Small Business Consumed Income Tax Act of 1985

[AI summary unavailable — showing source text] Small Business Consumed Income Tax Act of 1985 - Amends the Internal Revenue Code to allow a qualified small business corporation to elect tax treatment as a "subchapter W corporation." Defines a "subchapter W corporation" as any small business corporation which: (1) has 95 percent or more of its gross receipts for the taxable year in receipts which are not passive investment income; (2) has 95 percent or more of the aggregate adjusted bases of its assets in assets used or held for use in its trade or business; and (3) has not made an election for tax treatment as a subchapter S corporation. Allows such a corporation to make an election for treatment as a subchapter W corporation if: (1) all shareholders consent to such an election; (2) neither the corporation nor any predecessor corporation has made a previous election; (3) the gross receipts for the taxable year in which the election is made do not exceed $20,000,000; and (4) the aggregate adjusted bases of such corporation's assets do not exceed $5,000,000. Provides that such an election shall be effective for the taxable year in which made and the nine succeeding taxable years. Provides that the income of a qualified subchapter…