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26 U.S.C. § 441 — Period for computation of taxable income
Federal law — U.S. Code and appendices · legal_authorities
**(a) Computation of taxable income** Taxable income shall be computed on the basis of the taxpayer’s taxable year.
**(b) Taxable year** For purposes of this subtitle, the term “taxable year” means—
(1) the taxpayer’s annual accounting period, if it is a calendar year or a fiscal year;
(2) the calendar year, if subsection (g) applies;
(3) the period for which the return is made, if a return is made for a period of less than 12 months; or
(4) in the case of a DISC filing a return for a period of at least 12 months, the period determined under subsection (h).
**(c) Annual accounting period** For purposes of this subtitle, the term “annual accounting period” means the annual period on the basis of which the taxpayer regularly computes his income in keeping his books.
**(d) Calendar year** For purposes of this subtitle, the term “calendar year” means a period of 12 months ending on December 31.
**(e) Fiscal year** For purposes of this subtitle, the term “fiscal year” means a period of 12 months ending on the last day of any month other than December. In the case of any taxpayer who has made the election provided by subsection (f) the term means the annual period (varying from 52 to 53 weeks) so elected.
**(f) Election of year consisting of 52–53 weeks**
(1) **General rule** — A taxpayer who, in keeping his books, regularly computes his income on the basis of an annual period which varies from 52 to 53 weeks and ends always on the same day of the week and ends always—
(A) on whatever date such same day of the week last occurs in a calendar month, or
(B) on whatever date such same day of the week falls which is nearest to the last day of a calendar month,
may (in accordance with the regulations prescribed under paragraph (3)) elect to compute his taxable inc
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Source file: Laws/federal/codes/united-states-code/title-26/section-441-period-for-computation-of-taxable-income--6b7a5543b3.md
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Source location: Title 26, Chapter 1, § 441; chapter-001-normal-taxes-and-surtaxes.md
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**(a) Computation of taxable income** Taxable income shall be computed on the basis of the taxpayer’s taxable year.
**(b) Taxable year** For purposes of this subtitle, the term “taxable year” means—
(1) the taxpayer’s annual accounting period, if it is a calendar year or a fiscal year;
(2) the calendar year, if subsection (g) applies;
(3) the period for which the return is made, if a return is made for a period of less than 12 months; or
(4) in the case of a DISC filing a return for a period of at least 12 months, the period determined under subsection (h).
**(c) Annual accounting period** For purposes of this subtitle, the term “annual accounting period” means the annual period on the basis of which the taxpayer regularly computes his income in keeping his books.
**(d) Calendar year** For purposes of this subtitle, the term “calendar year” means a period of 12 months ending on December 31.
**(e) Fiscal year** For purposes of this subtitle, the term “fiscal year” means a period of 12 months ending on the last day of any month other than December. In the case of any taxpayer who has made the election provided by subsection (f) the term means the annual period (varying from 52 to 53 weeks) so elected.
**(f) Election of year consisting of 52–53 weeks**
(1) **General rule** — A taxpayer who, in keeping his books, regularly computes his income on the basis of an annual period which varies from 52 to 53 weeks and ends always on the same day of the week and ends always—
(A) on whatever date such same day of the week last occurs in a calendar month, or
(B) on whatever date such same day of the week falls which is nearest to the last day of a calendar month,
may (in accordance with the regulations prescribed under paragraph (3)) elect to compute his taxable income for purposes of this subtitle on the basis of such annual period. This paragraph shall apply to taxable years ending after the date of the enactment of this title.
(2) **Special rules for 52–53-week year**
(A) *Effective dates* — In any case in which the effective date or the applicability of any provision of this title is expressed in terms of taxable years beginning, including, or ending with reference to a specified date which is the first or last day of a month, a taxable year described in paragraph (1) shall (except for purposes of the computation under section 15) be treated—
(i) as beginning with the first day of the calendar month beginning nearest to the first day of such taxable year, or
(ii) as ending with the last day of the calendar month ending nearest to the last day of such taxable year,
as the case may be.
(B) *Change in accounting period* — In the case of a change from or to a taxable year described in paragraph (1)—
(i) if such change results in a short period (within the meaning of section 443) of 359 days or more, or of less than 7 days, section 443(b) (relating to alternative tax computation) shall not apply;
(ii) if such change results in a short period of less than 7 days, such short period shall, for purposes of this subtitle, be added to and deemed a part of the following taxable year; and
(iii) if such change results in a short period to which subsection (b) of section 443 applies, the taxable income for such short period shall be placed on an annual basis for purposes of such subsection by multiplying the gross income for such short period (minus the deductions allowed by this chapter for the short period, but only the adjusted amount of the deductions for personal exemptions as described in section 443(c)) by 365, by dividing the result by the number of days in the short period, and the tax shall be the same part of the tax computed on the annual basis as the number of days in the short period is of 365 days.
