A bill to amend the Internal Revenue Code of 1986 to provide for S corporation reform, and for other purposes.

S Corporation Modernization Act of 2017 This bill amends the Internal Revenue Code, with respect to the tax treatment of S corporations, to: allow a nonresident alien to be a qualifying beneficiary of an electing small business trust (ESBT), which is a type of trust that is permitted to hold shares in an S corporation; allow S corporations to increase passive investment income from 25% to 60% without incurring additional taxes; eliminate a provision terminating the S corporation status of corporations with excessive passive income for three consecutive years; allow any S corporation bank to have individual retirement account shareholders; allow ESBTs to claim expanded tax deductions for charitable contributions; allow an adjustment to the basis of an S corporation's assets upon the death of a shareholder, in the form of a 15-year amortization deduction; and extend the time period for making S corporation elections.