Browse Arkansas Code titles and sections
26 U.S.C. § 245 — Dividends received from certain foreign corporations
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
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 245
Stored review status: release_metadata_unconfirmed. A text match is a research starting point; applicability is not established.
Original supplied file — preserved unchanged
Download original Markdown file
File SHA-256: 05ba9556056e4042f379310305bb4eadcb56a2433e3ae60101e8c282329ef512. The original may include catalog metadata, neighboring provisions, or embedded records outside this collection's scope. Search shows only the selected federal record. Historical editions and unverified snapshots are not a statement of current law.
Authority boundary: historical or unconfirmed source not current law verified.
Open the recorded source website ↗
Record provenance
Stable record: federal_law:legal_authorities:record_usc_a1a82d1769cdf8a2e3436468
Source file: Laws/federal/codes/united-states-code/title-26/section-245-dividends-received-from-certain-foreign-corporations--4a1e47b1cb.md
Pages: Not recorded – Not recorded
Passage SHA-256: 09fd06f46ab845a536f668f8de50b5d4be9d0c9ed5cdcb80f9ca2d01ef139dfd
Source location: Title 26, Chapter 1, § 245; chapter-001-normal-taxes-and-surtaxes.md
Stored source content
**(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 United States and subject to tax under this chapter, or
(B) any dividend received (directly or through a wholly owned foreign corporation) from a domestic corporation at least 80 percent of the stock of which (by vote and value) is owned (directly or through such wholly owned foreign corporation) by the qualified 10-percent owned foreign corporation.
(6) **Special rule** — If the 1st day on which the requirements of paragraph (2) are met with respect to any foreign corporation is in a taxable year of such corporation beginning after December 31, 1986, the post-1986 undistributed earnings and the post-1986 undistributed U.S. earnings of such corporation shall be determined by only taking into account periods beginning on and after the 1st day of the 1st taxable year in which such requirements are met.
(7) **Coordination with subsection (b)** — Earnings and profits of any qualified 10-percent owned foreign corporation for any taxable year shall not be taken into account under this subsection if the deduction provided by subsection (b) would be allowable with respect to dividends paid out of such earnings and profits.
(8) **Disallowance of foreign tax credit** — No credit shall be allowed under section 901 for any taxes paid or accrued (or treated as paid or accrued) with respect to the United States-source portion of any dividend received by a corporation from a qualified 10-percent-owned foreign corporation.
(9) **Coordination with section 904** — For purposes of section 904, the U.S.-source portion of any dividend received by a corporation from a qualified 10-percent owned foreign corporation shall be treated as from sources in the United States.
(10) **Coordination with treaties** — If—
(A) any portion of a dividend received by a corporation from a qualified 10-percent-owned foreign corporation would be treated as from sources in the United States under paragraph (9),
(B) under a treaty obligation of the United States (applied without regard to this subsection), such portion would be treated as arising from sources outside the United States, and
(C) the taxpayer chooses the benefits of this paragraph,
this subsection shall not apply to such dividend (but subsections (a), (b), and (c) of section 904 and sections 907 and 960 shall be applied separately with respect to such portion of such dividend).
(11) **Coordination with section 1248** — For purposes of this subsection, the term “dividend” does not include any amount treated as a dividend under section 1248.
(12) **Dividends derived from RICs and REITs ineligible for deduction** — Regulated investment companies and real estate investment trusts shall not be treated as domestic corporations for purposes of paragraph (5)(B).
**(b) Certain dividends received from wholly owned foreign subsidiaries**
(1) **In general** — In the case of dividends described in paragraph (2) received from a foreign corporation by a domestic corporation which, for its taxable year in which such dividends are received, owns (directly or indirectly) all of the outstanding stock of such foreign corporation, there shall be allowed as a deduction (in lieu of the deduction provided by subsection (a)) an amount equal to 100 percent of such dividends.
(2) **Eligible dividends** — Paragraph (1) shall apply only to dividends which are paid out of the earnings and profits of a foreign corporation for a taxable year during which—
(A) all of its outstanding stock is owned (directly or indirectly) by the domestic corporation to which such dividends are paid; and
(B) all of its gross income from all sources is effectively connected with the conduct of a trade or business within the United States.
