Source: https://uscode.house.gov/view.xhtml?req=(title:26%20section:864%20edition:prelim)
Timestamp: 2020-08-12 16:49:46
Document Index: 307203237

Matched Legal Cases: ['§ 864', '§102', '§1901', '§123', '§1201', '§1810', '§10242', '§1012', '§7111', '§11401', '§101', '§13234', '§1162', '§532', '§4', '§101', '§401', '§894', '§3093', '§15', '§551', '§216', '§2122', '§13501', '§401', '§13206', '§401', '§401', '§13501', '§15', '§3093', '§894', '§13234', '§1012', '§1012', '§1215', '§127', '§1901', '§13501', '§14502', '§216', '§551', '§15', '§3093', '§401', '§403', '§403', '§403', '§894', '§1162', '§101', '§11401', '§1215', '§1012', '§521', '§521', '§521', '§1223', '§1242', '§123', '§2']

[USC02] 26 USC 864: Definitions and special rules
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26 USC 864: Definitions and special rules Text contains those laws in effect on August 11, 2020
For purposes of this part, part II, and chapter 3, the term "trade or business within the United States" includes the performance of personal services within the United States at any time within the taxable year, but does not include-
The performance of personal services-
(2) Periodical, etc., income from sources within United States-factors
In determining whether income from sources within the United States of the types described in section 871(a)(1), section 871(h), section 881(a), or section 881(c), or whether gain or loss from sources within the United States from the sale or exchange of capital assets, is effectively connected with the conduct of a trade or business within the United States, the factors taken into account shall include whether-
(B) Income, gain, or loss from sources without the United States shall be treated as effectively connected with the conduct of a trade or business within the United States by a nonresident alien individual or a foreign corporation if such person has an office or other fixed place of business within the United States to which such income, gain, or loss is attributable and such income, gain, or loss-
(D) No income from sources without the United States shall be treated as effectively connected with the conduct of a trade or business within the United States if it either-
For purposes of subparagraph (B) of paragraph (4)-
For purposes of this title, in the case of any income or gain of a nonresident alien individual or a foreign corporation which-
For purposes of this title, if-
The amount determined under this subparagraph with respect to any partnership interest sold or exchanged-
(i) in the case of any gain on the sale or exchange of the partnership interest, is-
(ii) in the case of any loss on the sale or exchange of the partnership interest, is-
For purposes of this subsection, the term "trade or service receivable" means any account receivable or evidence of indebtedness arising out of-
For purposes of this subsection, the term "related person" means-
Any income of a controlled foreign corporation (within the meaning of section 957(a)) from a loan to a person for the purpose of financing-
Paragraph (1) shall not apply to any trade or service receivable acquired by any person from a related person if-
For purposes of allocating and apportioning expenses on the basis of assets, the adjusted basis of any stock in a nonaffiliated 10-percent owned corporation shall be-
For purposes of this paragraph, the term "nonaffiliated 10-percent owned corporation" means any corporation if-
Except as provided in subparagraph (B), the term "affiliated group" has the meaning given such term by section 1504. Notwithstanding the preceding sentence, a foreign corporation shall be treated as a member of the affiliated group if-
A corporation is described in this subparagraph if-
To the extent provided in regulations-
The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section, including regulations providing-
For purposes of this subchapter, at the election of the worldwide affiliated group-
The taxable income of the domestic members of a worldwide affiliated group from sources outside the United States shall be determined by allocating and apportioning the interest expense of such domestic members to such income in an amount equal to the excess (if any) of-
For purposes of this paragraph, the term "worldwide affiliated group" means a group consisting of-
