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26 U.S.C. § 1294 — Election to extend time for payment of tax on undistributed earnings
Federal law — U.S. Code and appendices · legal_authorities
**(a) Extension allowed by election**
(1) **In general** — At the election of the taxpayer, the time for payment of any undistributed PFIC earnings tax liability of the taxpayer for the taxable year shall be extended to the extent and subject to the limitations provided in this section.
(2) **Election not permitted where amounts otherwise includible under section 951** — The taxpayer may not make an election under paragraph (1) with respect to the undistributed PFIC earnings tax liability attributable to a qualified electing fund for the taxable year if any amount is includible in the gross income of the taxpayer under section 951 with respect to such fund for such taxable year.
**(b) Definitions** For purposes of this section—
(1) **Undistributed PFIC earnings tax liability** — The term “undistributed PFIC earnings tax liability” means, in the case of any taxpayer, the excess of—
(A) the tax imposed by this chapter for the taxable year, over
(B) the tax which would be imposed by this chapter for such year without regard to the inclusion in gross income under section 1293 of the undistributed earnings of a qualified electing fund.
(2) **Undistributed earnings** — The term “undistributed earnings” means, with respect to any qualified electing fund, the excess (if any) of—
(A) the amount includible in gross income by reason of section 1293(a) for the taxable year, over
(B) the amount not includible in gross income by reason of section 1293(c) for such taxable year.
**(c) Termination of extension**
(1) **Distributions**
(A) *In general* — If a distribution is not includible in gross income for the taxable year by reason of section 1293(c), then the extension under subsection (a) for payment of the undistributed PFIC earnings tax liability with respect
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Source file: Laws/federal/codes/united-states-code/title-26/section-1294-election-to-extend-time-for-payment-of-tax-on-undistributed-earnings--f2fc55ec59.md
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Source location: Title 26, Chapter 1, § 1294; chapter-001-normal-taxes-and-surtaxes.md
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**(a) Extension allowed by election**
(1) **In general** — At the election of the taxpayer, the time for payment of any undistributed PFIC earnings tax liability of the taxpayer for the taxable year shall be extended to the extent and subject to the limitations provided in this section.
(2) **Election not permitted where amounts otherwise includible under section 951** — The taxpayer may not make an election under paragraph (1) with respect to the undistributed PFIC earnings tax liability attributable to a qualified electing fund for the taxable year if any amount is includible in the gross income of the taxpayer under section 951 with respect to such fund for such taxable year.
**(b) Definitions** For purposes of this section—
(1) **Undistributed PFIC earnings tax liability** — The term “undistributed PFIC earnings tax liability” means, in the case of any taxpayer, the excess of—
(A) the tax imposed by this chapter for the taxable year, over
(B) the tax which would be imposed by this chapter for such year without regard to the inclusion in gross income under section 1293 of the undistributed earnings of a qualified electing fund.
(2) **Undistributed earnings** — The term “undistributed earnings” means, with respect to any qualified electing fund, the excess (if any) of—
(A) the amount includible in gross income by reason of section 1293(a) for the taxable year, over
(B) the amount not includible in gross income by reason of section 1293(c) for such taxable year.
**(c) Termination of extension**
(1) **Distributions**
(A) *In general* — If a distribution is not includible in gross income for the taxable year by reason of section 1293(c), then the extension under subsection (a) for payment of the undistributed PFIC earnings tax liability with respect to the earnings to which such distribution is attributable shall expire on the last date prescribed by law (determined without regard to extensions) for filing the return of tax for such taxable year.
(B) *Ordering rule* — For purposes of subparagraph (A), a distribution shall be treated as made from the most recently accumulated earnings and profits.
(2) **Transfers, etc.** — If—
(A) stock in a passive foreign investment company is transferred during the taxable year, or
(B) a passive foreign investment company ceases to be a qualified electing fund,
all extensions under subsection (a) for payment of undistributed PFIC earnings tax liability attributable to such stock (or, in the case of such a cessation, attributable to any stock in such company) which had not expired before the date of such transfer or cessation shall expire on the last date prescribed by law (determined without regard to extensions) for filing the return of tax for the taxable year in which such transfer or cessation occurs. To the extent provided in regulations, the preceding sentence shall not apply in the case of a transfer in a transaction with respect to which gain or loss is not recognized (in whole or in part), and the transferee in such transaction shall succeed to the treatment under this section of the transferor.
