The S Corporation Modernization Act of 2025 aims to reform the tax treatment of S corporations, particularly addressing the complexities surrounding built-in gains when a shareholder passes away. The legislation seeks to provide clearer guidelines and deductions that benefit shareholders and their estates, thereby easing the tax implications during ownership transitions. Among the key provisions, the Act introduces a new deduction for shareholders inheriting stock, allowing them to amortize the built-in gain over a 15-year period, which can significantly reduce taxable income.