(3) **Exception** — Paragraph (1) shall not apply to any dividends if an election under section 1562 is effective for either—
(A) the taxable year of the domestic corporation in which such dividends are received, or
(B) the taxable year of the foreign corporation out of the earnings and profits of which such dividends are paid.
**(c) Certain dividends received from FSC**
(1) **In general** — In the case of a domestic corporation, there shall be allowed as a deduction an amount equal to—
(A) 100 percent of any dividend received from another corporation which is distributed out of earnings and profits attributable to foreign trade income for a period during which such other corporation was a FSC, and
(B) 50 percent (65 percent in the case of dividends from a 20-percent owned corporation as defined in section 243(c)(2)) of any dividend received from another corporation which is distributed out of earnings and profits attributable to effectively connected income received or accrued by such other corporation while such other corporation was a FSC.
(2) **Exception for certain dividends** — Paragraph (1) shall not apply to any dividend which is distributed out of earnings and profits attributable to foreign trade income which—
(A) is section 923(a)(2) nonexempt income (within the meaning of section 927(d)(6)), or
(B) would not, but for section 923(a)(4), be treated as exempt foreign trade income.
(3) **No deduction under subsection (a) or (b)** — No deduction shall be allowable under subsection (a) or (b) with respect to any dividend which is distributed out of earnings and profits of a corporation accumulated while such corporation was a FSC.
(4) **Definitions** — For purposes of this subsection—
(A) *Foreign trade income; exempt foreign trade income* — The terms “foreign trade income” and “exempt foreign trade income” have the respective meanings given such terms by section 923.
(B) *Effectively connected income* — The term “effectively connected income” means any income which is effectively connected (or treated as effectively connected) with the conduct of a trade or business in the United States and is subject to tax under this chapter. Such term shall not include any foreign trade income.
(C) *FSC* — The term “FSC” has the meaning given such term by section 922.
(5) **References to prior law** — Any reference in this subsection to section 922, 923, or 927 shall be treated as a reference to such section as in effect before its repeal by the FSC Repeal and Extraterritorial Income Exclusion Act of 2000.
Cross-references
Connections may be documented source relationships, shared citations or nearby passages. Each explains its basis; a connection alone does not establish applicability to your situation.
Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** In the case of a corporation, there shall be allowed as a deduction an amount equal to the following percentages of the amount received as dividends from a domestic corporation which is subject to taxation under this chapter:
(1) 50 percent, in the case of dividends other than dividends described in paragraph (2) or (3);
(2) 100 percent, in the case of dividends received by a small business investment company operating under the Small Business Investment Act of 1958 ([15 U.S.C. 661](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section661&num=0&edition=prelim) and following); and
(3) 100 percent, in the case of qualifying dividends (as defined in subsection (b)(1)).
**(b) Qualifying dividends**
(1) **In general** — For purposes of this section, the term “qualifying dividend” means any dividend received by a corporation—
(A) if at the close of the day on which such dividend is received, such corporation is a member of the same affiliated group as the corporation distributing such dividend, and
(B) if such dividend is distributed out of the earnings and profits of a taxable year of the distributing corporation which ends after December 31, 1963, and on each day of which the distributing corporation and the corporation receiving the dividend were members of such affiliated group.
(2) **Affiliated group** — For purposes of this subsection:
(A) *In general* — The term “affiliated group” has the meaning given such term by section 1504(a), except that for such purposes sections 1504(b)(2) and 1504(c) shall not apply.
(B) *Group must be consistent in foreign tax treatment* — The requirements of paragraph (1)(A) shall not be treated as being met with respect to any dividend received by a corporation if, for any taxabl
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 243
Stored review status: release_metadata_unconfirmed. Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
**(a) In general** Except as otherwise provided in this chapter, a distribution of property (as defined in section 317(a)) made by a corporation to a shareholder with respect to its stock shall be treated in the manner provided in subsection (c).
**(b) Amount distributed**
(1) **General rule** — For purposes of this section, the amount of any distribution shall be the amount of money received, plus the fair market value of the other property received.
(2) **Reduction for liabilities** — The amount of any distribution determined under paragraph (1) shall be reduced (but not below zero) by—
(A) the amount of any liability of the corporation assumed by the shareholder in connection with the distribution, and
(B) the amount of any liability to which the property received by the shareholder is subject immediately before, and immediately after, the distribution.
