26 U.S.C. § 114 — Untitled legal text

Page 565 TITLE 26—INTERNAL REVENUE CODE [§ 114 EX. ORD. NO. 12744. DESIGNATION OF ARABIAN PENINSULA AREAS, AIRSPACE, AND ADJACENT WATERS AS COMBAT ZONE Ex. Ord. No. 12744, Jan. 21, 1991, 56 F.R. 2663, provided: By the authority vested in me as President by the Constitution and the laws of the United States of America, including section 112 of the Internal Revenue Code of 1986 (26 U.S.C. 112), I hereby designate, for pur- poses of that section, the following locations, including the airspace above such locations, as an area in which Armed Forces of the United States are and have been engaged in combat: —the Persian Gulf —the Red Sea —the Gulf of Oman —that portion of the Arabian Sea that lies north of 10 degrees north latitude and west of 68 degrees east longitude —the Gulf of Aden —the total land areas of Iraq, Kuwait, Saudi Arabia, Oman, Bahrain, Qatar, and the United Arab Emirates. For the purposes of this order, the date of the com- mencing of combatant activities in such zone is hereby designated as January 17, 1991. GEORGE BUSH. EX. ORD. NO. 13002. TERMINATION OF COMBAT ZONE DES- IGNATION IN VIETNAM AND WATERS ADJACENT THERETO Ex. Ord. No. 13002, May 13, 1996, 61 F.R. 24665, pro- vided: By the authority vested in me as President by the Constitution and the laws of the United States of America, including section 112(c)(3) of the Internal Rev- enue Code of 1986 (26 U.S.C. 112(c)(3)), June 30, 1996, as of midnight thereof, is hereby designated as the date of termination of combatant activities in the zone com- prised of the area described in Executive Order No. 11216 of April 24, 1965 [set out above]. WILLIAM J. CLINTON. EX. ORD. NO. 13119. DESIGNATION OF FEDERAL REPUBLIC OF YUGOSLAVIA (SERBIA/MONTENEGRO), ALBANIA, THE AIRSPACE ABOVE, AND ADJACENT WATERS AS A COMBAT ZONE Ex. Ord. No. 13119, April 13, 1999, 64 F.R. 18797, pro- vided: Pursuant to the authority vested in me as President by the Constitution and laws of the United States of America, including section 112 of the Internal Revenue Code of 1986 (26 U.S.C. 112), I designate, for the purposes of that section, the following locations, including the airspace above such locations, as an area in which Armed Forces of the United States are and have been engaged in combat: —The Federal Republic of Yugoslavia (Serbia/Monte- negro); —Albania; —the Adriatic Sea; —the Ionian Sea north of the 39th parallel. For the purposes of this order, I designate March 24, 1999, as the date of the commencement of combatant activities in such zone. WILLIAM J. CLINTON. EX. ORD. NO. 13239. DESIGNATION OF AFGHANISTAN AND THE AIRSPACE ABOVE AS A COMBAT ZONE Ex. Ord. No. 13239, Dec. 12, 2001, 66 F.R. 64907, pro- vided: Pursuant to the authority vested in me as President by the Constitution and the laws of the United States of America, including section 112 of the Internal Rev- enue Code of 1986 (26 U.S.C. 112), I designate, for pur- poses of that section, Afghanistan, including the air- space above, as an area in which Armed Forces of the United States are and have been engaged in combat. For purposes of this order, I designate September 19, 2001, as the date of the commencement of combatant activities in such zone. GEORGE W. BUSH. [§ 113. Repealed. Pub. L. 101–508, title XI, § 11801(a)(7), Nov. 5, 1990, 104 Stat. 1388–520] Section, act Aug. 16, 1954, ch. 736, 68A Stat. 35, related to mustering-out payments for members of Armed Forces. Statutory Notes and Related Subsidiaries SAVINGS PROVISION For provisions that nothing in repeal by Pub. L. 101–508 be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to Nov. 5, 1990, for purposes of determining liabil- ity for tax for periods ending after Nov. 5, 1990, see sec- tion 11821(b) of Pub. L. 101–508, set out as a note under section 45K of this title. [§ 114. Repealed. Pub. L. 108–357, title I, § 101(a), Oct. 22, 2004, 118 Stat. 1423] Section, added Pub. L. 106–519, § 3(a), Nov. 15, 2000, 114 Stat. 2423, related to exclusion of extraterritorial in- come from gross income. A prior section 114, act Aug. 16, 1954, ch. 736, 68A Stat. 35, related to sports programs conducted for American National Red Cross, prior to repeal by Pub. L. 101–508, title XI, § 11801(a)(8), Nov. 5, 1990, 104 Stat. 1388–520. