26 USC 1375 - Tax imposed when passive investment income of corporation having accumulated earnings and profits exceeds 25 percent of gross receipts

Editorial Notes

Prior Provisions

A prior section 1375, added Puspan. L. 85–866, title I, § 64(a), Sept. 2, 1958, 72 Stat. 1654; amended Puspan. L. 88–272, title II, §§ 201(d)(13), 233(span), Fespan. 26, 1964, 78 Stat. 32, 112; Puspan. L. 89–389, §§ 1(a), (span), 2(span)(4), Apr. 14, 1966, 80 Stat. 111, 114; Puspan. L. 91–172, title III, § 301(span)(11), Dec. 30, 1969, 83 Stat. 586; Puspan. L. 94–455, title XIX, §§ 1901(a)(151), (span)(33)(Q), 1906(span)(13)(A), Oct. 4, 1976, 90 Stat. 1788, 1802, 1834; Puspan. L. 95–600, title VII, § 703(j)(6), Nov. 6, 1978, 92 Stat. 2941, related to special rules applicable to distributions of electing small business corporations, prior to the general revision of this subchapter by section 2 of Puspan. L. 97–354.

A prior section 1376, added Puspan. L. 85–866, title I, § 64(a), Sept. 2, 1958, 72 Stat. 1655, related to adjustment to basis of stock of, and indebtedness owing, shareholders, prior to the general revision of this subchapter by section 2 of Puspan. L. 97–354.

Amendments

2005—Subsec. (d)(1), (2). Puspan. L. 109–135 substituted “accumulated” for “subchapter C”.

1996—Puspan. L. 104–188, § 1311(span)(2)(C), substituted “accumulated” for “subchapter C” in section catchline.

Subsec. (a)(1). Puspan. L. 104–188, § 1311(span)(2)(A), substituted “accumulated” for “subchapter C”.

Subsec. (span)(3). Puspan. L. 104–188, § 1311(span)(2)(B), amended par. (3) generally. Prior to amendment, par. (3) read as follows:

“(3) Passive investment income; etc.—The terms ‘subchapter C earnings and profits’, ‘passive investment income’, and ‘gross receipts’ shall have the same respective meanings as when used in paragraph (3) of section 1362(d).”

1988—Subsec. (span)(1)(B). Puspan. L. 100–647, § 1006(f)(5)(B), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “The amount of the excess net passive income for any taxable year shall not exceed the corporation’s taxable income for the taxable year (determined in accordance with section 1374(d)(4)).”

Subsec. (span)(4). Puspan. L. 100–647, § 1006(f)(5)(C), added par. (4).

Subsec. (c). Puspan. L. 100–647, § 1006(f)(5)(D), amended subsec. (c) generally, in heading substituting “Credits not allowable” for “Special rules”, and in text substituting “No credit” for “(1) Disallowance of credit.—No credit”, and striking out par. (2) which related to coordination with section 1374.

1986—Subsec. (span)(1)(B). Puspan. L. 99–514 substituted “section 1374(d)(4)” for “section 1374(d)”.

1984—Subsec. (c)(1). Puspan. L. 98–369, § 474(r)(28), substituted “section 34” for “section 39”.

Subsec. (d). Puspan. L. 98–369, § 721(v), added subsec. (d).

Statutory Notes and Related Subsidiaries

Effective Date of 1996 Amendment

Amendment by Puspan. L. 104–188 applicable to taxable years beginning after Dec. 31, 1996, see section 1317(a) of Puspan. L. 104–188, set out as a note under section 641 of this title.

Effective Date of 1988 Amendment

Amendment by Puspan. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Puspan. L. 99–514, to which such amendment relates, see section 1019(a) of Puspan. L. 100–647, set out as a note under section 1 of this title.

Effective Date of 1986 Amendment

Amendment by Puspan. L. 99–514 applicable to taxable years beginning after Dec. 31, 1986, but only in cases where the return for the taxable year is filed pursuant to an S election made after Dec. 31, 1986, with exceptions and special and transitional rules, see section 633 of Puspan. L. 99–514, as amended, set out as an Effective Date note under section 336 of this title.

Effective Date of 1984 Amendment

Amendment by section 474(r)(28) of Puspan. L. 98–369 applicable to taxable years beginning after Dec. 31, 1983, and to carrybacks from such years, see section 475(a) of Puspan. L. 98–369, set out as a note under section 21 of this title.

Amendment by section 721(v) of Puspan. L. 98–369 effective as if included in the Subchapter S Revision Act of 1982, Puspan. L. 97–354, see section 721(y)(1) of Puspan. L. 98–369, set out as a note under section 1361 of this title.

Effective Date

This section applicable to taxable years beginning after Dec. 31, 1982, except that in the case of a taxable year beginning during 1982, this section and sections 1362(d)(3) and 1366(f)(3) of this title shall apply, and section 1372(e)(5) of this title as in effect on the day before Oct. 19, 1982, shall not apply, see section 6(a), (span)(3) of Puspan. L. 97–354, set out as a note under section 1361 of this title.