(3) **Jeopardy** — If the Secretary believes that collection of an amount to which an extension under this section relates is in jeopardy, the Secretary shall immediately terminate such extension with respect to such amount, and notice and demand shall be made by him for payment of such amount.
**(d) Election** The election under subsection (a) shall be made not later than the time prescribed by law (including extensions) for filing the return of tax imposed by this chapter for the taxable year.
**(e) Authority to require bond** Section 6165 shall apply to any extension under this section as though the Secretary were extending the time for payment of the tax.
**(f) Treatment of loans to shareholder** For purposes of this section and section 1293, any loan by a qualified electing fund (directly or indirectly) to a shareholder of such fund shall be treated as a distribution to such shareholder.
**(g) Cross reference** For provisions providing for interest for the period of the extension under this section, see section 6601.
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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
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Married individuals filing joint returns and surviving spouses** There is hereby imposed on the taxable income of—
(1) every married individual (as defined in section 7703) who makes a single return jointly with his spouse under section 6013, and
(2) every surviving spouse (as defined in section 2(a)),
a tax determined in accordance with the following table: If taxable income is:The tax is: Not over $36,90015% of taxable income. Over $36,900 but not over $89,150$5,535, plus 28% of the excess over $36,900. Over $89,150 but not over $140,000$20,165, plus 31% of the excess over $89,150. Over $140,000 but not over $250,000$35,928.50, plus 36% of the excess over $140,000. Over $250,000$75,528.50, plus 39.6% of the excess over $250,000.
**(b) Heads of households** There is hereby imposed on the taxable income of every head of a household (as defined in section 2(b)) a tax determined in accordance with the following table: If taxable income is:The tax is: Not over $29,60015% of taxable income. Over $29,600 but not over $76,400$4,440, plus 28% of the excess over $29,600. Over $76,400 but not over $127,500$17,544, plus 31% of the excess over $76,400. Over $127,500 but not over $250,000$33,385, plus 36% of the excess over $127,500. Over $250,000$77,485, plus 39.6% of the excess over $250,000.
**(c) Unmarried individuals (other than surviving spouses and heads of households)** There is hereby imposed on the taxable income of every individual (other than a surviving spouse as defined in section 2(a) or the head of a household as defined in section 2(b)) who is not a married individual (as defined in section 7703) a tax determined in accordance with the following table: If taxable income is:The tax is: Not over $22,10015% of taxable income. Over $22,100 but not over $53,50
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Federal law — U.S. Code and appendices · legal_authorities
Page 2412
TITLE 26—INTERNAL REVENUE CODE
§ 1294
2017, and to taxable years of United States shareholders
in which or with which such taxable years of foreign
corporations end, see section 14301(d) of Pub. L. 115–97,
set out as a note under section 78 of this title.
EFFECTIVE DATE OF 1997 AMENDMENT
Amendment by Pub. L. 105–34 applicable to taxable
years of United States persons beginning after Dec. 31,
1997, and to taxable years of foreign corporations end-
ing with or within such taxable years of United States
persons, see section 1124 of Pub. L. 105–34, set out as a
note under section 532 of this title.
EFFECTIVE DATE OF 1993 AMENDMENT
Amendment by Pub. L. 103–66 applicable to taxable
years of foreign corporations beginning after Sept. 30,
1993, and to taxable years of United States shareholders
in which or with which such taxable years of foreign
corporations end, see section 13231(e) of Pub. L. 103–66,
set out as a note under section 951 of this title.
EFFECTIVE DATE OF 1988 AMENDMENT
Amendment by Pub. L. 100–647 effective, except as
otherwise provided, as if included in the provision of
the Tax Reform Act of 1986, Pub. L. 99–514, to which
such amendment relates, see section 1019(a) of Pub. L.
100–647, set out as a note under section 1 of this title.
EFFECTIVE DATE
Section applicable to taxable years of foreign cor-
porations beginning after Dec. 31, 1986, see section
1235(h) of Pub. L. 99–514, set out as a note under section
1291 of this title.
§ 1294. Election to extend time for payment of tax
on undistributed earnings
(a) Extension allowed by election
(1) In general
At the election of the taxpayer, the time for
payment of any undistributed PFIC earnings
tax liability of the taxpayer for the taxable
year shall be extended to the ex
Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 1294
Stored review status: historical_2024_not_currentness_verified. Same stored citation; legal effect and authority still require review.