(3) **Special rule for partnerships, S corporations, and personal service corporations** — The Secretary may by regulation provide terms and conditions for the application of this subsection to a partnership, S corporation, or personal service corporation (within the meaning of section 441(i)(2)).
(4) **Regulations** — The Secretary shall prescribe such regulations as he deems necessary for the application of this subsection.
**(g) No books kept; no accounting period** Except as provided in section 443 (relating to returns for periods of less than 12 months), the taxpayer’s taxable year shall be the calendar year if—
(1) the taxpayer keeps no books;
(2) the taxpayer does not have an annual accounting period; or
(3) the taxpayer has an annual accounting period, but such period does not qualify as a fiscal year.
**(h) Taxable year of DISC’s**
(1) **In general** — For purposes of this subtitle, the taxable year of any DISC shall be the taxable year of that shareholder (or group of shareholders with the same 12-month taxable year) who has the highest percentage of voting power.
(2) **Special rule where more than one shareholder (or group) has highest percentage** — If 2 or more shareholders (or groups) have the highest percentage of voting power under paragraph (1), the taxable year of the DISC shall be the same 12-month period as that of any such shareholder (or group).
(3) **Subsequent changes of ownership** — The Secretary shall prescribe regulations under which paragraphs (1) and (2) shall apply to a change of ownership of a corporation after the taxable year of the corporation has been determined under paragraph (1) or (2) only if such change is a substantial change of ownership.
(4) **Voting power determined** — For purposes of this subsection, voting power shall be determined on the basis of total combined voting power of all classes of stock of the corporation entitled to vote.
**(i) Taxable year of personal service corporations**
(1) **In general** — For purposes of this subtitle, the taxable year of any personal service corporation shall be the calendar year unless the corporation establishes, to the satisfaction of the Secretary, a business purpose for having a different period for its taxable year. For purposes of this paragraph, any deferral of income to shareholders shall not be treated as a business purpose.
(2) **Personal service corporation** — For purposes of this subsection, the term “personal service corporation” has the meaning given such term by section 269A(b)(1), except that section 269A(b)(2) shall be applied—
(A) by substituting “any” for “more than 10 percent”, and
(B) by substituting “any” for “50 percent or more in value” in section 318(a)(2)(C).
A corporation shall not be treated as a personal service corporation unless more than 10 percent of the stock (by value) in such corporation is held by employee-owners (within the meaning of section 269A(b)(2), as modified by the preceding sentence). If a corporation is a member of an affiliated group filing a consolidated return, all members of such group shall be taken into account in determining whether such corporation is a personal service corporation.
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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
**(a) Allowance of credit**
(1) **In general** — In the case of an individual for which there are 1 or more qualifying individuals (as defined in subsection (b)(1)) with respect to such individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the applicable percentage of the employment-related expenses (as defined in subsection (b)(2)) paid by such individual during the taxable year.
(2) **Applicable percentage defined** — For purposes of paragraph (1), the term “applicable percentage” means 50 percent—
(A) reduced (but not below 35 percent) by 1 percentage point for each $2,000 or fraction thereof by which the taxpayer’s adjusted gross income for the taxable year exceeds $15,000, and
(B) further reduced (but not below 20 percent) by 1 percentage point for each $2,000 ($4,000 in the case of a joint return) or fraction thereof by which the taxpayer’s adjusted gross income for the taxable year exceeds $75,000 ($150,000 in the case of a joint return).
**(b) Definitions of qualifying individual and employment-related expenses** For purposes of this section—
(1) **Qualifying individual** — The term “qualifying individual” means—
(A) a dependent of the taxpayer (as defined in section 152(a)(1)) who has not attained age 13,
(B) a dependent of the taxpayer (as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B)) who is physically or mentally incapable of caring for himself or herself and who has the same principal place of abode as the taxpayer for more than one-half of such taxable year, or
(C) the spouse of the taxpayer, if the spouse is physically or mentally incapable of caring for himself or herself and who has the same principal place of abod
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Dividends from 10-percent owned foreign corporations**
(1) **In general** — In the case of dividends received by a corporation from a qualified 10-percent owned foreign corporation, there shall be allowed as a deduction an amount equal to the percent (specified in section 243 for the taxable year) of the U.S.-source portion of such dividends.
(2) **Qualified 10-percent owned foreign corporation** — For purposes of this subsection, the term “qualified 10-percent owned foreign corporation” means any foreign corporation (other than a passive foreign investment company) if at least 10 percent of the stock of such corporation (by vote and value) is owned by the taxpayer.
