Browse Arkansas Code titles and sections

26 U.S.C. § 1368 — Distributions

Federal law — U.S. Code and appendices · legal_authorities

26 U.S.C. § 1368 — Distributions

Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 1368

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: 8159e83804e54301c51abbb199de140bbf933e8d802234566954bfd9dfb92d6f. 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_cdc4bf4d0a783644fd530511
Source file: Laws/federal/codes/united-states-code/title-26/section-1368-distributions--70d43366b7.md
Pages: Not recorded – Not recorded
Passage SHA-256: 12d9846891ef0e1b08a882f0ea0c11341e000c7531755e623c74a662d2a9dcb0

Source location: Title 26, Chapter 1, § 1368; chapter-001-normal-taxes-and-surtaxes.md

Stored source content

**(a) General rule** A distribution of property made by an S corporation with respect to its stock to which (but for this subsection) section 301(c) would apply shall be treated in the manner provided in subsection (b) or (c), whichever applies. **(b) S corporation having no earnings and profits** In the case of a distribution described in subsection (a) by an S corporation which has no accumulated earnings and profits— (1) **Amount applied against basis** — The distribution shall not be included in gross income to the extent that it does not exceed the adjusted basis of the stock. (2) **Amount in excess of basis** — If the amount of the distribution exceeds the adjusted basis of the stock, such excess shall be treated as gain from the sale or exchange of property. **(c) S corporation having earnings and profits** In the case of a distribution described in subsection (a) by an S corporation which has accumulated earnings and profits— (1) **Accumulated adjustments account** — That portion of the distribution which does not exceed the accumulated adjustments account shall be treated in the manner provided by subsection (b). (2) **Dividend** — That portion of the distribution which remains after the application of paragraph (1) shall be treated as a dividend to the extent it does not exceed the accumulated earnings and profits of the S corporation. (3) **Treatment of remainder** — Any portion of the distribution remaining after the application of paragraph (2) of this subsection shall be treated in the manner provided by subsection (b). Except to the extent provided in regulations, if the distributions during the taxable year exceed the amount in the accumulated adjustments account at the close of the taxable year, for purposes of this subsection, the balance of such account shall be allocated among such distributions in proportion to their respective sizes. **(d) Certain adjustments taken into account** Subsections (b) and (c) shall be applied by taking into account (to the extent proper)— (1) the adjustments to the basis of the shareholder’s stock described in section 1367, and (2) the adjustments to the accumulated adjustments account which are required by subsection (e)(1). In the case of any distribution made during any taxable year, the adjusted basis of the stock shall be determined with regard to the adjustments provided in paragraph (1) of section 1367(a) for the taxable year. **(e) Definitions and special rules** For purposes of this section— (1) **Accumulated adjustments account** (A) *In general* — Except as otherwise provided in this paragraph, the term “accumulated adjustments account” means an account of the S corporation which is adjusted for the S period in a manner similar to the adjustments under section 1367 (except that no adjustment shall be made for income (and related expenses) which is exempt from tax under this title and the phrase “(but not below zero)” shall be disregarded in section 1367(a)(2)) and no adjustment shall be made for Federal taxes attributable to any taxable year in which the corporation was a C corporation. (B) *Amount of adjustment in the case of redemptions* — In the case of any redemption which is treated as an exchange under section 302(a) or 303(a), the adjustment in the accumulated adjustments account shall be an amount which bears the same ratio to the balance in such account as the number of shares redeemed in such redemption bears to the number of shares of stock in the corporation immediately before such redemption. (C) *Net loss for year disregarded* (i) *In general* — In applying this section to distributions made during any taxable year, the amount in the accumulated adjustments account as of the close of such taxable year shall be determined without regard to any net negative adjustment for such taxable year. (ii) *Net negative adjustment* — For purposes of clause (i), the term “net negative adjustment” means, with respect to any taxable year, the excess (if any) of— (I) the reductions in the account for the taxable year (other than for distributions), over (II) the increases in such account for such taxable year. (2) **S period** — The term “S period” means the most recent continuous period during which the corporation has been an S corporation. Such period shall not include any taxable year beginning before January 1, 1983. (3) **Election to distribute earnings first** (A) *In general* — An S corporation may, with the consent of all of its affected shareholders, elect to have paragraph (1) of subsection (c) not apply to all distributions made during the taxable year for which the election is made. (B) *Affected shareholder* — For purposes of subparagraph (A), the term “affected shareholder” means any shareholder to whom a distribution is made by the S corporation during the taxable year. **(f) Restricted bank director stock** If a director receives a distribution (not in part or full payment in exchange for stock) from an S corporation with respect to any restricted bank director stock (as defined in section 1361(f)), the amount of such distribution— (1) shall be includible in gross income of the director, and (2) shall be deductible by the corporation for the taxable year of such corporation in which or with which ends the taxable year in which such amount is included in the gross income of the director.

