Source: http://taxtv.com/code/00342-USCODE-2011-title26-subtitleA-chap1-subchapD-partI-subpartA-sec407/
Timestamp: 2017-11-20 15:39:27
Document Index: 78020886

Matched Legal Cases: ['§407', '§407', '§407', '§1401', '§220', '§5', '§1016', '§1906', '§321', '§491', '§1112', '§1852', '§1011', '§7811', '§521', '§1401', '§1401', '§7831', '§1114', '§1114', '§7831', '§1852', '§491', '§491', '§491', '§491', '§1016', '§2005']

IRC §407. Certain employees of domestic subsidiaries engaged in business outside the United States - TaxTV.com
IRC §407. Certain employees of domestic subsidiaries engaged in business outside the United States
View related content: IRC §407
(a) Treatment as employees of domestic parent corporation
(A) the plan of such domestic parent corporation expressly provides for contributions or benefits for individuals who are citizens or residents of the United States and who are employees of its domestic subsidiaries; and
(B) contributions under a funded plan of deferred compensation (whether or not a plan described in section 401(a) or 403(a)) are not provided by any other person with respect to the remuneration paid to such individual by the domestic subsidiary.
(A) Domestic subsidiary
(i) such corporation is a domestic corporation 80 percent or more of the outstanding voting stock of which is owned by another domestic corporation;
(ii) 95 percent or more of its gross income for the three-year period immediately preceding the close of its taxable year which ends on or before the close of the taxable year of such other domestic corporation (or for such part of such period during which the corporation was in existence), was derived from sources without the United States; and
(iii) 90 percent or more of its gross income for such period (or such part) was derived from the active conduct of a trade or business.
(B) Domestic parent corporation
(A) if such individual is a highly compensated employee (within the meaning of section 414(q)), he shall be treated as having such capacity with respect to such domestic parent corporation; and
(B) the determination of whether such individual is a highly compensated employee (as so defined) shall be made by treating such individual’s total compensation (determined with the application of paragraph (2) of this subsection) as compensation paid by such domestic parent corporation and by determining such individual’s status with regard to such domestic parent corporation.
[(c) Repealed. Pub. L. 104–188, title I, §1401(b)(8), Aug. 20, 1996, 110 Stat. 1789]
(1) except as provided in paragraph (2), no deduction shall be allowed to such domestic parent corporation or to any other corporation which is entitled to deduct its contributions under such sections,
(2) there shall be allowed as a deduction to the domestic subsidiary of which such individual is an employee an amount equal to the amount which (but for paragraph (1)) would be deductible under section 404 by the domestic parent corporation if he were an employee of the domestic parent corporation, and
(Added Pub. L. 88–272, title II, §220(b), Feb. 26, 1964, 78 Stat. 60; amended Pub. L. 91–172, title V, §5(c)(3), Dec. 30, 1969, 83 Stat. 646; Pub. L. 93–406, title II, §§1016(a)(5), 2005(c)(13), Sept. 2, 1974, 88 Stat. 929, 992; Pub. L. 94–455, title XIX, §1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 98–21, title III, §321(d), Apr. 20, 1983, 97 Stat. 119; Pub. L. 98–369, div. A, title IV, §491(d)(16)–(18), July 18, 1984, 98 Stat. 850; Pub. L. 99– 4, title XI, §§1112(d)(3), 1114(b)(9)(B), (C), title XVIII, §1852(e)(2)(D), Oct. 22, 1986, 100 Stat. 2445, 24 , 2868; Pub. L. 100–647, title I, §1011A(b)(1)(C), (16), Nov. 10, 1988, 102 Stat. 3472, 3475; Pub. L. 101–239, title VII, §§7811(g)(3), 7831(f), Dec. 19, 1989, 103 Stat. 2409, 2427; Pub. L. 102–318, title V, §521(b)(15), July 3, 1992, 106 Stat. 311; Pub. L. 104–188, title I, §§1401(b)(8), 1402(b)(2), Aug. 20, 1996, 110 Stat. 1789, 1790.)
