26 U.S.C. § 1562 — Untitled legal text

Page 2558 TITLE 26—INTERNAL REVENUE CODE [§ 1562 1969—Pub. L. 91–172 provided, with respect to taxable years beginning after Dec. 31, 1974, that a controlled group of corporations is limited to one $25,000 surtax exemption under section 11(d), one $100,000 amount for purposes of computing the accumulated earnings credit under section 535(c)(2) and (3), and one $25,000 amount for purposes of computing the limitation on the small business deduction of life insurance companies under sections 804(a)(4) and 809(d)(10). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2017 AMENDMENT Amendment by section 12001(b)(16) of Pub. L. 115–97 applicable to taxable years beginning after Dec. 31, 2017, see section 12001(c) of Pub. L. 115–97, set out as a note under section 11 of this title. Amendment by section 13001(b)(6)(A) of Pub. L. 115–97 applicable to transfers made after Dec. 31, 2017, see sec- tion 13001(c)(3) of Pub. L. 115–97, set out as a note under section 11 of this title. EFFECTIVE DATE OF 2014 AMENDMENT Amendment by Pub. L. 113–295 effective Dec. 19, 2014, subject to a savings provision, see section 221(b) of Pub. L. 113–295, set out as a note under section 1 of this title. EFFECTIVE DATE OF 1996 AMENDMENT Amendment by Pub. L. 104–188 effective as if included in the provision of the Revenue Reconciliation Act of 1993, Pub. L. 103–66, §§ 13001–13444, to which such amend- ment relates, see section 1703(o) of Pub. L. 104–188, set out as a note under section 39 of this title. EFFECTIVE DATE OF 1988 AMENDMENT Amendment by Pub. L. 100–647 effective, except as otherwise provided, as if included in the provisions of the Revenue Act of 1987, Pub. L. 100–203, title X, to which such amendment relates, see section 2004(u) of Pub. L. 100–647, set out as a note under section 56 of this title. EFFECTIVE DATE OF 1986 AMENDMENT Amendment by Pub. L. 99–514 applicable to taxable years beginning after Dec. 31, 1986, with certain excep- tions and qualifications, see section 701(f) of Pub. L. 99–514, set out as an Effective Date note under section 55 of this title. Amendment by Pub. L. 99–499 applicable to taxable years beginning after Dec. 31, 1986, see section 516(c) of Pub. L. 99–499, set out as a note under section 26 of this title. EFFECTIVE DATE OF 1984 AMENDMENT Amendment by section 66(b) of Pub. L. 98–369 applica- ble to taxable years beginning after Dec. 31, 1983, see section 66(c) of Pub. L. 98–369, set out as a note under section 11 of this title. Amendment by section 211(b)(21) of Pub. L. 98–369 ap- plicable to taxable years beginning after Dec. 31, 1983, see section 215 of Pub. L. 98–369, set out as an Effective Date note under section 801 of this title. EFFECTIVE AND TERMINATION DATE OF 1982 AMENDMENT Pub. L. 97–248, title II, § 263(a)(1), Sept. 3, 1982, 96 Stat. 541, provided that the amendment made by section 259(b), (c) of Pub. L. 97–248 is applicable to taxable years beginning after Dec. 31, 1981, and before Jan. 1, 1984. EFFECTIVE DATE OF 1981 AMENDMENT Amendment by Pub. L. 97–34 applicable to taxable years beginning after Dec. 31, 1981, see section 232(c) of Pub. L. 97–34, set out as a note under section 535 of this title. EFFECTIVE DATE OF 1978 AMENDMENT Amendment by section 301(b)(19) of Pub. L. 95–600 ap- plicable to taxable years beginning after Dec. 31, 1978, see section 301(c) of Pub. L. 95–600, set out as a note under section 11 of this title. Amendment by section 703(j)(7) of Pub. L. 95–600 effec- tive on Oct. 4, 1976, see section 703(r) of Pub. L. 95–600, set out as a note under section 46 of this title. EFFECTIVE DATES OF 1976 AMENDMENT Amendment by section 901(c)(1) of Pub. L. 94–455 ap- plicable to taxable years ending after Dec. 31, 1975, see section 901(d) of Pub. L. 94–455, set out as a note under section 11 of this title. Amendment by section 1901(b)(1)(J)(v) of Pub. L. 94–455 effective for taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94–455, set out as a note under section 2 of this title. EFFECTIVE AND TERMINATION DATES OF 1975 AMENDMENT Amendment by Pub. L. 94–164 applicable to taxable years beginning after Dec. 31, 1975, see section 4(e) of Pub. L. 94–164, set out as a note under section 11 of this title. Amendment by section 303(c)(1) of Pub. L. 94–12 appli- cable to taxable years ending after Dec. 31, 1974, but to cease to apply for taxable years ending after Dec. 31, 1975, see section 305(b)(1) of Pub. L. 94–12, set out as a note under section 11 of this title. Amendment by section 304(b) of Pub. L. 94–12 applica- ble to taxable years beginning after Dec. 31, 1974, see section 305(c) of Pub. L. 94–12, set out as an Effective Date of 1975 Amendment note under section 535 of this title. EFFECTIVE DATE OF 1969 AMENDMENT Pub. L. 91–172, title IV, § 401(h), Dec. 30, 1969, 83 Stat. 604, provided that: ‘‘(1) The amendments made by subsection (a) [amend- ing this section and repealing section 1562 of this title] shall apply with respect to taxable years beginning after December 31, 1974. ‘‘(2) The amendments made by subsection (b) [enact- ing section 1564 and amending sections 11, 535, 804, and 1562] shall apply with respect to taxable years begin- ning after December 31, 1969. ‘‘(3) The amendments made by subsections (c), (d), (e), and (f) [amending sections 46, 48, 179, and 1563] shall apply with respect to taxable years ending on or after December 31, 1970.’’ EFFECTIVE DATE Section applicable with respect to taxable years end- ing after Dec. 31, 1963, see section 235(d) of Pub. L. 88–272, set out as an Effective Date of 1964 Amendment note under section 269 of this title. APPLICABILITY OF CERTAIN AMENDMENTS BY PUB. L. 99–514 IN RELATION TO TREATY OBLIGATIONS OF UNITED STATES For applicability of amendment by section 701(e)(2) of Pub. L. 99–514 notwithstanding any treaty obligation of the United States in effect on Oct. 22, 1986, see section 1012(aa)(2) of Pub. L. 100–647, set out as a note under section 861 of this title. [§ 1562. Repealed. Pub. L. 91–172, title IV, § 401(a)(2), Dec. 30, 1969, 83 Stat. 600] Section, added Pub. L. 88–272, title II, § 235(a), Feb. 26, 1964, 78 Stat. 117, amended Pub. L. 91–172, title IV, § 401(b)(2)(A), Dec. 30, 1969, 83 Stat. 602, set limits on the privilege of groups to elect multiple surtax exemptions. