26 U.S.C. § 855 — Dividends paid by regulated investment

Page 1974 TITLE 26—INTERNAL REVENUE CODE § 855 EFFECTIVE AND TERMINATION DATES OF 1980 AMENDMENT Amendment by Pub. L. 96–223 applicable with respect to taxable years beginning after Dec. 31, 1980, and be- fore Jan. 1, 1982, see section 404(c) of Pub. L. 96–223, set out as a note under section 265 of this title. EFFECTIVE DATE OF 1964 AMENDMENT Amendment by section 201(d)(8)–(10) of Pub. L. 88–272 applicable to dividends received after Dec. 31, 1964, in taxable years ending after such date, see section 201(e) of Pub. L. 88–272, set out as a note under section 22 of this title. Amendment by section 229(a)(4) of Pub. L. 88–272 ap- plicable to taxable years of regulated investment com- panies ending on or after Feb. 26, 1964, see section 229(c) of Pub. L. 88–272, set out as a note under section 852 of this title. QUALIFIED DIVIDEND NOTICE PERIOD Pub. L. 108–311, title IV, § 402(a)(5)(F), Oct. 4, 2004, 118 Stat. 1185, provided that: ‘‘With respect to any taxable year of a regulated investment company or real estate investment trust ending on or before November 30, 2003, the period for providing notice of the qualified dividend amount to shareholders under [former, as to 854(b)(2)] sections 854(b)(2) and 857(c)(2)(C) of the Internal Rev- enue Code of 1986, as amended by this section, shall not expire before the date on which the statement under section 6042(c) of such Code is required to be furnished with respect to the last calendar year beginning in such taxable year.’’ § 855. Dividends paid by regulated investment company after close of taxable year (a) General rule For purposes of this chapter, if a regulated in- vestment company— (1) declares a dividend on or before the later of— (A) the 15th day of the 9th month following the close of the taxable year, or (B) in the case of an extension of time for filing the company’s return for the taxable year, the due date for filing such return tak- ing into account such extension, and (2) distributes the amount of such dividend to shareholders in the 12-month period fol- lowing the close of such taxable year and not later than the date of the first dividend pay- ment of the same type of dividend made after such declaration, the amount so declared and distributed shall, to the extent the company elects in such return in accordance with regulations prescribed by the Secretary, be considered as having been paid during such taxable year, except as provided in subsections (b) and (c). For purposes of para- graph (2), a dividend attributable to any short- term capital gain with respect to which a notice is required under the Investment Company Act of 1940 shall be treated as the same type of divi- dend as a capital gain dividend. (b) Receipt by shareholder Except as provided in section 852(b)(7), amounts to which subsection (a) is applicable shall be treated as received by the shareholder in the taxable year in which the distribution is made. (c) Foreign tax election If an investment company to which section 853 is applicable for the taxable year makes a dis- tribution as provided in subsection (a) of this section, the shareholders shall consider the amounts described in section 853(b)(2) allocable to such distribution as paid or received, as the case may be, in the taxable year in which the distribution is made. (Aug. 16, 1954, ch. 736, 68A Stat. 274; Pub. L. 86–779, § 10(b)(2), Sept. 14, 1960, 74 Stat. 1009; Pub. L. 88–272, title II, § 229(a)(5), Feb. 26, 1964, 78 Stat. 99; Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 99–514, title VI, §§ 651(b)(1)(B), 655(a)(5), Oct. 22, 1986, 100 Stat. 2296, 2299; Pub. L. 100–647, title I, § 1006(l)(1)(B), Nov. 10, 1988, 102 Stat. 3413; Pub. L. 111–325, title III, §§ 301(g), 304(a)–(c), Dec. 22, 2010, 124 Stat. 3547–3549; Pub. L. 113–295, div. A, title II, § 205(b), Dec. 19, 2014, 128 Stat. 4026.) Editorial Notes REFERENCES IN TEXT The Investment Company Act of 1940, referred to in subsec. (a), is title I of act Aug. 22, 1940, ch. 686, 54 Stat. 789, which is classified generally to subchapter I (§ 80a–1 et seq.) of chapter 2D of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see section 80a–51 of Title 15 and Tables. AMENDMENTS 2014—Subsec. (a)(1). Pub. L. 113–295 inserted ‘‘on or’’ before ‘‘before’’ in introductory provisions. 