26 U.S.C. § 999 — Reports by taxpayers; determinations

Page 2247 TITLE 26—INTERNAL REVENUE CODE § 999 Dec. 31, 1976, see section 1901(d) of Pub. L. 94–455, set out as a note under section 2 of this title. PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989 For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§ 1101–1147 and 1171–1177] or title XVIII [§§ 1800–1899A] of Pub. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99–514, as amended, set out as a note under section 401 of this title. § 997. Special subchapter C rules For purposes of applying the provisions of sub- chapter C of chapter 1, any distribution in prop- erty to a corporation by a DISC or former DISC which is made out of previously taxed income or accumulated DISC income shall— (1) be treated as a distribution in the same amount as if such distribution of property were made to an individual, and (2) have a basis, in the hands of the recipient corporation, equal to the amount determined under paragraph (1). (Added Pub. L. 92–178, title V, § 501, Dec. 10, 1971, 85 Stat. 549.) PART V—INTERNATIONAL BOYCOTT DETERMINATIONS Sec. 999. Reports by taxpayers; determinations. [1000. Reserved.] Editorial Notes AMENDMENTS 1976—Pub. L. 94–455, title X, § 1064(a), Oct. 4, 1976, 90 Stat. 1650, added part heading and analysis of sections. § 999. Reports by taxpayers; determinations (a) International boycott reports by taxpayers (1) Report required If any person, or a member of a controlled group (within the meaning of section 993(a)(3)) which includes that person, has operations in, or related to— (A) a country (or with the government, a company, or a national of a country) which is on the list maintained by the Secretary under paragraph (3), or (B) any other country (or with the govern- ment, a company, or a national of that coun- try) in which such person or such member had operations during the taxable year if such person (or, if such person is a foreign corporation, any United States shareholder of that corporation) knows or has reason to know that participation in or co-operation with an international boycott is required as a condition of doing business within such country or with such government, company, or national, that person or shareholder (within the mean- ing of section 951(b)) shall report such oper- ations to the Secretary at such time and in such manner as the Secretary prescribes, ex- cept that in the case of a foreign corporation such report shall be required only of a United States shareholder (within the meaning of such section) of such corporation. (2) Participation and cooperation; request therefor A taxpayer shall report whether he, a for- eign corporation of which he is a United States shareholder, or any member of a con- trolled group which includes the taxpayer or such foreign corporation has participated in or cooperated with an international boycott at any time during the taxable year, or has been requested to participate in or cooperate with such a boycott, and, if so, the nature of any operation in connection with which there was participation in or cooperation with such boy- cott (or there was a request to participate or cooperate). (3) List to be maintained The Secretary shall maintain and publish not less frequently than quarterly a current list of countries which require or may require participation in or cooperation with an inter- national boycott (within the meaning of sub- section (b)(3)). (b) Participation in or cooperation with an inter- national boycott (1) General rule If the person or a member of a controlled group (within the meaning of section 993(a)(3)) which includes the person participates in or cooperates with an international boycott in the taxable year, all operations of the tax- payer or such group in that country and in any other country which requires participation in or cooperation with the boycott as a condition of doing business within that country, or with the government, a company, or a national of that country, shall be treated as operations in connection with which such participation or cooperation occurred, except to the extent that the person can clearly demonstrate that a particular operation is a clearly separate and identifiable operation in connection with which there was no participation in or co- operation with an international boycott. (2) Special rule (A) Nonboycott operations A clearly separate and identifiable oper- ation of a person, or of a member of the con- trolled group (within the meaning of section 993(a)(3)) which includes that person, in or related to any country within the group of countries referred to in paragraph (1) shall not be treated as an operation in or related to a group of countries associated in car- rying out an international boycott if the person can clearly demonstrate that he, or that such member, did not participate in or cooperate with the international boycott in connection with that operation. (B) Separate and identifiable operations A taxpayer may show that different oper- ations within the same country, or oper- ations in different countries, are clearly sep- arate and identifiable operations. Page 2248 TITLE 26—INTERNAL REVENUE CODE § 999 (3) Definition of boycott participation and co- operation For purposes of this section, a person par- ticipates in or cooperates with an inter- national boycott if he agrees— (A) as a condition