If a worldwide affiliated group elects the application of this subsection, all financial corporations which-
In the case of a corporation which is a member of an electing financial institution group, to the extent that such corporation-
(i) distributes dividends or makes other distributions with respect to its stock after the date of the enactment of this paragraph to any member of the pre-election worldwide affiliated group (other than to a member of the electing financial institution group) in excess of the greater of-
The Secretary shall prescribe such regulations as may be appropriate to carry out this subsection, including regulations-
(B) In the case of any qualified research and experimental expenditures (not allocated under subparagraph (A)) to the extent-
Any qualified research and experimental expenditures described in subparagraph (B)-
For purposes of subparagraph (A), qualified research and experimental expenditures are described in this subparagraph if such expenditures are attributable to activities conducted-
(B) For purposes of the allocation and apportionment required by paragraph (1)-
(Aug. 16, 1954, ch. 736, 68A Stat. 278 ; Pub. L. 89–809, title I, §102(d), Nov. 13, 1966, 80 Stat. 1544 ; Pub. L. 94–455, title XIX, §1901(a)(113), Oct. 4, 1976, 90 Stat. 1783 ; Pub. L. 98–369, div. A, title I, §§123(a), 127(c), July 18, 1984, 98 Stat. 644 , 651; Pub. L. 99–514, title XII, §§1201(d)(4), 1211(b)(2), 1215(a), (b)(1), 1221(a)(2), 1223(b)(1), 1242(a), (b), 1275(c)(7), title XVIII, §§1810(c)(2), (3), 1899A(21), Oct. 22, 1986, 100 Stat. 2525 , 2536, 2544, 2545, 2550, 2558, 2580, 2599, 2824, 2959; Pub. L. 100–203, title X, §10242(b), Dec. 22, 1987, 101 Stat. 1330–423 ; Pub. L. 100–647, title I, §1012(a)(1)(B), (d)(7), (10), (g)(5), (h)(1), (2)(A), (3)–(6), (p)(30), (r), Nov. 10, 1988, 102 Stat. 3494 , 3498, 3499, 3501-3503, 3521, 3525; Pub. L. 101–239, title VII, §7111, Dec. 19, 1989, 103 Stat. 2326 ; Pub. L. 101–508, title XI, §11401(a), Nov. 5, 1990, 104 Stat. 1388–472 ; Pub. L. 102–227, title I, §101(a), Dec. 11, 1991, 105 Stat. 1686 ; Pub. L. 103–66, title XIII, §13234, Aug. 10, 1993, 107 Stat. 504 ; Pub. L. 105–34, title XI, §1162(a), Aug. 5, 1997, 111 Stat. 987 ; Pub. L. 106–170, title V, §532(c)(2)(N)–(P), Dec. 17, 1999, 113 Stat. 1931 ; Pub. L. 106–519, §4(3), Nov. 15, 2000, 114 Stat. 2432 ; Pub. L. 108–357, title I, §101(b)(6), title IV, §§401(a), (b), 403(b)(6), 413(c)(12), title VIII, §894(a), Oct. 22, 2004, 118 Stat. 1423 , 1488, 1491, 1494, 1507, 1647; Pub. L. 110–289, div. C, title III, §3093(a), (b), July 30, 2008, 122 Stat. 2912 ; Pub. L. 111–92, §15(a), (b), Nov. 6, 2009, 123 Stat. 2996 ; Pub. L. 111–147, title V, §551(a), Mar. 18, 2010, 124 Stat. 117 ; Pub. L. 111–226, title II, §216(a), Aug. 10, 2010, 124 Stat. 2400 ; Pub. L. 111–240, title II, §2122(c), Sept. 27, 2010, 124 Stat. 2568 ; Pub. L. 115–97, title I, §§13501(a), 14502(a), Dec. 22, 2017, 131 Stat. 2138 , 2235; Pub. L. 115–141, div. U, title IV, §401(a)(152), (d)(1)(D)(x), (xvii)(IV), (V), Mar. 23, 2018, 132 Stat. 1191 , 1207, 1208.)
Section 174, referred to in subsec. (g)(2), was amended generally by Pub. L. 115–97, title I, §13206(a), Dec. 22, 2017, 131 Stat. 2111 . Provisions similar to those contained in former subsec. (c) of section 174 are now contained in subsec. (c)(1) of section 174. For provisions similar to those contained in former subsec. (b) of section 174 relating to amortization of certain research and experimental expenditures, see subsecs. (a) and (b) of section 174.
Section 936, referred to in subsec. (g)(4)(B), (C), was repealed by Pub. L. 115–141, div. U, title IV, §401(d)(1)(C), Mar. 23, 2018, 132 Stat. 1206 .
2018-Subsec. (d)(5). Pub. L. 115–141, §401(d)(1)(D)(x), amended par. (5) generally. Prior to amendment, par. (5) related to certain provisions that did not apply to any amount treated as interest under par. (1) or (6).
2017-Subsec. (c)(1)(A). Pub. L. 115–97, §13501(a)(2)(A), substituted "(7), and (8)" for "and (7)".
2010-Subsec. (c)(4)(B)(ii). Pub. L. 111–240 substituted "dividends, interest, or amounts received for the provision of guarantees of indebtedness" for "dividends or interest".
Subsec. (e)(5)(A). Pub. L. 111–226 inserted at end "Notwithstanding the preceding sentence, a foreign corporation shall be treated as a member of the affiliated group if-" and added cls. (i) and (ii).
