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26 U.S.C. § 537 — Reasonable needs of the business
Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** For purposes of this part, the term “reasonable needs of the business” includes—
(1) the reasonably anticipated needs of the business,
(2) the section 303 redemption needs of the business, and
(3) the excess business holdings redemption needs of the business.
**(b) Special rules** For purposes of subsection (a)—
(1) **Section 303 redemption needs** — The term “section 303 redemption needs” means, with respect to the taxable year of the corporation in which a shareholder of the corporation died or any taxable year thereafter, the amount needed (or reasonably anticipated to be needed) to make a redemption of stock included in the gross estate of the decedent (but not in excess of the maximum amount of stock to which section 303(a) may apply).
(2) **Excess business holdings redemption needs** — The term “excess business holdings redemption needs” means the amount needed (or reasonably anticipated to be needed) to redeem from a private foundation stock which—
(A) such foundation held on May 26, 1969 (or which was received by such foundation pursuant to a will or irrevocable trust to which section 4943(c)(5) applies), and
(B) constituted excess business holdings on May 26, 1969, or would have constituted excess business holdings as of such date if there were taken into account (i) stock received pursuant to a will or trust described in subparagraph (A), and (ii) the reduction in the total outstanding stock of the corporation which would have resulted solely from the redemption of stock held by the private foundation.
(3) **Obligations incurred to make redemptions** — In applying paragraphs (1) and (2), the discharge of any obligation incurred to make a redemption described in such paragraphs shall be treated as the making of such redemption.
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Source location: Title 26, Chapter 1, § 537; chapter-001-normal-taxes-and-surtaxes.md
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**(a) General rule** For purposes of this part, the term “reasonable needs of the business” includes—
(1) the reasonably anticipated needs of the business,
(2) the section 303 redemption needs of the business, and
(3) the excess business holdings redemption needs of the business.
**(b) Special rules** For purposes of subsection (a)—
(1) **Section 303 redemption needs** — The term “section 303 redemption needs” means, with respect to the taxable year of the corporation in which a shareholder of the corporation died or any taxable year thereafter, the amount needed (or reasonably anticipated to be needed) to make a redemption of stock included in the gross estate of the decedent (but not in excess of the maximum amount of stock to which section 303(a) may apply).
(2) **Excess business holdings redemption needs** — The term “excess business holdings redemption needs” means the amount needed (or reasonably anticipated to be needed) to redeem from a private foundation stock which—
(A) such foundation held on May 26, 1969 (or which was received by such foundation pursuant to a will or irrevocable trust to which section 4943(c)(5) applies), and
(B) constituted excess business holdings on May 26, 1969, or would have constituted excess business holdings as of such date if there were taken into account (i) stock received pursuant to a will or trust described in subparagraph (A), and (ii) the reduction in the total outstanding stock of the corporation which would have resulted solely from the redemption of stock held by the private foundation.
(3) **Obligations incurred to make redemptions** — In applying paragraphs (1) and (2), the discharge of any obligation incurred to make a redemption described in such paragraphs shall be treated as the making of such redemption.
(4) **Product liability loss reserves** — The accumulation of reasonable amounts for the payment of reasonably anticipated product liability losses (as defined in section 172(f) (as in effect before the date of enactment of the Tax Cuts and Jobs Act)), as determined under regulations prescribed by the Secretary, shall be treated as accumulated for the reasonably anticipated needs of the business.
(5) **No inference as to prior taxable years** — The application of this part to any taxable year before the first taxable year specified in paragraph (1) shall be made without regard to the fact that distributions in redemption coming within the terms of such paragraphs were subsequently made.
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Deduction allowed** There shall be allowed as a deduction for the taxable year an amount equal to—
(1) in the case of a taxable year beginning before January 1, 2021, the aggregate of the net operating loss carryovers to such year, plus the net operating loss carrybacks to such year, and
(2) in the case of a taxable year beginning after December 31, 2020, the sum of—
(A) the aggregate amount of net operating losses arising in taxable years beginning before January 1, 2018, carried to such taxable year, plus
(B) the lesser of—
(i) the aggregate amount of net operating losses arising in taxable years beginning after December 31, 2017, carried to such taxable year, or
(ii) 80 percent of the excess (if any) of—
(I) taxable income computed without regard to the deductions under this section and sections 199A and 250, over
(II) the amount determined under subparagraph (A).