1996—Subsec. (c). Pub. L. 104–188, §1401(b)(8), struck out subsec. (c) which related to treatment of termination of status as deemed employee.
1989—Subsec. (b)(1)(A). Pub. L. 101–239, §7831(f), made technical correction to Pub. L. 99– 4, §1114(b)(9)(B), see 1986 Amendment note below.
Subsec. (b)(1)(A). Pub. L. 99– 4, §1114(b)(9)(B), as amended by Pub. L. 101–239, §7831(f), substituted “a highly compensated employee (within the meaning of section 414(q))” for “an officer, shareholder, or person whose principal duties consist in supervising the work of other employees of a domestic subsidiary”.
Subsec. (e)(5). Pub. L. 99– 4, §1852(e)(2)(D), struck out par. (5) which read as follows: “Section 2 7 (relating to certain annuities under qualified plans).”
1984—Subsec. (a)(1). Pub. L. 98–369, §491(d)(16), substituted “or an annuity plan described in section 403(a)” for “, an annuity plan described in section 403(a), or a bond purchase plan described in section 405(a)”.
Subsec. (a)(1)(B). Pub. L. 98–369, §491(d)(17), substituted “or 403(a)” for “, 403(a), or 405(a)”.
Subsec. (d). Pub. L. 98–369, §491(d)(18)(A), (B), substituted in introductory provision “section 404” for “sections 404 and 405(a)”, and “or annuity” for “annuity, or bond purchase”.
Subsec. (d)(2). Pub. L. 98–369, §491(d)(18)(C), struck out “(or section 405(c))” after “section 404”.
1983—Subsec. (a)(1). Pub. L. 98–21 inserted “or resident” after “citizen”, and inserted “or residents” after “citizens” in subpar. (A).
1976—Subsec. (b)(2). Pub. L. 94–455 struck out “or his delegate” after “Secretary”.
1974—Subsec. (b)(1). Pub. L. 93–406, §1016(a)(5), substituted “section 401(a)(4) and section 410(b) (without regard to paragraph (1)(A) thereof)” for “paragraphs (3)(B) and (4) of section 401(a)”.
Subsec. (c). Pub. L. 93–406, §2005(c)(13), substituted “subsections (a)(2) and (e) of section 402” for “section 72(n), section 402(a)(2)”.
Amendment by section 1401(b)(8) of Pub. L. 104–188 applicable to taxable years beginning after Dec. 31, 1999, with retention of certain transition rules, see section 1401(c) of Pub. L. 104–188, set out as a note under section 402 of this title.
Amendment by section 1114(b)(9)(B), (C) of Pub. L. 99– 4 applicable to years beginning after Dec. 31, 1988, see section 1114(c)(3) of Pub. L. 99– 4, set out as a note under section 414 of this title.
Amendment by section 1852(e)(2)(D) of Pub. L. 99– 4 applicable to transfers after Oct. 22, 1986, see section 1852(e)(2)(E) of Pub. L. 99– 4, set out as a note under section 406 of this title.
Amendment by Pub. L. 98–21 applicable to plans established after Apr. 20, 1983, except that at the election of any domestic parent corporation such amendment shall also apply to any plan established on or before Apr. 20, 1983, see section 321(f) of Pub. L. 98–21 set out as a note under section 406 of this title.
Amendment by section 1016(a)(5) of Pub. L. 93–406 applicable, except as otherwise provided in section 1017(c) through (i) of Pub. L. 93–406, for plan years beginning after Sept. 2, 1974, but, in the case of plans in existence on Jan. 1, 1974, amendment by Pub. L. 93–406 applicable for plan years beginning after Dec. 31, 1975, see section 1017 of Pub. L. 93–406, set out as an Effective Date; Transitional Rules note under section 410 of this title.
Amendment by section 2005(c)(13) of Pub. L. 93–406 applicable only with respect to distributions or payments made after Dec. 31, 1973, in taxable years beginning after Dec. 31, 1973, see section 2005(d) of Pub. L. 93–406, set out as a note under section 402 of this title.
Section applicable to taxable years ending after Dec. 31, 1963, see section 220(d) of Pub. L. 88–272, set out as a note under section 406 of this title.