Browse Arkansas Code titles and sections
26 U.S.C. § 532 — Corporations subject to accumulated earnings tax
Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** The accumulated earnings tax imposed by section 531 shall apply to every corporation (other than those described in subsection (b)) formed or availed of for the purpose of avoiding the income tax with respect to its shareholders or the shareholders of any other corporation, by permitting earnings and profits to accumulate instead of being divided or distributed.
**(b) Exceptions** The accumulated earnings tax imposed by section 531 shall not apply to—
(1) a personal holding company (as defined in section 542),
(2) a corporation exempt from tax under subchapter F (section 501 and following), or
(3) a passive foreign investment company (as defined in section 1297).
**(c) Application determined without regard to number of shareholders** The application of this part to a corporation shall be determined without regard to the number of shareholders of such corporation.
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 532
Stored review status: release_metadata_unconfirmed. A text match is a research starting point; applicability is not established.
Original supplied file — preserved unchanged
Download original Markdown file
File SHA-256: daa08b42745b4a5edb1f78387600a8f91350355ced75eda54fc64a5393884943. The original may include catalog metadata, neighboring provisions, or embedded records outside this collection's scope. Search shows only the selected federal record. Historical editions and unverified snapshots are not a statement of current law.
Authority boundary: historical or unconfirmed source not current law verified.
Open the recorded source website ↗
Record provenance
Stable record: federal_law:legal_authorities:record_usc_27a30d4f9b5647e9f8d1dd2c
Source file: Laws/federal/codes/united-states-code/title-26/section-532-corporations-subject-to-accumulated-earnings-tax--19e0eeaede.md
Pages: Not recorded – Not recorded
Passage SHA-256: c68506b2450d7d085f480aa1cebd143e61fc19369a2c84e3b4618dd52d0801cf
Source location: Title 26, Chapter 1, § 532; chapter-001-normal-taxes-and-surtaxes.md
Stored source content
**(a) General rule** The accumulated earnings tax imposed by section 531 shall apply to every corporation (other than those described in subsection (b)) formed or availed of for the purpose of avoiding the income tax with respect to its shareholders or the shareholders of any other corporation, by permitting earnings and profits to accumulate instead of being divided or distributed.
**(b) Exceptions** The accumulated earnings tax imposed by section 531 shall not apply to—
(1) a personal holding company (as defined in section 542),
(2) a corporation exempt from tax under subchapter F (section 501 and following), or
(3) a passive foreign investment company (as defined in section 1297).
**(c) Application determined without regard to number of shareholders** The application of this part to a corporation shall be determined without regard to the number of shareholders of such corporation.
Cross-references
Connections may be documented source relationships, shared citations or nearby passages. Each explains its basis; a connection alone does not establish applicability to your situation.
Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** In the case of marketable stock in a passive foreign investment company which is owned (or treated under subsection (g) as owned) by a United States person at the close of any taxable year of such person, at the election of such person—
(1) If the fair market value of such stock as of the close of such taxable year exceeds its adjusted basis, such United States person shall include in gross income for such taxable year an amount equal to the amount of such excess.
(2) If the adjusted basis of such stock exceeds the fair market value of such stock as of the close of such taxable year, such United States person shall be allowed a deduction for such taxable year equal to the lesser of—
(A) the amount of such excess, or
(B) the unreversed inclusions with respect to such stock.
**(b) Basis adjustments**
(1) **In general** — The adjusted basis of stock in a passive foreign investment company—
(A) shall be increased by the amount included in the gross income of the United States person under subsection (a)(1) with respect to such stock, and
(B) shall be decreased by the amount allowed as a deduction to the United States person under subsection (a)(2) with respect to such stock.
(2) **Special rule for stock constructively owned** — In the case of stock in a passive foreign investment company which the United States person is treated as owning under subsection (g)—
(A) the adjustments under paragraph (1) shall apply to such stock in the hands of the person actually holding such stock but only for purposes of determining the subsequent treatment under this chapter of the United States person with respect to such stock, and
(B) similar adjustments shall be made to the adjusted basis of the property by reason of which the United States pe
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 1296
Stored review status: release_metadata_unconfirmed. Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
**(a) Treatment of distributions and stock dispositions**
(1) **Distributions** — If a United States person receives an excess distribution in respect of stock in a passive foreign investment company, then—
(A) the amount of the excess distribution shall be allocated ratably to each day in the taxpayer’s holding period for the stock,
(B) with respect to such excess distribution, the taxpayer’s gross income for the current year shall include (as ordinary income) only the amounts allocated under subparagraph (A) to—
(i) the current year, or
(ii) any period in the taxpayer’s holding period before the 1st day of the 1st taxable year of the company which begins after December 31, 1986, and for which it was a passive foreign investment company, and
(C) the tax imposed by this chapter for the current year shall be increased by the deferred tax amount (determined under subsection (c)).
