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26 U.S.C. § 183 — Activities not engaged in for profit
Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** In the case of an activity engaged in by an individual or an S corporation, if such activity is not engaged in for profit, no deduction attributable to such activity shall be allowed under this chapter except as provided in this section.
**(b) Deductions allowable** In the case of an activity not engaged in for profit to which subsection (a) applies, there shall be allowed—
(1) the deductions which would be allowable under this chapter for the taxable year without regard to whether or not such activity is engaged in for profit, and
(2) a deduction equal to the amount of the deductions which would be allowable under this chapter for the taxable year only if such activity were engaged in for profit, but only to the extent that the gross income derived from such activity for the taxable year exceeds the deductions allowable by reason of paragraph (1).
**(c) Activity not engaged in for profit defined** For purposes of this section, the term “activity not engaged in for profit” means any activity other than one with respect to which deductions are allowable for the taxable year under section 162 or under paragraph (1) or (2) of section 212.
**(d) Presumption** If the gross income derived from an activity for 3 or more of the taxable years in the period of 5 consecutive taxable years which ends with the taxable year exceeds the deductions attributable to such activity (determined without regard to whether or not such activity is engaged in for profit), then, unless the Secretary establishes to the contrary, such activity shall be presumed for purposes of this chapter for such taxable year to be an activity engaged in for profit. In the case of an activity which consists in major part of the breeding, training, showing, or racing of horses, the preced
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Source file: Laws/federal/codes/united-states-code/title-26/section-183-activities-not-engaged-in-for-profit--9c98cb8e67.md
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Source location: Title 26, Chapter 1, § 183; chapter-001-normal-taxes-and-surtaxes.md
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**(a) General rule** In the case of an activity engaged in by an individual or an S corporation, if such activity is not engaged in for profit, no deduction attributable to such activity shall be allowed under this chapter except as provided in this section.
**(b) Deductions allowable** In the case of an activity not engaged in for profit to which subsection (a) applies, there shall be allowed—
(1) the deductions which would be allowable under this chapter for the taxable year without regard to whether or not such activity is engaged in for profit, and
(2) a deduction equal to the amount of the deductions which would be allowable under this chapter for the taxable year only if such activity were engaged in for profit, but only to the extent that the gross income derived from such activity for the taxable year exceeds the deductions allowable by reason of paragraph (1).
**(c) Activity not engaged in for profit defined** For purposes of this section, the term “activity not engaged in for profit” means any activity other than one with respect to which deductions are allowable for the taxable year under section 162 or under paragraph (1) or (2) of section 212.
**(d) Presumption** If the gross income derived from an activity for 3 or more of the taxable years in the period of 5 consecutive taxable years which ends with the taxable year exceeds the deductions attributable to such activity (determined without regard to whether or not such activity is engaged in for profit), then, unless the Secretary establishes to the contrary, such activity shall be presumed for purposes of this chapter for such taxable year to be an activity engaged in for profit. In the case of an activity which consists in major part of the breeding, training, showing, or racing of horses, the preceding sentence shall be applied by substituting “2” for “3” and “7” for “5”.
**(e) Special rule**
(1) **In general** — A determination as to whether the presumption provided by subsection (d) applies with respect to any activity shall, if the taxpayer so elects, not be made before the close of the fourth taxable year (sixth taxable year, in the case of an activity described in the last sentence of such subsection) following the taxable year in which the taxpayer first engages in the activity.
(2) **Initial period** — If the taxpayer makes an election under paragraph (1), the presumption provided by subsection (d) shall apply to each taxable year in the 5-taxable year (or 7-taxable year) period beginning with the taxable year in which the taxpayer first engages in the activity, if the gross income derived from the activity for 3 (or 2 if applicable) or more of the taxable years in such period exceeds the deductions attributable to the activity (determined without regard to whether or not the activity is engaged in for profit).
(3) **Election** — An election under paragraph (1) shall be made at such time and manner, and subject to such terms and conditions, as the Secretary may prescribe.
(4) **Time for assessing deficiency attributable to activity** — If a taxpayer makes an election under paragraph (1) with respect to an activity, the statutory period for the assessment of any deficiency attributable to such activity shall not expire before the expiration of 2 years after the date prescribed by law (determined without extensions) for filing the return of tax under chapter 1 for the last taxable year in the period of 5 taxable years (or 7 taxable years) to which the election relates. Such deficiency may be assessed notwithstanding the provisions of any law or rule of law which would otherwise prevent such an assessment.
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Federal law — U.S. Code and appendices · legal_authorities
### Statutory Notes
Section, act Aug. 16, 1954, ch. 736, 68A Stat. 81, related to the limitation on deductions allowable to certain individuals. See [section 183 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section183&num=0&edition=prelim).
#### Effective Date of Repeal
Repeal applicable to taxable years beginning after Dec. 31, 1969, see section 213(d) of Pub. L. 91–172, set out as an Effective Date note under [section 183 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section183&num=0&edition=prelim).
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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
For limitation period in case of—
(1) Adjustments to accrued foreign taxes, see section 905(c).
(2) Change of treatment with respect to itemized deductions where taxpayer and his spouse make separate returns, see section 63(e)(3).
(3) Involuntary conversion of property, see section 1033(a)(2)(C) and (D).
(4) Application by fiduciary for discharge from personal liability for estate tax, see section 2204.
(5) Insolvent banks and trust companies, see section 7507.
(6) Service in a combat zone, etc., see section 7508.
(7) Claims against transferees and fiduciaries, see chapter 71.