For purposes of this subtitle, the term “net operating loss deduction” means the deduction allowed by this subsection.
**(b) Net operating loss carrybacks and carryovers**
(1) **Years to which loss may be carried**
(A) *General rule* — A net operating loss for any taxable year—
(i) shall be a net operating loss carryback to the extent provided in subparagraphs (B), (C)(i), and (D), and
(ii) except as provided in subparagraph (C)(ii), shall be a net operating loss carryover—
(I) in the case of a net operating loss arising in a taxable year beginning before January 1, 2018, to each of the 20 taxable years following the taxable year of the loss, and
(II) in the case of a net operating loss arising in a taxable year beginning after December 31, 2017, to each taxable year following the taxable year of the loss.
(B) *Farming losses*
(i) *I
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Definition of surviving spouse**
(1) **In general** — For purposes of section 1, the term “surviving spouse” means a taxpayer—
(A) whose spouse died during either of his two taxable years immediately preceding the taxable year, and
(B) who maintains as his home a household which constitutes for the taxable year the principal place of abode (as a member of such household) of a dependent (i) who (within the meaning of section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof) is a son, stepson, daughter, or stepdaughter of the taxpayer, and (ii) with respect to whom the taxpayer is entitled to a deduction for the taxable year under section 151.
(2) **Limitations** — Notwithstanding paragraph (1), for purposes of section 1 a taxpayer shall not be considered to be a surviving spouse—
(A) if the taxpayer has remarried at any time before the close of the taxable year, or
(B) unless, for the taxpayer’s taxable year during which his spouse died, a joint return could have been made under the provisions of section 6013 (without regard to subsection (a)(3) thereof).
(3) **Special rule where deceased spouse was in missing status** — If an individual was in a missing status (within the meaning of section 6013(f)(3)) as a result of service in a combat zone (as determined for purposes of section 112) and if such individual remains in such status until the date referred to in subparagraph (A) or (B), then, for purposes of paragraph (1)(A), the date on which such individual died shall be treated as the earlier of the date determined under subparagraph (A) or the date determined under subparagraph (B):
(A) the date on which the determination is made under [section 556 of title 37](https://uscode.house.gov/view.xhtml?req=granuleid:
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Federal law — U.S. Code and appendices · legal_authorities
Page 1754
TITLE 26—INTERNAL REVENUE CODE
§ 536
amendment shall not be required to be made before the
first plan year beginning on or after Jan. 1, 1989, see
section 1140 of Pub. L. 99–514, as amended, set out as a
note under section 401 of this title.
§ 536. Income not placed on annual basis
Section 443(b) (relating to computation of tax
on change of annual accounting period) shall not
apply in the computation of the accumulated
earnings tax imposed by section 531.
(Aug. 16, 1954, ch. 736, 68A Stat. 182.)
§ 537. Reasonable needs of the business
(a) General rule
For purposes of this part, the term ‘‘reason-
able needs of the business’’ includes—
(1) the reasonably anticipated needs of the
business,
(2) the section 303 redemption needs of the
business, and
(3) the excess business holdings redemption
needs of the business.
(b) Special rules
For purposes of subsection (a)—
(1) Section 303 redemption needs
The term ‘‘section 303 redemption needs’’
means, with respect to the taxable year of the
corporation in which a shareholder of the cor-
poration died or any taxable year thereafter,
the amount needed (or reasonably anticipated
to be needed) to make a redemption of stock
included in the gross estate of the decedent
(but not in excess of the maximum amount of
stock to which section 303(a) may apply).
(2) Excess business holdings redemption needs
The term ‘‘excess business holdings redemp-
tion needs’’ means the amount needed (or rea-
sonably anticipated to be needed) to redeem
from a private foundation stock which—
(A) such foundation held on May 26, 1969
(or which was received by such foundation
pursuant to a will or irrevocable trust to
which section 4943(c)(5) applies), and
(B) constituted excess business holdings on
May 26, 1969, or wou
Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 537
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