2009-Subsec. (f)(5)(D), (6). Pub. L. 111–92, §15(a), substituted "December 31, 2017" for "December 31, 2010".
2008-Subsec. (f)(5)(D), (6). Pub. L. 110–289, §3093(a), substituted "December 31, 2010" for "December 31, 2008".
2004-Subsec. (c)(4)(B). Pub. L. 108–357, §894(a), added concluding provisions.
2000-Subsec. (e)(3). Pub. L. 106–519 designated existing provisions as subpar. (A), inserted heading, and added subpar. (B).
1999-Subsecs. (c)(4)(B)(iii), (d)(3)(A), (6)(A). Pub. L. 106–170 substituted "section 1221(a)(1)" for "section 1221(1)".
1997-Subsec. (b)(2)(A)(ii). Pub. L. 105–34 struck out ", or in the case of a corporation (other than a corporation which is, or but for section 542(c)(7), 542(c)(10), or 543(b)(1)(C) would be, a personal holding company) the principal business of which is trading in stocks or securities for its own account, if its principal office is in the United States" after "dealer in stocks or securities".
1993-Subsec. (f)(1)(B). Pub. L. 103–66, §13234(a), substituted "50 percent" for "64 percent" in cls. (i) and (ii).
"(A) In general.-This subsection shall apply to the taxpayer's first 3 taxable years beginning after August 1, 1989, and on or before August 1, 1992.
"(B) Reduction.-Notwithstanding subparagraph (A), in the case of the taxpayer's first taxable year beginning after August 1, 1991, this subsection shall only apply to qualified research and experimental expenditures incurred during the first 6 months of such taxable year."
1991-Subsec. (f)(5). Pub. L. 102–227 amended par. (5) generally. Prior to amendment, par. (5) read as follows: "This subsection shall apply to the taxpayer's first 2 taxable years beginning after August 1, 1989, and on or before August 1, 1991."
1990-Subsec. (f)(5). Pub. L. 101–508 substituted "Years" for "Year" in heading and amended text generally. Prior to amendment, text read as follows:
"(A) In general.-Except as provided in this paragraph, this subsection shall apply to the taxpayer's first taxable year beginning after August 1, 1989, and before August 2, 1990.
"(B) Reduction.-Notwithstanding subparagraph (A), this subsection shall only apply to that portion of the qualified research and experimental expenditures for the taxable year referred to in subparagraph (A) which bears the same ratio to the total amount of such expenditures as-
1988-Subsec. (b)(2)(A)(ii). Pub. L. 100–647, §1012(p)(30), substituted "section 542(c)(7), 542(c)(10)," for "section 542(c)(7)".
Subsec. (e)(4). Pub. L. 100–647, §1012(h)(1), substituted "nonaffiliated 10-percent owned corporations" for "certain corporations" in heading and amended text generally. Prior to amendment, text read as follows: "For purposes of allocating and apportioning expenses on the basis of assets, the adjusted basis of any asset which is stock in a corporation which is not included in the affiliated group and in which members of the affiliated group own 10 percent or more of the total combined voting power of all classes of stock entitled to vote in such corporation shall be-
1987-Subsec. (c)(4)(C). Pub. L. 100–203 inserted "or part II" after "part I".
1986-Pub. L. 99–514, §1215(b)(1), inserted "and special rules" in section catchline.
1984-Subsec. (c)(2). Pub. L. 98–369, §127(c), substituted "section 871(a)(1), section 871(h) section 881(a), or section 881(c)" for "section 871(a)(1) or section 881(a)".
1976-Subsec. (a). Pub. L. 94–455, §1901(a)(113)(A), substituted in heading "Produced" for "Sale, etc." and struck out in text provisions relating to the definition of sale and sold.
1966-Pub. L. 89–809 designated existing provisions as subsec. (a) and added subsecs. (b) and (c).
Pub. L. 115–97, title I, §13501(c)(1), Dec. 22, 2017, 131 Stat. 2141 , provided that: "The amendments made by subsection (a) [amending this section] shall apply to sales, exchanges, and dispositions on or after November 27, 2017."
Pub. L. 115–97, title I, §14502(b), Dec. 22, 2017, 131 Stat. 2235 , provided that: "The amendment made by this section [amending this section] shall apply to taxable years beginning after December 31, 2017."
Pub. L. 111–226, title II, §216(b), Aug. 10, 2010, 124 Stat. 2400 , provided that: "The amendment made by this section [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [Aug. 10, 2010]."