2010—Subsec. (a). Pub. L. 111–325, § 304(c), in con- cluding provisions, inserted at end ‘‘For purposes of paragraph (2), a dividend attributable to any short- term capital gain with respect to which a notice is re- quired under the Investment Company Act of 1940 shall be treated as the same type of dividend as a capital gain dividend.’’ Pub. L. 111–325, § 301(g)(2), substituted ‘‘and (c)’’ for ‘‘, (c) and (d)’’ in concluding provisions. Subsec. (a)(1). Pub. L. 111–325, § 304(a), amended par. (1) generally. Prior to amendment, par. (1) read as fol- lows: ‘‘declares a dividend prior to the time prescribed by law for the filing of its return for a taxable year (in- cluding the period of any extension of time granted for filing such return), and’’. Subsec. (a)(2). Pub. L. 111–325, § 304(b), substituted ‘‘the first dividend payment of the same type of divi- dend’’ for ‘‘the first regular dividend payment’’. Subsecs. (c), (d). Pub. L. 111–325, § 301(g)(1), redesig- nated subsec. (d) as (c) and struck out former subsec. (c). Text of former subsec. (c) read as follows: ‘‘In the case of amounts to which subsection (a) is applicable, any notice to shareholders required under this part with respect to such amounts shall be made not later than 60 days after the close of the taxable year in which the distribution is made.’’ 1988—Subsec. (b). Pub. L. 100–647 substituted ‘‘section 852(b)(7)’’ for ‘‘section 852(b)(6)’’. 1986—Subsec. (b). Pub. L. 99–514, § 651(b)(1)(B), sub- stituted ‘‘Except as provided in section 852(b)(6), amounts’’ for ‘‘Amounts’’. Subsec. (c). Pub. L. 99–514, § 655(a)(5), substituted ‘‘60 days’’ for ‘‘45 days’’. 1976—Subsec. (a). Pub. L. 94–455 struck out ‘‘or his delegate’’ after ‘‘Secretary’’. 1964—Subsec. (c). Pub. L. 88–272 substituted ‘‘45 days’’ for ‘‘30 days’’. 1960—Subsec. (c). Pub. L. 86–779 substituted ‘‘this part’’ for ‘‘this subchapter’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2014 AMENDMENT Amendment by Pub. L. 113–295 effective as if included in the provision of the Regulated Investment Company Page 1975 TITLE 26—INTERNAL REVENUE CODE § 856 Modernization Act of 2010, Pub. L. 111–325, to which such amendment relates, with savings provision in cer- tain cases of an election by a regulated investment company under section 852(b)(8) of this title, see sec- tion 205(f) of Pub. L. 113–295, set out as a note under section 852 of this title. EFFECTIVE DATE OF 2010 AMENDMENT Amendment by section 301(g) of Pub. L. 111–325 appli- cable to taxable years beginning after Dec. 22, 2010, see section 301(h) of Pub. L. 111–325, set out as a note under section 852 of this title. Pub. L. 111–325, title III, § 304(d), Dec. 22, 2010, 124 Stat. 3549, provided that: ‘‘The amendments made by this section [amending this section] shall apply to dis- tributions in taxable years beginning after the date of the enactment of this Act [Dec. 22, 2010].’’ EFFECTIVE DATE OF 1988 AMENDMENT Amendment by Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title. EFFECTIVE DATE OF 1986 AMENDMENT Amendment by section 651(b)(1)(B) of Pub. L. 99–514 applicable to calendar years beginning after Dec. 31, 1986, see section 651(d) of Pub. L. 99–514, set out as an Effective Date note under section 4982 of this title. Amendment by section 655(a)(5) of Pub. L. 99–514 ap- plicable to taxable years beginning after Oct. 22, 1986, see section 655(b) of Pub. L. 99–514, set out as a note under section 852 of this title. EFFECTIVE DATE OF 1964 AMENDMENT Amendment by Pub. L. 88–272 applicable to taxable years of regulated investment companies ending on or after Feb. 26, 1964, see section 229(c) of Pub. L. 88–272, set out as a note under section 852 of this title. EFFECTIVE DATE OF 1960 AMENDMENT Amendment by Pub. L. 86–779 applicable with respect to taxable years of real estate investment trusts begin- ning after Dec. 31, 1960, see section 10(k) of Pub. L. 86–779, set out as an Effective Date note under section 856 of this title. PART II—REAL ESTATE INVESTMENT TRUSTS Sec. 856. Definition of real estate investment trust. 