(3) **Determination of fair market value** — For purposes of this section, fair market value shall be determined as of the date of the distribution.
**(c) Amount taxable** In the case of a distribution to which subsection (a) applies—
(1) **Amount constituting dividend** — That portion of the distribution which is a dividend (as defined in section 316) shall be included in gross income.
(2) **Amount applied against basis** — That portion of the distribution which is not a dividend shall be applied against and reduce the adjusted basis of the stock.
(3) **Amount in excess of basis**
(A) *In general* — Except as provided in subparagraph (B), that portion of the distribution which is not a dividend, to the extent that it exceeds the adjusted basis of the stock, shall be treated as gain from the sale or exchange of property.
(B) *Distributions out of increase in value accrued before March 1, 1913* — Th
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 301
Stored review status: release_metadata_unconfirmed. Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
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
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 441
Stored review status: release_metadata_unconfirmed. Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
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
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 1
Stored review status: release_metadata_unconfirmed. Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
**(a) Energy credit**
(1) **In general** — For purposes of section 46, except as provided in paragraphs (1)(B), (2)(B), and (3)(B) of subsection (c), the energy credit for any taxable year is the energy percentage of the basis of each energy property placed in service during such taxable year.
(2) **Energy percentage**
(A) *In general* — Except as provided in paragraphs (6) and (7), the energy percentage is—
(i) 6 percent in the case of—
(I) qualified fuel cell property,
(II) energy property described in clause (i) or (iii) of paragraph (3)(A) but only with respect to property the construction of which begins before January 1, 2025,
(III) energy property described in paragraph (3)(A)(ii),
(IV) qualified small wind energy property,
(V) waste energy recovery property,
(VI) energy storage technology,
(VII) qualified biogas property,
(VIII) microgrid controllers, and
(IX) energy property described in clauses (v) and (vii) of paragraph (3)(A), and
(ii) in the case of any energy property to which clause (i) does not apply, 0 percent.
(B) *Coordination with rehabilitation credit* — The energy percentage shall not apply to that portion of the basis of any property which is attributable to qualified rehabilitation expenditures.
(C) *Nonapplication of increases to energy percentage* — For purposes of energy property described in subparagraph (A)(ii), the energy percentage applicable to such property pursuant to such subparagraph shall not be increased or otherwise adjusted by any provision of this section.
(3) **Energy property** — For purposes of this subpart, the term “energy property” means any property—
(A) which is—
(i) equipment which uses solar energy to generate electricity, to he
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 48
Stored review status: release_metadata_unconfirmed. Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
**(a) Corporations in general** A tax is hereby imposed for each taxable year on the taxable income of every corporation.
**(b) Amount of tax** The amount of the tax imposed by subsection (a) shall be 21 percent of taxable income.
**(c) Exceptions** Subsection (a) shall not apply to a corporation subject to a tax imposed by—
(1) section 594 (relating to mutual savings banks conducting life insurance business),
(2) subchapter L (sec. 801 and following, relating to insurance companies), or
(3) subchapter M (sec. 851 and following, relating to regulated investment companies and real estate investment trusts).
**(d) Foreign corporations** In the case of a foreign corporation, the taxes imposed by subsection (a) and section 55 shall apply only as provided by section 882.