of doing business di- rectly or indirectly within a country or with the government, a company, or a national of a country— (i) to refrain from doing business with or in a country which is the object of the boy- cott or with the government, companies, or nationals of that country; (ii) to refrain from doing business with any United States person engaged in trade in a country which is the object of the boy- cott or with the government, companies, or nationals of that country; (iii) to refrain from doing business with any company whose ownership or manage- ment is made up, all or in part, of individ- uals of a particular nationality, race, or religion, or to remove (or refrain from se- lecting) corporate directors who are indi- viduals of a particular nationality, race, or religion; or (iv) to refrain from employing individ- uals of a particular nationality, race, or religion; or (B) as a condition of the sale of a product to the government, a company, or a national of a country, to refrain from shipping or in- suring that product on a carrier owned, leased, or operated by a person who does not participate in or cooperate with an inter- national boycott (within the meaning of sub- paragraph (A)). (4) Compliance with certain laws This section shall not apply to any agree- ment by a person (or such member)— (A) to meet requirements imposed by a for- eign country with respect to an inter- national boycott if United States law or reg- ulations, or an Executive Order, sanctions participation in, or cooperation with, that international boycott, (B) to comply with a prohibition on the importation of goods produced in whole or in part in any country which is the object of an international boycott, or (C) to comply with a prohibition imposed by a country on the exportation of products obtained in such country to any country which is the object of an international boy- cott. (c) International boycott factor (1) International boycott factor For purposes of sections 908(a), 952(a)(3), and 995(b)(1)(F)(ii), the international boycott fac- tor is a fraction, determined under regulations prescribed by the Secretary, the numerator of which reflects the world-wide operations of a person (or, in the case of a controlled group (within the meaning of section 993(a)(3)) which includes that person, of the group) which are operations in or related to a group of countries associated in carrying out an international boycott in or with which that person or a member of that controlled group has partici- pated or cooperated in the taxable year, and the denominator of which reflects the world- wide operations of that person or group. (2) Specifically attributable taxes and income If the taxpayer clearly demonstrates that the foreign taxes paid and income earned for the taxable year are attributable to specific operations, then, in lieu of applying the inter- national boycott factor for such taxable year, the amount of the credit disallowed under sec- tion 908(a), the addition to subpart F income under section 952(a)(3), and the amount of deemed distribution under section 995(b)(1)(F)(ii) for the taxable year, if any, shall be the amount specifically attributable to the operations in which there was partici- pation in or cooperation with an international boycott under section 999(b)(1). (3) World-wide operations For purposes of this subsection, the term ‘‘world-wide operations’’ means operations in or related to countries other than the United States. (d) Determination with respect to particular op- erations Upon a request made by the taxpayer, the Sec- retary shall issue a determination with respect to whether a particular operation of a person, or of a member of a controlled group which in- cludes that person, constitutes participation in or cooperation with an international boycott. The Secretary may issue such a determination in advance of such operation in cases which are of such a nature that an advance determination is possible and appropriate under the cir- cumstances. If the request is made before the operation is commenced, or before the end of a taxable year in which the operation is carried out, the Secretary may decline to issue such a determination before close of the taxable year. (e) Participation or cooperation by related per- sons If a person controls (within the meaning of section 304(c)) a corporation— (1) participation in or cooperation with an international boycott by such corporation shall be presumed to be such participation or cooperation by such person, and (2) participation in or cooperation with such a boycott by such person shall be presumed to be such participation or cooperation by such corporation. (f) Willful failure to report Any person (within the meaning of section 6671(b)) required to report under this section who willfully fails to make such report shall, in addition to other penalties provided by law, be fined not more than $25,000, imprisoned for not more than one year, or both. (Added Pub. L. 94–455, title X, § 1064(a), Oct. 4, 1976, 90 Stat. 1650; amended Pub. L. 95–600, title VII, § 703(h)(2), (3), Nov. 6, 1978, 92 Stat. 2940; Pub. L. 98–369, div. A, title VIII, § 802(c)(3), July 18, 1984, 98 Stat. 999; Pub. L. 99–514, title XVIII, § 1876(p)(3), Oct. 22, 1986, 100 Stat. 2902; Pub. L. 106–519, § 4(5), Nov. 15, 2000, 114 Stat. 2433; Pub. L. 108–357, title I, § 101(b)(8), Oct. 22, 2004, 118 Stat. 1423.) Page 2249 TITLE 26—INTERNAL REVENUE CODE § 1001 1 Part repealed by Pub. L. 109–135 without corresponding amendment of subchapter analysis. Editorial Notes AMENDMENTS 2004—Subsec. (c)(1). Pub. L. 108–357 struck out ‘‘941(a)(5),’’ after ‘‘sections 908(a),’’. 