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

26 U.S.C. § 641 — Imposition of tax

**(a) Application of tax** The tax imposed by section 1(e) shall apply to the taxable income of estates or of any kind of property held in trust, including— (1) income accumulated in trust for the benefit of unborn or unascertained persons or persons with contingent interests, and income accumulated or held for future distribution under the terms of the will or trust; (2) income which is to be distributed currently by the fiduciary to the beneficiaries, and income collected by a guardian of an infant which is to be held or distributed as the court may direct; (3) income received by estates of deceased persons during the period of administration or settlement of the estate; and (4) income which, in the discretion of the fiduciary, may be either distributed to the beneficiaries or accumulated. **(b) Computation and payment** The taxable income of an estate or trust shall be computed in the same manner as in the case of an individual, except as otherwise provided in this part. The tax shall be computed on such taxable income and shall be paid by the fiduciary. For purposes of this subsection, a foreign trust or foreign estate shall be treated as a nonresident alien individual who is not present in the United States at any time. **(c) Special rules for taxation of electing small business trusts** (1) **In general** — For purposes of this chapter— (A) the portion of any electing small business trust which consists of stock in 1 or more S corporations shall be treated as a separate trust, and (B) the amount of the tax imposed by this chapter on such separate trust shall be determined with the modifications of paragraph (2). (2) **Modifications** — For purposes of paragraph (1), the modifications of this paragraph are the following: (A) Except as provided in s

Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 641

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

26 U.S.C. § 401 — Qualified pension, profit-sharing, and stock bonus plans

**(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

26 U.S.C. § 1361 — S corporation defined

**(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

Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 1361

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

26 U.S.C. § 1374 — Tax imposed on certain built-in gains

**(a) General rule** If for any taxable year beginning in the recognition period an S corporation has a net recognized built-in gain, there is hereby imposed a tax (computed under subsection (b)) on the income of such corporation for such taxable year. **(b) Amount of tax** (1) **In general** — The amount of the tax imposed by subsection (a) shall be computed by applying the highest rate of tax specified in section 11(b) to the net recognized built-in gain of the S corporation for the taxable year. (2) **Net operating loss carryforwards from C years allowed** — Notwithstanding section 1371(b)(1), any net operating loss carryforward arising in a taxable year for which the corporation was a C corporation shall be allowed for purposes of this section as a deduction against the net recognized built-in gain of the S corporation for the taxable year. For purposes of determining the amount of any such loss which may be carried to subsequent taxable years, the amount of the net recognized built-in gain shall be treated as taxable income. Rules similar to the rules of the preceding sentences of this paragraph shall apply in the case of a capital loss carryforward arising in a taxable year for which the corporation was a C corporation. (3) **Credits** (A) *In general* — Except as provided in subparagraph (B), no credit shall be allowable under part IV of subchapter A of this chapter (other than under section 34) against the tax imposed by subsection (a). (B) *Business credit carryforwards from C years allowed* — Notwithstanding section 1371(b)(1), any business credit carryforward under section 39 arising in a taxable year for which the corporation was a C corporation shall be allowed as a credit against the tax imposed by subsection (a) in the same manner as if it were

Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 1374

Stored review status: release_metadata_unconfirmed. Incoming connection: Explicit cross-reference supplied in source Markdown; currentness and applicability require review.

