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26 U.S.C. § 591 — Deduction for dividends paid on deposits
Federal law — U.S. Code and appendices · legal_authorities
**(a) In general** In the case of mutual savings banks, cooperative banks, domestic building and loan associations, and other savings institutions chartered and supervised as savings and loan or similar associations under Federal or State law, there shall be allowed as deductions in computing taxable income amounts paid to, or credited to the accounts of, depositors or holders of accounts as dividends or interest on their deposits or withdrawable accounts, if such amounts paid or credited are withdrawable on demand subject only to customary notice of intention to withdraw.
**(b) Mutual savings bank to include certain banks with capital stock** For purposes of this part, the term “mutual savings bank” includes any bank—
(1) which has capital stock represented by shares, and
(2) which is subject to, and operates under, Federal or State laws relating to mutual savings bank.
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Source file: Laws/federal/codes/united-states-code/title-26/section-591-deduction-for-dividends-paid-on-deposits--51eec53656.md
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Source location: Title 26, Chapter 1, § 591; chapter-001-normal-taxes-and-surtaxes.md
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**(a) In general** In the case of mutual savings banks, cooperative banks, domestic building and loan associations, and other savings institutions chartered and supervised as savings and loan or similar associations under Federal or State law, there shall be allowed as deductions in computing taxable income amounts paid to, or credited to the accounts of, depositors or holders of accounts as dividends or interest on their deposits or withdrawable accounts, if such amounts paid or credited are withdrawable on demand subject only to customary notice of intention to withdraw.
**(b) Mutual savings bank to include certain banks with capital stock** For purposes of this part, the term “mutual savings bank” includes any bank—
(1) which has capital stock represented by shares, and
(2) which is subject to, and operates under, Federal or State laws relating to mutual savings bank.
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Reserve for bad debts**
(1) **In general** — Except as provided in paragraph (2), in the case of—
(A) any domestic building and loan association,
(B) any mutual savings bank, or
(C) any cooperative bank without capital stock organized and operated for mutual purposes and without profit,
there shall be allowed a deduction for a reasonable addition to a reserve for bad debts. Such deduction shall be in lieu of any deduction under section 166(a).
(2) **Organization must meet 60-percent asset test of section 7701(a)(19)** — This section shall apply to an association or bank referred to in paragraph (1) only if it meets the requirements of section 7701(a)(19)(C).
**(b) Addition to reserves for bad debts**
(1) **In general** — For purposes of subsection (a), the reasonable addition for the taxable year to the reserve for bad debts of any taxpayer described in subsection (a) shall be an amount equal to the sum of—
(A) the amount determined to be a reasonable addition to the reserve for losses on nonqualifying loans, computed in the same manner as is provided with respect to additions to the reserves for losses on loans of banks under section 585(b)(2), plus
(B) the amount determined by the taxpayer to be a reasonable addition to the reserve for losses on qualifying real property loans, but such amount shall not exceed the amount determined under paragraph (2) or (3), whichever is the larger, but the amount determined under this subparagraph shall in no case be greater than the larger of—
(i) the amount determined under paragraph (3), or
(ii) the amount which, when added to the amount determined under subparagraph (A), equals the amount by which 12 percent of the total deposits or withdrawable accounts of depositors of the taxpayer at the cl
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 593
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Federal law — U.S. Code and appendices · legal_authorities
Page 1784
TITLE 26—INTERNAL REVENUE CODE
§ 591
§ 591. Deduction for dividends paid on deposits
(a) In general
In the case of mutual savings banks, coopera-
tive banks, domestic building and loan associa-
tions, and other savings institutions chartered
and supervised as savings and loan or similar as-
sociations under Federal or State law, there
shall be allowed as deductions in computing tax-
able income amounts paid to, or credited to the
accounts of, depositors or holders of accounts as
dividends or interest on their deposits or
withdrawable accounts, if such amounts paid or
credited are withdrawable on demand subject
only to customary notice of intention to with-
draw.
(b) Mutual savings bank to include certain banks
with capital stock
For purposes of this part, the term ‘‘mutual
savings bank’’ includes any bank—
(1) which has capital stock represented by
shares, and
(2) which is subject to, and operates under,
Federal or State laws relating to mutual sav-
ings bank.
(Aug. 16, 1954, ch. 736, 68A Stat. 204; Pub. L.
87–834, § 6(f), Oct. 16, 1962, 76 Stat. 984; Pub. L.
97–34, title II, § 245(a), Aug. 13, 1981, 95 Stat. 255.)
Editorial Notes
AMENDMENTS
1981—Pub. L. 97–34 designated existing provisions as
subsec. (a), inserted heading ‘‘In general’’, and added
subsec. (b).
1962—Pub. L. 87–834 included other savings institu-
tions chartered and supervised as savings and loan or
similar associations under Federal or State law, and
authorized amounts paid as interest as a deduction.
Statutory Notes and Related Subsidiaries
EFFECTIVE DATE OF 1981 AMENDMENT
Pub. L. 97–34, title II, § 246(d), Aug. 13, 1981, 95 Stat.
256, provided that: ‘‘The amendments made by section
245 [amending this section and section 593 of this title]
shall apply with respe
Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 591
Stored review status: historical_2024_not_currentness_verified. Same stored citation; legal effect and authority still require review.