26 U.S.C. § 242 — Untitled legal text

Page 977 TITLE 26—INTERNAL REVENUE CODE § 243 250. Foreign-derived intangible income and global intangible low-taxed income. Editorial Notes AMENDMENTS 2017—Pub. L. 115–97, title I, §§ 13821(b)(2), 14101(e)(3), 14202(b)(4), Dec. 22, 2017, 131 Stat. 2181, 2192, 2216, added items 245A, 247, and 250. 2014—Pub. L. 113–295, div. A, title II, § 221(a)(41)(A), Dec. 19, 2014, 128 Stat. 4043, struck out item 244 ‘‘Divi- dends received on certain preferred stock’’ and item 247 ‘‘Dividends paid on certain preferred stock of public utilities’’. 1990—Pub. L. 101–508, title XI, § 11801(b)(4), Nov. 5, 1990, 104 Stat. 1388–522, struck out item 250 ‘‘Certain payments to the National Railroad Passenger Corpora- tion’’. 1984—Pub. L. 98–369, div. A, title I, § 51(b), July 18, 1984, 98 Stat. 564, added item 246A. 1976—Pub. L. 94–455, title XIX, § 1901(b)(1)(AA), Oct. 4, 1976, 90 Stat. 1792, struck out item 242 ‘‘Partially tax- exempt interest’’. 1970—Pub. L. 91–518, title IX, § 901(b), Oct. 30, 1970, 84 Stat. 1342, added item 250. 1969—Pub. L. 91–172, title IV, § 414(b), Dec. 30, 1969, 83 Stat. 613, added item 249. § 241. Allowance of special deductions In addition to the deductions provided in part VI (sec. 161 and following), there shall be al- lowed as deductions in computing taxable in- come the items specified in this part. (Aug. 16, 1954, ch. 736, 68A Stat. 72.) [§ 242. Repealed. Pub. L. 94–455, title XIX, § 1901(a)(33), Oct. 4, 1976, 90 Stat. 1769] Section, acts Aug. 16, 1954, ch. 736, 68A Stat. 72; Feb. 26, 1964, Pub. L. 88–272, title I, § 123(c), 78 Stat. 30, al- lowed to corporations as a deduction the amount re- ceived as interest on obligations of the United States or on obligations of corporations organized under Acts of Congress which are instrumentalities of the United States under certain conditions. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF REPEAL Repeal effective for taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94–455, set out as an Effective Date of 1976 Amendment note under section 2 of this title. § 243. Dividends received by corporations (a) General rule In the case of a corporation, there shall be al- lowed as a deduction an amount equal to the fol- lowing 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 re- ceived by a small business investment com- pany operating under the Small Business In- vestment Act of 1958 (15 U.S.C. 661 and fol- lowing); and (3) 100 percent, in the case of qualifying divi- dends (as defined in subsection (b)(1)). (b) Qualifying dividends (1) In general For purposes of this section, the term ‘‘qualifying dividend’’ means any dividend re- ceived 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 mean- ing given such term by section 1504(a), ex- cept 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 taxable year which includes the day on which such dividend is received— (i) 1 or more members of the affiliated group referred to in paragraph (1)(A) choose to any extent to take the benefits of section 901, and (ii) 1 or more other members of such group claim to any extent a deduction for taxes otherwise creditable under section 901. (3) Special rule for groups which include life insurance companies (A) In general In the case of an affiliated group which in- cludes 1 or more insurance companies under section 801, no dividend by any member of such group shall be treated as a qualifying dividend unless an election under this para- graph is in effect for the taxable year in which the dividend is received. The pre- ceding sentence shall not apply in the case of a dividend described in paragraph (1)(B)(ii). (B) Effect of election If an election under this paragraph is in ef- fect with respect to any affiliated group— (i) part II of subchapter B of chapter 6 (relating to certain controlled corpora- tions) shall be applied with respect to the members of such group without regard to sections 1563(a)(4) and 1563(b)(2)(D), and (ii) for purposes of this subsection, a dis- tribution by any member of such group which is subject to tax under section 801 shall not be treated as a qualifying divi- dend if such distribution is out of earnings and profits for a taxable year for which an election under this paragraph is not effec- tive and for which such distributing cor- poration was not a component member of a controlled group of corporations within the meaning of section 1563 solely by rea- son of section 1563(b)(2)(D). (C) Election An election under this paragraph shall be made by the common parent of the affiliated