857. Taxation of real estate investment trusts and their beneficiaries. 858. Dividends paid by real estate investment trust after close of taxable year. 859. Adoption of annual accounting period. Editorial Notes AMENDMENTS 1978—Pub. L. 95–600, title III, § 362(d)(7), Nov. 6, 1978, 92 Stat. 2852, substituted in item 859 ‘‘Adoption of annual accounting period’’ for ‘‘Deduction of deficiency divi- dends’’ and struck out item 860 ‘‘Adoption of annual ac- counting period’’. 1976—Pub. L. 94–455, title XVI, §§ 1601(a)(2), 1604(i)(2), Oct. 4, 1976, 90 Stat. 1745, 1752, added items 859 and 860. 1960—Pub. L. 86–779, § 10(a), Sept. 14, 1960, 74 Stat. 1003, added part II analysis. § 856. Definition of real estate investment trust (a) In general For purposes of this title, the term ‘‘real es- tate investment trust’’ means a corporation, trust, or association— (1) which is managed by one or more trustees or directors; (2) the beneficial ownership of which is evi- denced by transferable shares, or by transfer- able certificates of beneficial interest; (3) which (but for the provisions of this part) would be taxable as a domestic corporation; (4) which is neither (A) a financial institu- tion referred to in section 582(c)(2), nor (B) an insurance company to which subchapter L ap- plies; (5) the beneficial ownership of which is held by 100 or more persons; (6) subject to the provisions of subsection (k), which is not closely held (as determined under subsection (h)); and (7) which meets the requirements of sub- section (c). (b) Determination of status The conditions described in paragraphs (1) to (4), inclusive, of subsection (a) must be met dur- ing the entire taxable year, and the condition described in paragraph (5) must exist during at least 335 days of a taxable year of 12 months, or during a proportionate part of a taxable year of less than 12 months. (c) Limitations A corporation, trust, or association shall not be considered a real estate investment trust for any taxable year unless— (1) it files with its return for the taxable year an election to be a real estate investment trust or has made such election for a previous taxable year, and such election has not been terminated or revoked under subsection (g); (2) at least 95 percent (90 percent for taxable years beginning before January 1, 1980) of its gross income (excluding gross income from prohibited transactions) is derived from— (A) dividends; (B) interest; (C) rents from real property; (D) gain from the sale or other disposition of stock, securities, and real property (in- cluding interests in real property and inter- ests in mortgages on real property) which is not property described in section 1221(a)(1); (E) abatements and refunds of taxes on real property; (F) income and gain derived from fore- closure property (as defined in subsection (e)); (G) amounts (other than amounts the de- termination of which depends in whole or in part on the income or profits of any person) received or accrued as consideration for en- tering into agreements (i) to make loans se- cured by mortgages on real property or on interests in real property or (ii) to purchase or lease real property (including interests in real property and interests in mortgages on real property); (H) gain from the sale or other disposition of a real estate asset which is not a prohib- ited transaction solely by reason of section 857(b)(6); and (I) mineral royalty income earned in the first taxable year beginning after the date of the enactment of this subparagraph from real property owned by a timber real estate