(2) **Dispositions** — If the taxpayer disposes of stock in a passive foreign investment company, then the rules of paragraph (1) shall apply to any gain recognized on such disposition in the same manner as if such gain were an excess distribution.
(3) **Definitions** — For purposes of this section—
(A) *Holding period* — The taxpayer’s holding period shall be determined under section 1223; except that—
(i) for purposes of applying this section to an excess distribution, such holding period shall be treated as ending on the date of such distribution, and
(ii) if section 1296 applied to such stock with respect to the taxpayer for any prior taxable year, such holding period shall be treated as beginning on the first day of the first taxable year beginning after the last taxable year for which section 1296 so applied.
(B) *Current year* — The term “current year”
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 1291
Stored review status: release_metadata_unconfirmed. Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
**(a) Limitation based on amount of tax** The aggregate amount of credits allowed by this subpart for the taxable year shall not exceed the sum of—
(1) the taxpayer’s regular tax liability for the taxable year reduced by the foreign tax credit allowable under section 27, and
(2) the tax imposed by section 55(a) for the taxable year.
**(b) Regular tax liability** For purposes of this part—
(1) **In general** — The term “regular tax liability” means the tax imposed by this chapter for the taxable year.
(2) **Exception for certain taxes** — For purposes of paragraph (1), any tax imposed by any of the following provisions shall not be treated as tax imposed by this chapter:
(A) section 55 (relating to minimum tax),
(B) section 59A (relating to base erosion and anti-abuse tax),
(C) subsection (m)(5)(B), (q), (t), or (v) of section 72 (relating to additional taxes on certain distributions),
(D) section 143(m) (relating to recapture of proration of Federal subsidy from use of mortgage bonds and mortgage credit certificates),
(E) section 530(d)(4) (relating to additional tax on certain distributions from Coverdell education savings accounts),
(F) section 531 (relating to accumulated earnings tax),
(G) section 541 (relating to personal holding company tax),
(H) section 1351(d)(1) (relating to recoveries of foreign expropriation losses),
(I) section 1374 (relating to tax on certain built-in gains of S corporations),
(J) section 1375 (relating to tax imposed when passive investment income of corporation having subchapter C earnings and profits exceeds 25 percent of gross receipts),
(K) subparagraph (A) of section 7518(g)(6) (relating to nonqualified withdrawals from capital construction funds taxed at highest marginal rate),
(L) sections 87
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 26
Stored review status: release_metadata_unconfirmed. Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
**(a) Definition** For purposes of this subtitle, the term “accumulated taxable income” means the taxable income, adjusted in the manner provided in subsection (b), minus the sum of the dividends paid deduction (as defined in section 561) and the accumulated earnings credit (as defined in subsection (c)).
**(b) Adjustments to taxable income** For purposes of subsection (a), taxable income shall be adjusted as follows:
(1) **Taxes** — There shall be allowed as a deduction Federal income and excess profits taxes and income, war profits, and excess profits taxes of foreign countries and possessions of the United States (to the extent not allowable as a deduction under section 275(a)(4)), accrued during the taxable year or deemed to be paid by a domestic corporation under section 960 for the taxable year, but not including the accumulated earnings tax imposed by section 531 or the personal holding company tax imposed by section 541.
(2) **Charitable contributions** — The deduction for charitable contributions provided under section 170 shall be allowed without regard to section 170(b)(2).
(3) **Special deductions disallowed** — The special deductions for corporations provided in part VIII (except section 248) of subchapter B (section 241 and following, relating to the deduction for dividends received by corporations, etc.) shall not be allowed.
(4) **Net operating loss** — The net operating loss deduction provided in section 172 shall not be allowed.
(5) **Capital losses**
(A) *In general* — Except as provided in subparagraph (B), there shall be allowed as a deduction an amount equal to the net capital loss for the taxable year (determined without regard to paragraph (7)(A)).