(3) **U.S.-source portion** — For purposes of this subsection, the U.S.-source portion of any dividend is an amount which bears the same ratio to such dividend as—
(A) the post-1986 undistributed U.S. earnings, bears to
(B) the total post-1986 undistributed earnings.
(4) **Post-1986 undistributed earnings** — The term “post-1986 undistributed earnings” means the amount of the earnings and profits of the foreign corporation (computed in accordance with sections 964(a) and 986) accumulated in taxable years beginning after December 31, 1986—
(A) as of the close of the taxable year of the foreign corporation in which the dividend is distributed, and
(B) without diminution by reason of dividends distributed during such taxable year.
(5) **Post-1986 undistributed U.S. earnings** — For purposes of this subsection, the term “post-1986 undistributed U.S. earnings” means the portion of the post-1986 undistributed earnings which is attributable to—
(A) income of the qualified 10-percent owned foreign corporation which is effectively connected with the conduct of a trade or business within the
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Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** For purposes of this subtitle, the taxable year of an S corporation shall be a permitted year.
**(b) Permitted year defined** For purposes of this section, the term “permitted year” means a taxable year which—
(1) is a year ending December 31, or
(2) is any other accounting period for which the corporation establishes a business purpose to the satisfaction of the Secretary.
For purposes of paragraph (2), any deferral of income to shareholders shall not be treated as a business purpose.
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Federal law — U.S. Code and appendices · legal_authorities
**(a) In general** If—
(1) any person or persons acquire, directly or indirectly, control of a corporation, or
(2) any corporation acquires, directly or indirectly, property of another corporation, not controlled, directly or indirectly, immediately before such acquisition, by such acquiring corporation or its stockholders, the basis of which property, in the hands of the acquiring corporation, is determined by reference to the basis in the hands of the transferor corporation,
and the principal purpose for which such acquisition was made is evasion or avoidance of Federal income tax by securing the benefit of a deduction, credit, or other allowance which such person or corporation would not otherwise enjoy, then the Secretary may disallow such deduction, credit, or other allowance. For purposes of paragraphs (1) and (2), control means the ownership of stock possessing at least 50 percent of the total combined voting power of all classes of stock entitled to vote or at least 50 percent of the total value of shares of all classes of stock of the corporation.
**(b) Certain liquidations after qualified stock purchases**
(1) **In general** — If—
(A) there is a qualified stock purchase by a corporation of another corporation,
(B) an election is not made under section 338 with respect to such purchase,
(C) the acquired corporation is liquidated pursuant to a plan of liquidation adopted not more than 2 years after the acquisition date, and
(D) the principal purpose for such liquidation is the evasion or avoidance of Federal income tax by securing the benefit of a deduction, credit, or other allowance which the acquiring corporation would not otherwise enjoy,
then the Secretary may disallow such deduction, credit, or other allowance.
(2) **Meaning of terms** —
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Federal law — U.S. Code and appendices · legal_authorities
Page 1547
TITLE 26—INTERNAL REVENUE CODE
§ 441
‘‘(II) ending on the date described in clause (i)(II)
(or, if earlier, the date the plan or contract amend-
ment is adopted),
the plan or contract is operated as if such plan or
contract amendment were in effect, and such plan or
contract amendment applies retroactively for such
period.
‘‘(C) ANTI-CUTBACK RELIEF.—A plan shall not be treat-
ed as failing to meet the requirements of section 204(g)
of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1054(g)) and section 411(d)(6) of the Inter-
nal Revenue Code of 1986 [26 U.S.C. 411(d)(6)] solely by
reason of a plan amendment to which this paragraph
applies.’’
TEMPORARY MODIFICATION OF APPLICATION OF
LIMITATION ON BENEFIT ACCRUALS
Pub. L. 111–192, title II, § 203(b), June 25, 2010, 124 Stat.
1300, provided that: ‘‘Section 203 of the Worker, Retiree,
and Employer Recovery Act of 2008 [Pub. L. 110–458, set
out below] shall apply to a plan for any plan year in
lieu of the amendments made by this section applying
to sections 206(g)(4) of the Employee Retirement In-
come Security Act of 1974 [29 U.S.C. 1056(g)(4)] and
436(e) of the Internal Revenue Code of 1986 only to the
extent that such section produces a higher adjusted
funding target attainment percentage for such plan for
such year.’’
Pub. L. 110–458, title II, § 203, Dec. 23, 2008, 122 Stat.
5118, provided that: ‘‘In the case of the first plan year
beginning during the period beginning on October 1,
2008, and ending on September 30, 2009, sections
206(g)(4)(A) of the Employee Retirement Income Secu-
rity Act of 1974 (29 U.S.C. 1056(g)(4)(A)) and 436(e)(1) of
the Internal Revenue Code of 1986 shall be applied by
substituting the plan’s adjusted funding target attain-
ment percentage fo
Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 441
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