dicate, group, pool, joint venture, or organiza-
tion. 
‘‘(B) ELECTION BY CERTAIN BANKS TO BE 
TAXED AS PARTNERSHIPS.— 
‘‘(i) IN
GENERAL.—An eligible cor-
poration may elect to be treated as a part-
nership for purposes of this title. 
‘‘(ii) TAX TREATMENT.—In the case 
of an eligible corporation making an elec-
tion under clause (i)— 
‘‘(I) no gain or loss shall be rec-
ognized to the corporation or the 
shareholders by reason of an election 
under clause (i), and 
‘‘(II) section 1374 shall apply to 
the entity after such election. 
‘‘(iii) ELIGIBLE
CORPORATION.—The 
term ‘eligible corporation’ means any of 
the following entities which would (but for 
this subparagraph) be treated as a C cor-
poration for purposes of this title: 
‘‘(I) Any bank (as defined in sec-
tion 581). 
‘‘(II) Any bank holding company 
(as defined in section 2(a) of the 
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Bank Holding Company Act of 1956 
(12 U.S.C. 1841(a))). 
‘‘(III) Any savings association 
(as defined in section 3(b) of the Fed-
eral Deposit Insurance Act (12 U.S.C. 
1813)). 
‘‘(IV) Any savings and loan hold-
ing company (as defined in section 
10(a)(1)(D) of the Home Owners 
Loan Act).’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 305. REPEAL OF INDIVIDUAL ALTERNATIVE MINIMUM 
TAX. 
(a) IN GENERAL.—Section 55(a) of the Internal Rev-
enue Code of 1986 (relating to alternative minimum tax 
imposed) is amended by adding at the end the following 
new flush sentence: 
‘‘Except in the case of a corporation, no tax shall be im-
posed by this section for any taxable year beginning after 
December 31, 2007, and the tentative minimum tax of any 
taxpayer other than a corporation for any such taxable 
year shall be zero for purposes of this title.’’. 
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(b) MODIFICATION
OF LIMITATION
ON USE
OF 
CREDIT FOR PRIOR YEAR MINIMUM TAX LIABILITY.— 
Subsection (c) of section 53 of the Internal Revenue Code 
of 1986 (relating to credit for prior year minimum tax 
liability) is amended to read as follows: 
‘‘(c) LIMITATION.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), the credit allowable under subsection (a) 
for any taxable year shall not exceed the excess (if 
any) of— 
‘‘(A) the regular tax liability of the tax-
payer for such taxable year reduced by the sum 
of the credits allowable under subparts A, B, D, 
E, and F of this part, over 
‘‘(B) the tentative minimum tax for the 
taxable year. 
‘‘(2) 
TAXABLE
YEARS
BEGINNING
AFTER 
2007.—In the case of any taxable year beginning 
after 2007, the credit allowable under subsection (a) 
to a taxpayer other than a corporation for any tax-
able year shall not exceed 90 percent of the regular 
tax liability of the taxpayer for such taxable year re-
duced by the sum of the credits allowable under sub-
parts A, B, D, E, and F of this part.’’. 
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(c) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
SEC. 306. YOUNG SAVERS ACCOUNTS. 
(a) IN GENERAL.—Section 408A of the Internal Rev-
enue Code of 1986 (relating to Roth IRAs) is amended 
by adding at the end the following new subsection: 
‘‘(g) SPECIAL RULES FOR ROTH IRAS FOR CHIL-
DREN.— 
‘‘(1) GENERAL RULE.—A Roth IRA maintained 
for the benefit of an individual who has not attained 
age 25 before the close of the taxable year shall be 
maintained under this section, as modified by this 
subsection. 
‘‘(2) CONTRIBUTION LIMITS.— 
‘‘(A) IN GENERAL.—For so long as a Roth 
IRA is subject to this subsection, contributions 
to such Roth IRA shall be subject to this para-
graph and not to subsection (c)(2), and sub-
section (c)(3) shall not apply. 
‘‘(B) LIMIT.—The aggregate amount of 
contributions for any taxable year to all child 
Roth IRAs maintained for the benefit of an in-
dividual under this subsection shall not exceed 
the maximum amount allowable as a deduction 
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under subsection (b)(1) of section 219 for such 
taxable year (computed without regard to sub-
sections (b)(1)(B), (d)(1), and (g) of such sec-
tion).’’. 
(b) ENFORCEMENT
OF CONTRIBUTION LIMITS.— 
Paragraphs (1)(B) and (2)(B) of section 4973(f) of such 
Code are each amended by striking ‘‘and (c)(3)’’ and in-
serting ‘‘, (c)(3), and (f)(2)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
SEC. 307. SECTION 179 EXPENSING FOR SMALL BUSINESS. 
Subsections (b)(1), (b)(2), (b)(5), (c)(2), and 
(d)(1)(A)(ii) of section 179(b) (relating to election to ex-
pense certain depreciable business assets) are each amend-
ed by striking ‘‘and before 2010’’. 
TITLE IV—TAX RELIEF FOR COM-
MUNITY BANKS AND HOLD-
ING COMPANIES 
SEC. 401. LIMITED TAX CREDIT. 