(B) *Recapture of previous deductions for capital gains* — The aggregate amount allowab
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 535
Stored review status: release_metadata_unconfirmed. Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
**(a) Inclusion**
(1) **In general** — Every United States person who owns (or is treated under section 1298(a) as owning) stock of a qualified electing fund at any time during the taxable year of such fund shall include in gross income—
(A) as ordinary income, such shareholder’s pro rata share of the ordinary earnings of such fund for such year, and
(B) as long-term capital gain, such shareholder’s pro rata share of the net capital gain of such fund for such year.
(2) **Year of inclusion** — The inclusion under paragraph (1) shall be for the taxable year of the shareholder in which or with which the taxable year of the fund ends.
**(b) Pro rata share** The pro rata share referred to in subsection (a) in the case of any shareholder is the amount which would have been distributed with respect to the shareholder’s stock if, on each day during the taxable year of the fund, the fund had distributed to each shareholder a pro rata share of that day’s ratable share of the fund’s ordinary earnings and net capital gain for such year. To the extent provided in regulations, if the fund establishes to the satisfaction of the Secretary that it uses a shorter period than the taxable year to determine shareholders’ interests in the earnings of such fund, pro rata shares may be determined by using such shorter period.
**(c) Previously taxed amounts distributed tax free** If the taxpayer establishes to the satisfaction of the Secretary that any amount distributed by a passive foreign investment company is paid out of earnings and profits of the company which were included under subsection (a) in the income of any United States person, such amount shall be treated, for purposes of this chapter, as a distribution which is not a dividend; except that such distribution shall immed
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 1293
Stored review status: release_metadata_unconfirmed. Incoming connection: Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
**(a) In general** For purposes of this part, except as otherwise provided in this subpart, the term “passive foreign investment company” means any foreign corporation if—
(1) 75 percent or more of the gross income of such corporation for the taxable year is passive income, or
(2) the average percentage of assets (as determined in accordance with subsection (e)) held by such corporation during the taxable year which produce passive income or which are held for the production of passive income is at least 50 percent.
**(b) Passive income** For purposes of this section—
(1) **In general** — Except as provided in paragraph (2), the term “passive income” means any income which is of a kind which would be foreign personal holding company income as defined in section 954(c).
(2) **Exceptions** — Except as provided in regulations, the term “passive income” does not include any income—
(A) derived in the active conduct of a banking business by an institution licensed to do business as a bank in the United States (or, to the extent provided in regulations, by any other corporation),
(B) derived in the active conduct of an insurance business by a qualifying insurance corporation (as defined in subsection (f)),
(C) which is interest, a dividend, or a rent or royalty, which is received or accrued from a related person (within the meaning of section 954(d)(3)) to the extent such amount is properly allocable (under regulations prescribed by the Secretary) to income of such related person which is not passive income, or
(D) which is export trade income of an export trade corporation (as defined in section 971).
For purposes of subparagraph (C), the term “related person” has the meaning given such term by section 954(d)(3) determined by substituting “foreign corporat
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 1297
Stored review status: release_metadata_unconfirmed. Incoming connection: Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
**(a) Attribution of ownership** For purposes of this part—
(1) **Attribution to United States persons** — This subsection—
(A) shall apply to the extent that the effect is to treat stock of a passive foreign investment company as owned by a United States person, and
(B) except to the extent provided in regulations, shall not apply to treat stock owned (or treated as owned under this subsection) by a United States person as owned by any other person.
(2) **Corporations**
(A) *In general* — If 50 percent or more in value of the stock of a corporation is owned, directly or indirectly, by or for any person, such person shall be considered as owning the stock owned directly or indirectly by or for such corporation in that proportion which the value of the stock which such person so owns bears to the value of all stock in the corporation.
(B) *50-percent limitation not to apply to PFIC* — For purposes of determining whether a shareholder of a passive foreign investment company is treated as owning stock owned directly or indirectly by or for such company, subparagraph (A) shall be applied without regard to the 50-percent limitation contained therein. Section 1297(d) shall not apply in determining whether a corporation is a passive foreign investment company for purposes of this subparagraph.
(3) **Partnerships, etc.** — Stock owned, directly or indirectly, by or for a partnership, estate, or trust shall be considered as being owned proportionately by its partners or beneficiaries.
(4) **Options** — To the extent provided in regulations, if any person has an option to acquire stock, such stock shall be considered as owned by such person. For purposes of this paragraph, an option to acquire such an option, and each one of a series of such options, shall be cons
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 1298
Stored review status: release_metadata_unconfirmed. Incoming connection: Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
**(a) Imposition of tax** There is hereby imposed a tax on every regulated investment company for each calendar year equal to 4 percent of the excess (if any) of—
(1) the required distribution for such calendar year, over
(2) the distributed amount for such calendar year.