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF REPEAL Repeal applicable with respect to taxable years be- ginning after Dec. 31, 1974, see section 401(h)(1) of Pub. L. 91–172, set out as an Effective Date of 1969 Amend- ment note under section 1561 of this title. Page 2559 TITLE 26—INTERNAL REVENUE CODE § 1563 RETROACTIVE TERMINATION OF ELECTIONS Pub. L. 91–172, title IV, § 401(g), Dec. 30, 1969, 83 Stat. 604, authorized an affiliated group of corporations mak- ing a consolidated return for the taxable year which in- cluded Dec. 31, 1970, to terminate the election under section 1562 of this title with respect to any prior Dec. 31 which was included in a taxable year of any such cor- porations from which there was a net operating loss carryover to the 1970 consolidated return year and pro- vided that the termination of such election was to be valid only if in accord with subsecs. (c)(1) and (e) of sec- tion 1562 of this title other than the requirement of making the termination prior to the expiration of the 3 year period specified in subsec. (e) of section 1562 of this title. § 1563. Definitions and special rules (a) Controlled group of corporations For purposes of this part, the term ‘‘controlled group of corporations’’ means any group of— (1) Parent-subsidiary controlled group One or more chains of corporations con- nected through stock ownership with a com- mon parent corporation if— (A) stock possessing at least 80 percent of the total combined voting power of all class- es of stock entitled to vote or at least 80 per- cent of the total value of shares of all class- es of stock of each of the corporations, ex- cept the common parent corporation, is owned (within the meaning of subsection (d)(1)) by one or more of the other corpora- tions; and (B) the common parent corporation owns (within the meaning of subsection (d)(1)) stock possessing at least 80 percent of the total combined voting power of all classes of stock entitled to vote or at least 80 percent of the total value of shares of all classes of stock of at least one of the other corpora- tions, excluding, in computing such voting power or value, stock owned directly by such other corporations. (2) Brother-sister controlled group Two or more corporations if 5 or fewer per- sons who are individuals, estates, or trusts own (within the meaning of subsection (d)(2)) stock possessing more than 50 percent of the total combined voting power of all classes of stock entitled to vote or more than 50 percent of the total value of shares of all classes of stock of each corporation, taking into account the stock ownership of each such person only to the extent such stock ownership is identical with respect to each such corporation. (3) Combined group Three or more corporations each of which is a member of a group of corporations described in paragraph (1) or (2), and one of which— (A) is a common parent corporation in- cluded in a group of corporations described in paragraph (1), and also (B) is included in a group of corporations described in paragraph (2). (4) Certain insurance companies Two or more insurance companies subject to taxation under section 801 which are members of a controlled group of corporations described in paragraph (1), (2), or (3). Such insurance companies shall be treated as a controlled group of corporations separate from any other corporations which are members of the con- trolled group of corporations described in paragraph (1), (2), or (3). (b) Component member (1) General rule For purposes of this part, a corporation is a component member of a controlled group of corporations on a December 31 of any taxable year (and with respect to the taxable year which includes such December 31) if such cor- poration— (A) is a member of such controlled group of corporations on the December 31 included in such year and is not treated as an ex- cluded member under paragraph (2), or (B) is not a member of such controlled group of corporations on the December 31 in- cluded in such year but is treated as an addi- tional member under paragraph (3). (2) Excluded members A corporation which is a member of a con- trolled group of corporations on December 31 of any taxable year shall be treated as an ex- cluded member of such group for the taxable year including such December 31 if such cor- poration— (A) is a member of such group for less than one-half the number of days in such taxable year which precede such December 31, (B) is exempt from taxation under section 501(a) (except a corporation which is subject to tax on its unrelated business taxable in- come under section 511) for such taxable year, (C) is a foreign corporation subject to tax under section 881 for such taxable year, (D) is an insurance company subject to taxation under section 801 (other than an in- surance company which is a member of a controlled group described in subsection (a)(4)), or (E) is a franchised corporation, as defined in subsection (f)(4). (3) Additional members A corporation which— (A) was a member of a controlled group of corporations at any time during a calendar year, (B) is not a member of such group on De- cember 31 of such calendar year, and (C) is not described, with respect to such group, in subparagraph (B), (C), (D), or (E) of paragraph (2), shall be treated as an additional member of such group on December 31 for its taxable year including such December 31 if it was a member of such group for one-half (or more) of the number of days in such taxable year which precede such December 31. (4) Overlapping groups If a corporation is a component member of more than one controlled group of corpora- tions with respect to any taxable year, such corporation shall be treated as a component member of only one controlled group. The de- termination as to the group of which such cor-