Pub. L. 111–147, title V, §551(b), Mar. 18, 2010, 124 Stat. 117 , provided that: "The amendments made by this section [amending this section] shall take effect on the date of the enactment of this Act [Mar. 18, 2010]."
Pub. L. 111–92, §15(c), Nov. 6, 2009, 123 Stat. 2996 , provided that: "The amendments made by this section [amending this section] shall apply to taxable years beginning after December 31, 2010."
Pub. L. 110–289, div. C, title III, §3093(c), July 30, 2008, 122 Stat. 2912 , provided that: "The amendments made by this section [amending this section] shall apply to taxable years beginning after December 31, 2008."
Pub. L. 108–357, title IV, §401(c), Oct. 22, 2004, 118 Stat. 1491 , provided that: "The amendments made by this section [amending this section] shall apply to taxable years beginning after December 31, 2008."
Pub. L. 108–357, title IV, §403(c), Oct. 22, 2004, 118 Stat. 1494 , provided that: "The amendments made by this section [amending this section and section 904 of this title] shall apply to taxable years beginning after December 31, 2002."
Pub. L. 108–357, title IV, §403(d), as added by Pub. L. 109–135, title IV, §403(l), Dec. 21, 2005, 119 Stat. 2625 , provided that: "If the taxpayer elects (at such time and in such form and manner as the Secretary of the Treasury may prescribe) to have the rules of this subsection apply-
Pub. L. 108–357, title VIII, §894(b), Oct. 22, 2004, 118 Stat. 1647 , provided that: "The amendment made by this section [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [Oct. 22, 2004]."
Pub. L. 105–34, title XI, §1162(b), Aug. 5, 1997, 111 Stat. 987 , provided that: "The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after December 31, 1997."
Pub. L. 102–227, title I, §101(b), Dec. 11, 1991, 105 Stat. 1686 , provided that: "The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after August 1, 1989."
Pub. L. 101–508, title XI, §11401(b), Nov. 5, 1990, 104 Stat. 1388–472 , provided that: "The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after August 1, 1989."
Pub. L. 99–514, title XII, §1215(c), Oct. 22, 1986, 100 Stat. 2545 , as amended by Pub. L. 100–647, title I, §1012(h)(7), Nov. 10, 1988, 102 Stat. 3504 ; Pub. L. 104–191, title V, §521(a), Aug. 21, 1996, 110 Stat. 2103 , provided that:
"(1) In general.-Except as otherwise provided in this subsection, the amendments made by this section [amending this section] shall apply to taxable years beginning after December 31, 1986.
"(2) Transitional rules.-
"(A) General phase-in.-
"(i) In general.-In the case of the 1st 3 taxable years of the taxpayer beginning after December 31, 1986, the amendments made by this section shall not apply to interest expenses paid or accrued by the taxpayer during the taxable year with respect to an aggregate amount of indebtedness which does not exceed the general phase-in amount.
"(ii) General phase-in amount.-Except as provided in clause (iii), the general phase-in amount for purposes of clause (i) is the applicable percentage (determined under the following table) of the aggregate amount of indebtedness of the taxpayer outstanding on November 16, 1985:
"(iii) Lower limit where taxpayer reduces indebtedness.-For purposes of applying this subparagraph to interest expenses attributable to any month, the general phase-in amount shall in no event exceed the lowest amount of indebtedness of the taxpayer outstanding as of the close of any preceding month beginning after November 16, 1985. To the extent provided in regulations, the average amount of indebtedness outstanding during any month shall be used (in lieu of the amount outstanding as of the close of such month) for purposes of the preceding sentence.
"(B) Consolidation rule not to apply to certain interest.-
"(i) In general.-In the case of the 1st 5 taxable years of the taxpayer beginning after December 31, 1986-
"(ii) Special phase-in amount.-The special phase-in amount for purposes of clause (i) is the sum of-
"(iii) 5-year phase-in amount.-The 5-year phase-in amount is the lesser of-
"(iv) 4-year phase-in amount.-The 4-year phase-in amount is the lesser of-
"(v) 5-year debt amount.-The term '5-year debt amount' means the excess (if any) of-
"(vi) 4-year debt amount.-The term '4-year debt amount' means the excess (if any) of-
"(vii) Paydowns.-For purposes of applying this subparagraph to interest expenses attributable to any month, the term 'paydowns' means the excess (if any) of-
"(C) Coordination of subparagraphs (a) and (b).-In applying subparagraph (B), there shall first be taken into account indebtedness to which subparagraph (A) applies.