Federal law — U.S. Code and appendices · legal_authorities

26 U.S.C. § 4975 — Tax on prohibited transactions

**(a) Initial taxes on disqualified person** There is hereby imposed a tax on each prohibited transaction. The rate of tax shall be equal to 15 percent of the amount involved with respect to the prohibited transaction for each year (or part thereof) in the taxable period. The tax imposed by this subsection shall be paid by any disqualified person who participates in the prohibited transaction (other than a fiduciary acting only as such). **(b) Additional taxes on disqualified person** In any case in which an initial tax is imposed by subsection (a) on a prohibited transaction and the transaction is not corrected within the taxable period, there is hereby imposed a tax equal to 100 percent of the amount involved. The tax imposed by this subsection shall be paid by any disqualified person who participated in the prohibited transaction (other than a fiduciary acting only as such). **(c) Prohibited transaction** (1) **General rule** — For purposes of this section, the term “prohibited transaction” means any direct or indirect— (A) sale or exchange, or leasing, of any property between a plan and a disqualified person; (B) lending of money or other extension of credit between a plan and a disqualified person; (C) furnishing of goods, services, or facilities between a plan and a disqualified person; (D) transfer to, or use by or for the benefit of, a disqualified person of the income or assets of a plan; (E) act by a disqualified person who is a fiduciary whereby he deals with the income or assets of a plan in his own interest or for his own account; or (F) receipt of any consideration for his own personal account by any disqualified person who is a fiduciary from any party dealing with the plan in connection with a transaction involving the income or asse

Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 4975

Stored review status: release_metadata_unconfirmed. Incoming connection: Explicit cross-reference supplied in source Markdown; currentness and applicability require review.

Federal law — U.S. Code and appendices · legal_authorities

26 U.S.C. § 1368 — Distributions

Page 2457 TITLE 26—INTERNAL REVENUE CODE § 1368 I, § 137(a), Dec. 19, 2014, 128 Stat. 4019; Pub. L. 114–113, div. Q, title I, § 115(a), Dec. 18, 2015, 129 Stat. 3049.) Editorial Notes AMENDMENTS 2015—Subsec. (a)(2). Pub. L. 114–113 struck out ‘‘The preceding sentence shall not apply to contributions made in taxable years beginning after December 31, 2014.’’ at end of concluding provisions. 2014—Subsec. (a)(2). Pub. L. 113–295 substituted ‘‘De- cember 31, 2014’’ for ‘‘December 31, 2013’’ in concluding provisions. 2013—Subsec. (a)(2). Pub. L. 112–240 substituted ‘‘De- cember 31, 2013’’ for ‘‘December 31, 2011’’ in concluding provisions. 2010—Subsec. (a)(2). Pub. L. 111–312 substituted ‘‘De- cember 31, 2011’’ for ‘‘December 31, 2009’’ in concluding provisions. 2008—Subsec. (a)(2). Pub. L. 110–343 substituted ‘‘De- cember 31, 2009’’ for ‘‘December 31, 2007’’ in concluding provisions. 2006—Subsec. (a)(2). Pub. L. 109–280, which directed the addition of concluding provisions to section 1367(a)(2), without specifying the act to be amended, was executed to subsec. (a)(2) of this section, which is section 1367 of the Internal Revenue Code of 1986, to re- flect the probable intent of Congress. 1996—Subsec. (a)(2)(E). Pub. L. 104–188, § 1702(h)(14), substituted ‘‘section 613A(c)(11)(B)’’ for ‘‘section 613A(c)(13)(B)’’. Subsec. (b)(4). Pub. L. 104–188, § 1313(a), added par. (4). 1984—Subsec. (a)(2)(E). Pub. L. 98–369, § 722(e)(2), sub- stituted ‘‘for any oil and gas property held by the S corporation to the extent such deduction does not ex- ceed the proportionate share of the adjusted basis of such property allocated to such shareholder under sec- tion 613A(c)(13)(B)’’ for ‘‘under section 611 with respect to oil and gas wells’’. Subsec. (b)(2)(B).

Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 1368

Stored review status: historical_2024_not_currentness_verified. Same stored citation; legal effect and authority still require review.