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF REPEAL Repeal applicable to transactions after Dec. 31, 2004, see section 101(c) of Pub. L. 108–357, set out as an Effec- tive Date of 2004 Amendments note under section 56 of this title. TRANSITION PROVISIONS Pub. L. 108–357, title I, § 101(d)–(f), Oct. 22, 2004, 118 Stat. 1423, 1424, as amended by Pub. L. 109–222, title V, § 513(b), May 17, 2006, 120 Stat. 366; Pub. L. 113–295, div. A, title II, § 219(a), Dec. 19, 2014, 128 Stat. 4035, provided that: ‘‘(d) TRANSITIONAL RULE FOR 2005 AND 2006.— ‘‘(1) IN GENERAL.—In the case of transactions during 2005 or 2006, the amount includible in gross income by reason of the amendments made by this section [amending sections 56, 275, 864, 903, and 999 of this title and repealing this section and sections 941 to 943 of this title] shall not exceed the applicable percent- age of the amount which would have been so included but for this subsection. ‘‘(2) APPLICABLE PERCENTAGE.—For purposes of paragraph (1), the applicable percentage shall be as follows: ‘‘(A) For 2005, the applicable percentage shall be 20 percent. ‘‘(B) For 2006, the applicable percentage shall be 40 percent. ‘‘(3) COORDINATION WITH SECTION 199.—This sub- section shall be applied without regard to any deduc- tion allowable under section 199 [probably means former section 199 of the Internal Revenue Code of 1986]. ‘‘(e) REVOCATION OF ELECTION TO BE TREATED AS DO- MESTIC CORPORATION.—If, during the 1-year period be- ginning on the date of the enactment of this Act [Oct. 22, 2004], a corporation for which an election is in effect under section 943(e) of the Internal Revenue Code of 1986 revokes such election, no gain or loss shall be rec- ognized with respect to property treated as transferred under clause (ii) of section 943(e)(4)(B) of such Code to the extent such property— ‘‘(1) was treated as transferred under clause (i) thereof, or ‘‘(2) was acquired during a taxable year to which such election applies and before May 1, 2003, in the or- dinary course of its trade or business. Page 566 TITLE 26—INTERNAL REVENUE CODE § 115 The Secretary of the Treasury (or such Secretary’s del- egate) may prescribe such regulations as may be nec- essary to prevent the abuse of the purposes of this sub- section. ‘‘[(f) Repealed. Pub. L. 109–222, title V, § 513(b), May 17, 2006, 120 Stat. 366.]’’ § 115. Income of States, municipalities, etc. Gross income does not include— (1) income derived from any public utility or the exercise of any essential governmental function and accruing to a State or any polit- ical subdivision thereof, or the District of Co- lumbia; or (2) income accruing to the government of any possession of the United States, or any po- litical subdivision thereof. (Aug. 16, 1954, ch. 736, 68A Stat. 35; Pub. L. 94–455, title XIX, § 1901(a)(19), Oct. 4, 1976, 90 Stat. 1766.) Editorial Notes AMENDMENTS 1976—Pub. L. 94–455 struck out ‘‘(a) General rule’’ be- fore ‘‘Gross income does not include’’, struck out sub- secs. (b) and (c) which related to contracts concerning public utilities made before Sept. 8, 1916, and contracts concerning bridge acquisition made before May 29, 1928, respectively, and in par. (1) of former subsec. (a), struck out ‘‘or territory’’ after ‘‘accruing to a State’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1976 AMENDMENT Amendment by Pub. L. 94–455 applicable with respect to taxable years beginning after Dec. 31, 1976, see sec- tion 1901(d) of Pub. L. 94–455, set out as a note under section 2 of this title. TAX TREATMENT OF STATE OWNERSHIP OF RAILROAD REAL ESTATE INVESTMENT TRUST Pub. L. 109–59, title XI, § 11146, Aug. 10, 2005, 119 Stat. 1966, provided that: ‘‘(a) IN GENERAL.—If a State owns all of the out- standing stock of a corporation— ‘‘(1) which is a real estate investment trust on the date of the enactment of this Act [Aug. 10, 2005], ‘‘(2) which is a non-operating class III railroad, and ‘‘(3) substantially all of the activities of which con- sist of the ownership, leasing, and operation by such corporation of facilities, equipment, and other prop- erty used by the corporation or other persons for rail- road transportation and for economic development purposes for the benefit of the State and its citizens, then, to the extent such activities are of a type which are an essential governmental function within the meaning of section 115 of the Internal Revenue Code of 1986, income derived from such activities by the corporation shall be treated as accruing to the State for purposes of section 115 of such Code. ‘‘(b) GAIN OR LOSS NOT RECOGNIZED ON CONVERSION.