"(iii) Indebtedness outstanding on may 29, 1985.-Indebtedness is described in this clause if it is indebtedness (which was outstanding on May 29, 1985) of a corporation incorporated on June 13, 1917, which has its principal place of business in Bartlesville, Oklahoma.
"(iv) Indebtedness outstanding on may 29, 1985.-Indebtedness is described in this clause if it is indebtedness (which was outstanding on May 29, 1985) of a member of an affiliated group (as defined in section 1504(a) [of the Internal Revenue Code of 1986]), the common parent of which was incorporated on August 26, 1926, and has its principal place of business in Harrison, New York.
"(E) Treatment of affiliated group.-For purposes of this paragraph, all members of the same affiliated group of corporations (as defined in section 864(e)(5)(A) of the Internal Revenue Code of 1986, as added by this section) shall be treated as 1 taxpayer whether or not such members filed a consolidated return.
"(F) Election to have paragraph not apply.-A taxpayer may elect (at such time and in such manner as the Secretary of the Treasury or his delegate may prescribe) to have this paragraph not apply. In the case of members of the same affiliated group (as so defined), such an election may be made only if each member consents to such election.
"(A) In general.-In the case of a qualified corporation, in lieu of applying paragraph (2), the amendments made by this section shall not apply to interest expenses allocable to any indebtedness to the extent such indebtedness does not exceed $500,000,000 if-
"(B) Qualified corporation.-For purposes of subparagraph (A), the term 'qualified corporation' means a corporation-
"(4) Special rules for subsidiary.-The amendments made by this section shall not apply to interest on up to the applicable dollar amount of indebtedness of a subsidiary incorporated on February 11, 1975, the indebtedness of which on May 6, 1986, included-
"[(5) Repealed. Pub. L. 104–191, title V, §521(a), Aug. 21, 1996, 110 Stat. 2103 .]
"(6) Special rules for allocating general and administrative expenses.-
"(A) In general.-In the case of an affiliated group of domestic corporations the common parent of which has its principal office in New Brunswick, New Jersey, and has a certificate of organization which was filed with the Secretary of the State of New Jersey on November 10, 1887, the amendments made by this section shall not apply to the phase-in percentage of general and administrative expenses paid or incurred in its 1st 3 taxable years beginning after December 31, 1986.
[ Pub. L. 104–191, title V, §521(b), Aug. 21, 1996, 110 Stat. 2103 , provided that:
["(1) In general.-The amendment made by this section [amending section 1215(c) of Pub. L. 99–514, set out above] shall apply to taxable years beginning after December 31, 1995.
["(2) Special rule.-In the case of the first taxable year beginning after December 31, 1995, the pre-effective date portion of the interest expense of the corporation referred to in such paragraph (5) of such section 1215(c) [of Pub. L. 99–514] for such taxable year shall be allocated and apportioned without regard to such amendment. For purposes of the preceding sentence, the pre-effective date portion is the amount which bears the same ratio to the interest expense for such taxable year as the number of days during such taxable year before the date of the enactment of this Act [Aug. 21, 1996] bears to 366."]
Pub. L. 99–514, title XII, §1223(c), Oct. 22, 1986, 100 Stat. 2558 , provided that: "The amendments made by this section [amending this section and sections 881 and 954 of this title] shall apply to taxable years beginning after December 31, 1986."
Pub. L. 99–514, title XII, §1242(c), Oct. 22, 1986, 100 Stat. 2580 , provided that: "The amendments made by this section [amending this section] shall apply to taxable years beginning after December 31, 1986."
Pub. L. 98–369, div. A, title I, §123(c), July 18, 1984, 98 Stat. 646 , as amended by Pub. L. 99–514, §2, Oct. 22, 1986, 100 Stat. 2095 , provided that:
"(1) In general.-Except as provided in paragraph (2), the amendments made by this section [amending this section and section 956 of this title] shall apply to accounts receivable and evidences of indebtedness transferred after March 1, 1984, in taxable years ending after such date.
"(2) Transitional rule.-The amendments made by this section shall not apply to accounts receivable and evidences of indebtedness acquired after March 1, 1984, and before March 1, 1994, by a Belgian corporation in existence on March 1, 1984, in any taxable year ending after such date, but only to the extent that the amount includible in gross income by reason of section 956 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] with respect to such corporation for all such taxable years is not reduced by reason of this paragraph by more than the lesser of-