2000—Subsec. (c)(1). Pub. L. 106–519 inserted ‘‘941(a)(5),’’ after ‘‘908(a),’’. 1986—Subsec. (c)(1), (2). Pub. L. 99–514 repealed sec- tion 802(c)(3) of Pub. L. 98–369 thereby restoring former text. See 1984 Amendment note below. 1984—Subsec. (c)(1), (2). Pub. L. 98–369 which sub- stituted ‘‘995(b)(1)(F)(i)’’ for ‘‘995(b)(1)(F)(ii)’’ wherever appearing was repealed. See 1986 Amendment note above. 1978—Subsec. (c)(1). Pub. L. 95–600, § 703(h)(2), sub- stituted ‘‘995(b)(1)(F)(ii)’’ for ‘‘995(b)(3)’’. Subsec. (c)(2). Pub. L. 95–600, § 703(h)(3), substituted ‘‘995(b)(1)(F)(ii)’’ for ‘‘995(b)(1)(D)(ii)’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2004 AMENDMENT Amendment by Pub. L. 108–357 applicable to trans- actions after Dec. 31, 2004, see section 101(c) of Pub. L. 108–357, set out as a note under section 56 of this title. EFFECTIVE DATE OF 2000 AMENDMENT Amendment by Pub. L. 106–519 applicable to trans- actions after Sept. 30, 2000, with special rules relating to existing foreign sales corporations, see section 5 of Pub. L. 106–519, set out as a note under section 56 of this title. EFFECTIVE DATE OF 1986 AMENDMENT Amendment by Pub. L. 99–514 effective, except as oth- erwise provided, as if included in the provisions of the Tax Reform Act of 1984, Pub. L. 98–369, div. A, to which such amendment relates, see section 1881 of Pub. L. 99–514, set out as a note under section 48 of this title. EFFECTIVE DATE OF 1984 AMENDMENT Amendment by Pub. L. 98–369 applicable to trans- actions after Dec. 31, 1984, in taxable years ending after such date, see section 805(a)(1) of Pub. L. 98–369, as amended, set out as a note under section 245 of this title. EFFECTIVE DATE OF 1978 AMENDMENT Amendment by Pub. L. 95–600 effective 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 DATE Section applicable to participation in or cooperation with an international boycott more than 30 days after Oct. 4, 1976, with special provisions for existing con- tracts, see section 1066(a) of Pub. L. 94–455, set out as an Effective Date of 1976 Amendment note under sec- tion 908 of this title. PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989 For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§ 1101–1147 and 1171–1177] or title XVIII [§§ 1800–1899A] of Pub. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99–514, as amended, set out as a note under section 401 of this title. REPORTS BY THE SECRETARY Pub. L. 94–455, title X, § 1067, Oct. 4, 1976, 90 Stat. 1654, as amended by Pub. L. 98–369, div. A, title IV, § 441(c), July 18, 1984, 98 Stat. 815, which required the Secretary to transmit a report every four years to the Committee on Ways and Means of the House of Representatives and to the Committee on Finance of the Senate relat- ing to reports filed under section 999(a) of this title and describing the administration of provisions relating to international boycott activity, terminated, effective May 15, 2000, pursuant to section 3003 of Pub. L. 104–66, as amended, set out as a note under section 1113 of Title 31, Money and Finance. See, also, page 141 of House Document No. 103–7. [§ 1000. Reserved] Subchapter O—Gain or Loss on Disposition of Property Part I. Determination of amount of and recognition of gain or loss. II. Basis rules of general application. III. Common nontaxable exchanges. IV. Special rules. [V. Repealed.] [VI. Repealed.] 1 VII. Wash sales; straddles. Editorial Notes AMENDMENTS 1995—Pub. L. 104–7, § 2(c), Apr. 11, 1995, 109 Stat. 93, struck out item for part V ‘‘Changes to effectuate F.C.C. policy’’. 1990—Pub. L. 101–508, title XI, § 11801(b)(9), Nov. 5, 1990, 104 Stat. 1388–522, struck out item for part VIII ‘‘Distributions pursuant to Bank Holding Company Act’’. 1981—Pub. L. 97–34, title V, § 501(d)(3), Aug. 13, 1981, 95 Stat. 327, substituted ‘‘Wash sales; straddles’’ for ‘‘Wash sales of stock or securities’’ in item for part VII. 1976—Pub. L. 94–455, title XIX, § 1901(b)(32)(I), Oct. 4, 1976, 90 Stat. 1800, struck out item for part IX ‘‘Dis- tributions pursuant to orders enforcing the antitrust laws’’. Pub. L. 94–452, § 2(c), Oct. 2, 1976, 90 Stat. 1512, struck out ‘‘of 1956’’ after ‘‘Bank Holding Company Act’’ in item for part VIII. 1962—Pub. L. 87–403, § 1(b), Feb. 2, 1962, 76 Stat. 5, added item for part IX. 1956—Act May 9, 1956, ch. 240, § 10(b), 70 Stat. 146, added item for part VIII. PART I—DETERMINATION OF AMOUNT OF AND RECOGNITION OF GAIN OR LOSS Sec. 1001. Determination of amount of and recognition of gain or loss. [1002. Repealed.] Editorial Notes AMENDMENTS 1976—Pub. L. 94–455, title XIX, § 1901(b)(28)(B)(ii), Oct. 4, 1976, 90 Stat. 1799, struck out item 1002 ‘‘Recognition of gain or loss’’. § 1001. Determination of amount of and recogni- tion of gain or loss (a) Computation of gain or loss The gain from the sale or other disposition of property shall be the excess of the amount real- ized therefrom over the adjusted basis provided in section 1011 for determining gain, and the loss shall be the excess of the adjusted basis provided in such section for determining loss over the amount realized.