(8) Assessments to recover excessive amounts paid under section 6420 (relating to gasoline used on farms), 6421 (relating to gasoline used for certain nonhighway purposes or by local transit systems), or 6427 (relating to fuels not used for taxable purposes) and assessments of civil penalties under section 6675 for excessive claims under section 6420, 6421, or 6427, see section 6206.
(9) Assessment and collection of interest, see section 6601(g).
(10) Assessment of civil penalties under section 6694 or 6695, see section 6696(d)(1).
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Federal law — U.S. Code and appendices · legal_authorities
**(a) S corporation defined**
(1) **In general** — For purposes of this title, the term “S corporation” means, with respect to any taxable year, a small business corporation for which an election under section 1362(a) is in effect for such year.
(2) **C corporation** — For purposes of this title, the term “C corporation” means, with respect to any taxable year, a corporation which is not an S corporation for such year.
**(b) Small business corporation**
(1) **In general** — For purposes of this subchapter, the term “small business corporation” means a domestic corporation which is not an ineligible corporation and which does not—
(A) have more than 100 shareholders,
(B) have as a shareholder a person (other than an estate, a trust described in subsection (c)(2), or an organization described in subsection (c)(6)) who is not an individual,
(C) have a nonresident alien as a shareholder, and
(D) have more than 1 class of stock.
(2) **Ineligible corporation defined** — For purposes of paragraph (1), the term “ineligible corporation” means any corporation which is—
(A) a financial institution which uses the reserve method of accounting for bad debts described in section 585,
(B) an insurance company subject to tax under subchapter L, or
(C) a DISC or former DISC.
(3) **Treatment of certain wholly owned subsidiaries**
(A) *In general* — Except as provided in regulations prescribed by the Secretary, for purposes of this title—
(i) a corporation which is a qualified subchapter S subsidiary shall not be treated as a separate corporation, and
(ii) all assets, liabilities, and items of income, deduction, and credit of a qualified subchapter S subsidiary shall be treated as assets, liabilities, and such items (as the case may be) of the S corp
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Federal law — U.S. Code and appendices · legal_authorities
**(a) In general** If the Secretary determines that there is a deficiency in respect of any tax imposed by subtitles A or B or chapter 41, 42, 43, or 44 he is authorized to send notice of such deficiency to the taxpayer by certified mail or registered mail. Such notice shall include a notice to the taxpayer of the taxpayer’s right to contact a local office of the taxpayer advocate and the location and phone number of the appropriate office.
**(b) Address for notice of deficiency**
(1) **Income and gift taxes and certain excise taxes** — In the absence of notice to the Secretary under section 6903 of the existence of a fiduciary relationship, notice of a deficiency in respect of a tax imposed by subtitle A, chapter 12, chapter 41, chapter 42, chapter 43, or chapter 44 if mailed to the taxpayer at his last known address, shall be sufficient for purposes of subtitle A, chapter 12, chapter 41, chapter 42, chapter 43, chapter 44, and this chapter even if such taxpayer is deceased, or is under a legal disability, or, in the case of a corporation, has terminated its existence.
(2) **Joint income tax return** — In the case of a joint income tax return filed by husband and wife, such notice of deficiency may be a single joint notice, except that if the Secretary has been notified by either spouse that separate residences have been established, then, in lieu of the single joint notice, a duplicate original of the joint notice shall be sent by certified mail or registered mail to each spouse at his last known address.
(3) **Estate tax** — In the absence of notice to the Secretary under section 6903 of the existence of a fiduciary relationship, notice of a deficiency in respect of a tax imposed by chapter 11, if addressed in the name of the decedent or other person subject to l
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Federal law — U.S. Code and appendices · legal_authorities
Page 912
TITLE 26—INTERNAL REVENUE CODE
[§ 182
apply to productions commencing after December 31,
2015.
‘‘(B) COMMENCEMENT.—For purposes of subpara-
graph (A), the date on which a qualified live theat-
rical production commences is the date of the first
public performance of such production for a paying
audience.’’
EFFECTIVE DATE OF 2014 AMENDMENT
Pub. L. 113–295, div. A, title I, § 129(b), Dec. 19, 2014, 128
Stat. 4018, provided that: ‘‘The amendment made by
this section [amending this section] shall apply to pro-
ductions commencing after December 31, 2013.’’
EFFECTIVE DATE OF 2013 AMENDMENT
Pub. L. 112–240, title III, § 317(b), Jan. 2, 2013, 126 Stat.
2331, provided that: ‘‘The amendment made by this sec-
tion [amending this section] shall apply to productions
commencing after December 31, 2011.’’
EFFECTIVE DATE OF 2010 AMENDMENT
Pub. L. 111–312, title VII, § 744(b), Dec. 17, 2010, 124
Stat. 3319, provided that: ‘‘The amendment made by
this section [amending this section] shall apply to pro-
ductions commencing after December 31, 2009.’’
EFFECTIVE DATE OF 2008 AMENDMENT
Pub. L. 110–343, div. C, title V, § 502(e), Oct. 3, 2008, 122
Stat. 3877, provided that:
‘‘(1) IN
GENERAL.—Except as otherwise provided in
this subsection, the amendments made by this section
[amending this section and section 199 of this title]
shall apply to qualified film and television productions
commencing after December 31, 2007.
‘‘(2) DEDUCTION.—The amendments made by sub-
section (c) [amending section 199 of this title] shall
apply to taxable years beginning after December 31,
2007.’’
EFFECTIVE DATE OF 2005 AMENDMENT
Amendment by Pub. L. 109–135 effective as if included
in the provision of the American Jobs Creation Act of
2004, Pub. L. 108–357, to which such amendme
Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 183
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