— Notwithstanding section 337(d) of the Internal Revenue Code of 1986— ‘‘(1) no gain or loss shall be recognized under sec- tion 336 or 337 of such Code, and ‘‘(2) no change in basis of the property of such cor- poration shall occur, because of any change of status of a corporation to a tax-exempt entity by reason of the application of subsection (a). ‘‘(c) TAX-EXEMPT FINANCING.— ‘‘(1) IN GENERAL.—Any obligation issued by a cor- poration described in subsection (a) at least 95 per- cent of the net proceeds (as defined in section 150(a) of the Internal Revenue Code of 1986) of which are to be used to provide for the acquisition, construction, or improvement of railroad transportation infrastruc- ture (including railroad terminal facilities)— ‘‘(A) shall be treated as a State or local bond (within the meaning of section 103(c) of such Code), and ‘‘(B) shall not be treated as a private activity bond (within the meaning of section 103(b)(1) of such Code) solely by reason of the ownership or use of such railroad transportation infrastructure by the corporation. ‘‘(2) NO INFERENCE.—Except as provided in para- graph (1), nothing in this subsection shall be con- strued to affect the treatment of the private use of proceeds or property financed with obligations issued by the corporation for purposes of section 103 of the Internal Revenue Code of 1986 and part IV of sub- chapter B [probably means part IV of subchapter B of chapter 1] of such Code. ‘‘(d) DEFINITIONS.—For purposes of this section: ‘‘(1) REAL ESTATE INVESTMENT TRUST.—The term ‘real estate investment trust’ has the meaning given such term by section 856(a) of the Internal Revenue Code of 1986. ‘‘(2) NON-OPERATING CLASS III RAILROAD.—The term ‘non-operating class III railroad’ has the meaning given such term by part A of subtitle IV of title 49, United States Code (49 U.S.C. 10101 et seq.), and the regulations thereunder. ‘‘(3) STATE.—The term ‘State’ includes— ‘‘(A) the District of Columbia and any possession of the United States, and ‘‘(B) any authority, agency, or public corporation of a State. ‘‘(e) APPLICABILITY.— ‘‘(1) IN GENERAL.—Except as provided in paragraph (2), this section shall apply on and after the date on which a State becomes the owner of all of the out- standing stock of a corporation described in sub- section (a) through action of such corporation’s board of directors. ‘‘(2) EXCEPTION.—This section shall not apply to any State which— ‘‘(A) becomes the owner of all of the voting stock of a corporation described in subsection (a) after December 31, 2003, or ‘‘(B) becomes the owner of all of the outstanding stock of a corporation described in subsection (a) after December 31, 2006.’’ [§ 116. Repealed. Pub. L. 99–514, title VI, § 612(a), Oct. 22, 1986, 100 Stat. 2250] Section, acts Aug. 16, 1954, ch. 736, 68A Stat. 37; June 25, 1959, Pub. L. 86–69, § 3(a)(2), 73 Stat. 139; Sept. 14, 1960, Pub. L. 86–779, § 10(f), 74 Stat. 1009; Feb. 26, 1964, Pub. L. 88–272, title II, § 201(c), (d)(6)(C), 78 Stat. 32; Nov. 13, 1966, Pub. L. 89–809, title I, § 103(g), 80 Stat. 1552; Oct. 4, 1976, Pub. L. 94–455, title X, §§ 1051(h)(2), 1053(d)(1), title XIX, § 1901(a)(20), 90 Stat. 1647, 1649, 1766; Apr. 2, 1980, Pub. L. 96–223, title IV, § 404(a), 94 Stat. 305; Aug. 13, 1981, Pub. L. 97–34, title III, § 302(b)(2), 95 Stat. 272; July 18, 1984, Pub. L. 98–369, div. A, title V, § 542(b), 98 Stat. 891, authorized partial exclusion of dividends re- ceived by individuals. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF REPEAL Repeal applicable to taxable years beginning after Dec. 31, 1986, see section 612(c) of Pub. L. 99–514, set out as an Effective Date of 1986 Amendment note under sec- tion 301 of this title. § 117. Qualified scholarships (a) General rule Gross income does not include any amount re- ceived as a qualified scholarship by an indi- vidual who is a candidate for a degree at an edu- cational organization described in section 170(b)(1)(A)(ii).