**(b) Required distribution** For purposes of this section—
(1) **In general** — The term “required distribution” means, with respect to any calendar year, the sum of—
(A) 98 percent of the regulated investment company’s ordinary income for such calendar year, plus
(B) 98.2 percent of the regulated investment company’s capital gain net income for the 1-year period ending on October 31 of such calendar year.
(2) **Increase by prior year shortfall** — The amount determined under paragraph (1) for any calendar year shall be increased by the excess (if any) of—
(A) the grossed up required distribution for the preceding calendar year, over
(B) the distributed amount for such preceding calendar year.
(3) **Grossed up required distribution** — The grossed up required distribution for any calendar year is the required distribution for such year determined—
(A) with the application of paragraph (2) to such taxable year, and
(B) by substituting “100 percent” for each percentage set forth in paragraph (1).
**(c) Distributed amount** For purposes of this section—
(1) **In general** — The term “distributed amount” means, with respect to any calendar year, the sum of—
(A) the deduction for dividends paid (as defined in section 561) during such calendar year, and
(B) any amount on which tax is imposed under subsection (b)(1) or (b)(3)(A) of section 852 for any taxable year ending in such calendar year.
(2) **Increase by prior year overdistribution** — The amount determined under parag
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 4982
Stored review status: release_metadata_unconfirmed. Incoming connection: Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** For purposes of this subtitle, the term “personal holding company” means any corporation (other than a corporation described in subsection (c)) if—
(1) **Adjusted ordinary gross income requirement** — At least 60 percent of its adjusted ordinary gross income (as defined in section 543(b)(2)) for the taxable year is personal holding company income (as defined in section 543(a)), and
(2) **Stock ownership requirement** — At any time during the last half of the taxable year more than 50 percent in value of its outstanding stock is owned, directly or indirectly, by or for not more than 5 individuals. For purposes of this paragraph, an organization described in section 401(a), 501(c)(17), or 509(a) or a portion of a trust permanently set aside or to be used exclusively for the purposes described in section 642(c) or a corresponding provision of a prior income tax law shall be considered an individual.
**(b) Corporations filing consolidated returns**
(1) **General rule** — In the case of an affiliated group of corporations filing or required to file a consolidated return under section 1501 for any taxable year, the adjusted ordinary gross income requirement of subsection (a)(1) of this section shall, except as provided in paragraphs (2) and (3), be applied for such year with respect to the consolidated adjusted ordinary gross income and the consolidated personal holding company income of the affiliated group. No member of such an affiliated group shall be considered to meet such adjusted ordinary gross income requirement unless the affiliated group meets such requirement.
(2) **Ineligible affiliated group** — Paragraph (1) shall not apply to an affiliated group of corporations if—
(A) any member of the affiliated group of corporations (including t
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 542
Stored review status: release_metadata_unconfirmed. Incoming connection: Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
**(a) Requirements applicable to regulated investment companies** The provisions of this part (other than subsection (c) of this section) shall not be applicable to a regulated investment company for a taxable year unless—
(1) the deduction for dividends paid during the taxable year (as defined in section 561, but without regard to capital gain dividends) equals or exceeds the sum of—
(A) 90 percent of its investment company taxable income for the taxable year determined without regard to subsection (b)(2)(D); and
(B) 90 percent of the excess of (i) its interest income excludable from gross income under section 103(a) over (ii) its deductions disallowed under sections 265 and 171(a)(2), and
(2) either—
(A) the provisions of this part applied to the investment company for all taxable years ending on or after November 8, 1983, or
(B) as of the close of the taxable year, the investment company has no earnings and profits accumulated in any taxable year to which the provisions of this part (or the corresponding provisions of prior law) did not apply to it.
The Secretary may waive the requirements of paragraph (1) for any taxable year if the regulated investment company establishes to the satisfaction of the Secretary that it was unable to meet such requirements by reason of distributions previously made to meet the requirements of section 4982.
**(b) Method of taxation of companies and shareholders**
(1) **Imposition of tax on regulated investment companies** — There is hereby imposed for each taxable year upon the investment company taxable income of every regulated investment company a tax computed as provided in section 11, as though the investment company taxable income were the taxable income referred to in section 11.
(2) **Investment company taxable
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 852
Stored review status: release_metadata_unconfirmed. Incoming connection: Explicit cross-reference supplied in source Markdown; currentness and applicability require review.