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 11
Stored review status: release_metadata_unconfirmed. Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
**(a) Requirements for qualification** A trust created or organized in the United States and forming part of a stock bonus, pension, or profit-sharing plan of an employer for the exclusive benefit of his employees or their beneficiaries shall constitute a qualified trust under this section—
(1) if contributions are made to the trust by such employer, or employees, or both, or by another employer who is entitled to deduct his contributions under section 404(a)(3)(B) (relating to deduction for contributions to profit-sharing and stock bonus plans), or by a charitable remainder trust pursuant to a qualified gratuitous transfer (as defined in section 664(g)(1)), for the purpose of distributing to such employees or their beneficiaries the corpus and income of the fund accumulated by the trust in accordance with such plan;
(2) if under the trust instrument it is impossible, at any time prior to the satisfaction of all liabilities with respect to employees and their beneficiaries under the trust, for any part of the corpus or income to be (within the taxable year or thereafter) used for, or diverted to, purposes other than for the exclusive benefit of his employees or their beneficiaries (but this paragraph shall not be construed, in the case of a multiemployer plan, to prohibit the return of a contribution within 6 months after the plan administrator determines that the contribution was made by a mistake of fact or law (other than a mistake relating to whether the plan is described in section 401(a) or the trust which is part of such plan is exempt from taxation under section 501(a), or the return of any withdrawal liability payment determined to be an overpayment within 6 months of such determination));
(3) if the plan of which such trust is a part satisfies the requireme
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 401
Stored review status: release_metadata_unconfirmed. Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
**(a) Rules for actual distributions and certain deemed distributions**
(1) **In general** — Any actual distribution (other than a distribution described in paragraph (2) or to which section 995(c) applies) to a shareholder by a DISC (or former DISC) which is made out of earnings and profits shall be treated as made—
(A) first, out of previously taxed income, to the extent thereof,
(B) second, out of accumulated DISC income, to the extent thereof, and
(C) finally, out of other earnings and profits.
(2) **Qualifying distributions** — Any actual distribution made pursuant to section 992(c) (relating to distributions to meet qualification requirements), and any deemed distribution pursuant to section 995(b)(1)(G) (relating to foreign investment attributable to producer’s loans), shall be treated as made—
(A) first, out of accumulated DISC income, to the extent thereof,
(B) second, out of the earnings and profits described in paragraph (1)(C), to the extent thereof, and
(C) finally, out of previously taxed income.
In the case of any amount of any actual distribution to a C corporation made pursuant to section 992(c) which is required to satisfy the condition of section 992(a)(1)(A), the preceding sentence shall apply to 16/17ths of such amount and paragraph (1) shall apply to the remaining 1/17th of such amount.
(3) **Exclusion from gross income** — Amounts distributed out of previously taxed income shall be excluded by the distributee from gross income except for gains described in subsection (e)(2), and shall reduce the amount of the previously taxed income.
**(b) Ordering rules for losses** If for any taxable year a DISC, or a former DISC, incurs a deficit in earnings and profits, such deficit shall be chargeable—
(1) first, to earnings and profi
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 996
Stored review status: release_metadata_unconfirmed. Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
If a domestic corporation chooses to have the benefits of subpart A of part III of subchapter N (relating to foreign tax credit) for any taxable year, an amount equal to the taxes deemed to be paid by such corporation under subsections (a) and (d) of section 960 (determined without regard to the phrase “90 percent of” in subsection (d)(1) thereof) for such taxable year shall be treated for purposes of this title (other than sections 245 and 245A) as a dividend received by such domestic corporation from the foreign corporation.
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 78
Stored review status: release_metadata_unconfirmed. Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** If—
(1) a United States person sells or exchanges stock in a foreign corporation, and
(2) such person owns, within the meaning of section 958(a), or is considered as owning by applying the rules of ownership of section 958(b), 10 percent or more of the total combined voting power of all classes of stock entitled to vote of such foreign corporation at any time during the 5-year period ending on the date of the sale or exchange when such foreign corporation was a controlled foreign corporation (as defined in section 957),
then the gain recognized on the sale or exchange of such stock shall be included in the gross income of such person as a dividend, to the extent of the earnings and profits of the foreign corporation attributable (under regulations prescribed by the Secretary) to such stock which were accumulated in taxable years of such foreign corporation beginning after December 31, 1962, and during the period or periods the stock sold or exchanged was held by such person while such foreign corporation was a controlled foreign corporation. For purposes of this section, a United States person shall be treated as having sold or exchanged any stock if, under any provision of this subtitle, such person is treated as realizing gain from the sale or exchange of such stock.
**(b) Limitation on tax applicable to individuals** In the case of an individual, if the stock sold or exchanged is a capital asset (within the meaning of section 1221) and has been held for more than 1 year, the tax attributable to an amount included in gross income as a dividend under subsection (a) shall not be greater than a tax equal to the sum of—
(1) a pro rata share of the excess of—
(A) the taxes that would have been paid by the foreign corporation with respect to its
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 1248
Stored review status: release_metadata_unconfirmed. Incoming connection: Explicit cross-reference supplied in source Markdown; currentness and applicability require review.