eligible shareholders to include IRAs. Sec. 5. Charitable contribution deduction for electing small business trusts. Sec. 6. Amortization of S corporation built-in gain amount upon death of shareholder. Sec. 7. Extension of time for making S corporation elections. 2. Expansion of qualifying beneficiaries of an electing small business trust (a) No look-Through for eligibility purposes Section 1361(c)(2)(B)(v) is amended by adding at the end the following new sentence: This clause shall not apply for purposes of subsection (b)(1)(C). . (b) Effective date The amendment made by this section shall take effect on January 1, 2018. 3. Modifications to S corporation passive investment income rules (a) Increased percentage limit Section 1375(a)(2) is amended by striking 25 percent and inserting 60 percent . (b) Repeal of excessive passive income as a termination event Section 1362(d) is amended by striking paragraph (3). (c) Conforming amendments (1) Section 1375(b) is amended by striking paragraphs (3) and (4) and inserting the following new paragraph: (3) Passive investment income defined (A) In general Except as otherwise provided in this paragraph, the term passive investment income means gross receipts derived from royalties, rents, dividends, interest, and annuities. (B) Exception for interest on notes from sales of inventory The term passive investment income shall not include interest on any obligation acquired in the ordinary course of the corporation’s trade or business from its sale of property described in section 1221(a)(1). (C) Treatment of certain lending or finance companies If the S corporation meets the requirements of section 542(c)(6) for the taxable year, the term passive investment income shall not include gross receipts for the taxable year which are derived directly from the active and