(a) C CORPORATIONS.—Section 11 of the Internal 
Revenue Code of 1986 (relating to tax imposed) is amend-
ed by adding at the end the following new subsection: 
‘‘(e) REDUCTION OF TAX ON COMMUNITY BANKS.— 
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‘‘(1) IN GENERAL.—In the case of a C corpora-
tion which is a community bank, the aggregate tax 
imposed by this section, section 55, and section 
1201 shall be 80 percent of the aggregate tax which 
would (but for this subsection) be imposed by such 
sections. 
‘‘(2) MAXIMUM REDUCTION.—The reduction in 
tax by reason of this subsection shall not exceed 
$250,000. Corporations treated as 1 corporation 
under section 1202(d)(3) shall be so treated under 
this subsection, and the limitation under the pre-
ceding sentence shall be allocated among such cor-
porations in such manner as the Secretary shall pre-
scribe. 
‘‘(3) INCREASED BENEFIT FOR BANKS OPER-
ATING IN DISTRESSED AREAS, ETC.— 
‘‘(A) IN GENERAL.—In the case of a bank 
operating in an area referred to in subpara-
graph (B)— 
‘‘(i) paragraph (1) shall be applied by 
substituting ‘50 percent’ for ‘80 percent’, 
and 
‘‘(ii) paragraph (2) shall be applied by 
substituting ‘$500,000’ for ‘$250,000’. 
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‘‘(B) AREAS DESCRIBED.—The areas re-
ferred to in this subparagraph are— 
‘‘(i) empowerment zones and enter-
prise communities designated under section 
1391, 
‘‘(ii) renewal communities designated 
under section 1400E, 
‘‘(iii) low-income communities (as de-
fined in section 45D(e)), and 
‘‘(iv) distressed communities (within 
the meaning of section 233 of the Bank 
Enterprise Act of 1991 (12 U.S.C. 
1834a(b)). 
‘‘(4) COMMUNITY BANK.—For purposes of this 
section, the term ‘community bank’ means any of 
the following entities the gross assets of which (de-
termined under the rules of section 1202(d)) are 
$5,000,000,000 or less: 
‘‘(A) Any bank (as defined in section 581). 
‘‘(B) Any bank holding company (as de-
fined in section 2(a) of the Bank Holding Com-
pany Act of 1956 (12 U.S.C. 1841(a))). 
‘‘(C) Any savings association (as defined in 
section 3(b) of the Federal Deposit Insurance 
Act (12 U.S.C. 1813)). 
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‘‘(D) Any savings and loan holding com-
pany (as defined in section 10(a)(1)(D) of the 
Home Owners Loan Act).’’. 
(b) S CORPORATIONS.—Subsection (a) of section 
1366 of such Code is amended by adding at the end the 
following new paragraph: 
‘‘(3) REDUCTION
OF
TAX
ON
COMMUNITY 
BANKS.— 
‘‘(A) IN GENERAL.—In the case of an S 
corporation which is a community bank (as de-
fined in section 11(e)(4)), the net amount re-
quired to be taken into account by shareholders 
(without regard to this paragraph) shall be re-
duced by the lesser of— 
‘‘(i) 20 percent of such net amount, or 
‘‘(ii) $1,250,000. 
‘‘(B) INCREASED BENEFIT FOR BANKS OP-
ERATING IN DISTRESSED AREAS, ETC.—In the 
case of a bank operating in an area referred to 
in section 11(e)(3)(B)— 
‘‘(i) subparagraph (A)(i) shall be ap-
plied by substituting ‘50 percent’ for ‘20 
percent’, and 
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‘‘(ii) subparagraph (A)(ii) shall be ap-
plied by substituting ‘$2,500,000’ for 
‘$1,250,000’.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 402. COMMUNITY BANK RELIEF FROM MINIMUM TAX. 
(a) IN GENERAL.—Section 55 of the Internal Rev-
enue Code of 1986 (relating to alternative minimum tax 
imposed) is amended by adding at the end the following 
new subsection: 
‘‘(f) EXEMPTION FOR COMMUNITY BANKS.— 
‘‘(1) IN GENERAL.—The tentative minimum tax 
of a community bank (as defined in section 11(e)(4)) 
shall be zero. 
‘‘(2) CERTAIN RULES TO APPLY.—Rules similar 
to the rules of paragraphs (2) through (5) of sub-
section (e) shall apply for purposes of this sub-
section.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
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TITLE V—SMALL BUSINESS 
SUBCHAPTER S REFORMS 
SEC. 501. INCREASING SHAREHOLDER LIMIT FOR SUB-
CHAPTER S TO 150. 
(a) IN GENERAL.—Section 1361(b)(1)(A) of the In-
ternal Revenue Code of 1986 (defining small business cor-
poration) is amended by striking ‘‘100’’ and inserting 
‘‘150’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
SEC. 502. ISSUANCE OF PREFERRED STOCK PERMITTED 
FOR SUBCHAPTER S CORPORATIONS. 
(a) IN GENERAL.—Section 1361 (defining S corpora-
tion) is amended by adding at the end the following new 
subsection: 
‘‘(f) 
TREATMENT
OF
QUALIFIED
PREFERRED 
STOCK.— 
‘‘(1) IN GENERAL.—For purposes of this sub-
chapter— 
‘‘(A) qualified preferred stock shall not be 
treated as a second class of stock, and 
‘‘(B) no person shall be treated as a share-
holder of the corporation by reason of holding 
qualified preferred stock. 
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