Source: https://irc.bloombergtax.com/public/uscode/doc/irc/section_1362
Timestamp: 2019-10-19 00:28:34
Document Index: 383660726

Matched Legal Cases: ['§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362', '§ 1362']

Internal Revenue Code, § 1362. Election; Revocation; Termination
I.R.C. § 1362(a) Election
I.R.C. § 1362(a)(1) In General —
I.R.C. § 1362(a)(2) All Shareholders Must Consent To Election —
I.R.C. § 1362(b) When Made
I.R.C. § 1362(b)(1) In General —
I.R.C. § 1362(b)(1)(A) —
I.R.C. § 1362(b)(1)(B) —
I.R.C. § 1362(b)(2) Certain Elections Made During 1st 21/2 Months Treated As Made For Next Taxable Year —
I.R.C. § 1362(b)(2)(A) —
I.R.C. § 1362(b)(2)(B) —
I.R.C. § 1362(b)(2)(B)(i) —
I.R.C. § 1362(b)(2)(B)(ii) —
I.R.C. § 1362(b)(3) Election Made After 1st 2 1/2 Months Treated As Made For Following Taxable Year —
I.R.C. § 1362(b)(3)(A) —
I.R.C. § 1362(b)(3)(B) —
I.R.C. § 1362(b)(4) Taxable Years Of 2 1/2 Months Or Less —
I.R.C. § 1362(b)(5) Authority To Treat Late Elections, Etc., As Timely —
I.R.C. § 1362(b)(5)(A) —
I.R.C. § 1362(b)(5)(B) —
I.R.C. § 1362(c) Years For Which Effective —
I.R.C. § 1362(d) Termination
I.R.C. § 1362(d)(1) By Revocation
I.R.C. § 1362(d)(1)(A) In General —
I.R.C. § 1362(d)(1)(B) More Than One-Half Of Shares Must Consent To Revocation —
I.R.C. § 1362(d)(1)(C) When Effective —
I.R.C. § 1362(d)(1)(C)(i) —
I.R.C. § 1362(d)(1)(C)(ii) —
I.R.C. § 1362(d)(1)(D) Revocation May Specify Prospective Date —
I.R.C. § 1362(d)(2) By Corporation Ceasing To Be Small Business Corporation
I.R.C. § 1362(d)(2)(A) In General —
I.R.C. § 1362(d)(2)(B) When Effective —
I.R.C. § 1362(d)(3) Where Passive Investment Income Exceeds 25 Percent Of Gross Receipts For 3 Consecutive Taxable Years And Corporation Has Accumulated Earnings And Profits
I.R.C. § 1362(d)(3)(A) Termination
I.R.C. § 1362(d)(3)(A)(i) In General —
I.R.C. § 1362(d)(3)(A)(i)(I) —
I.R.C. § 1362(d)(3)(A)(i)(II) —
I.R.C. § 1362(d)(3)(A)(ii) When Effective —
I.R.C. § 1362(d)(3)(A)(iii) Years Taken Into Account —
I.R.C. § 1362(d)(3)(A)(iii)(I)
I.R.C. § 1362(d)(3)(A)(iii)(II)
I.R.C. § 1362(d)(3)(B) Gross Receipts From The Sales Of Certain Assets —
I.R.C. § 1362(d)(3)(B)(i) —
I.R.C. § 1362(d)(3)(B)(ii) —
I.R.C. § 1362(d)(3)(C) Passive Investment Income Defined
I.R.C. § 1362(d)(3)(C)(i) In General —
I.R.C. § 1362(d)(3)(C)(ii) Exception For Interest On Notes From Sales Of Inventory —
The term “passive investment income” shall not include interest on any obligation acquired in the ordinary course of the corporation's trade or business from its sale of property described in section 1221(a)(1).
I.R.C. § 1362(d)(3)(C)(iii) Treatment Of Certain Lending Or Finance Companies —
I.R.C. § 1362(d)(3)(C)(iv) Treatment Of Certain Dividends —
I.R.C. § 1362(d)(3)(C)(v) Exception For Banks, Etc. —
In the case of a bank (as defined in section 581) or a depository institution holding company (as defined in section 3(w)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1813(w)(1))), the term “passive investment income” shall not include—
I.R.C. § 1362(d)(3)(C)(v)(I) —
I.R.C. § 1362(d)(3)(C)(v)(II) —
I.R.C. § 1362(e) Treatment Of S Termination Year
I.R.C. § 1362(e)(1) In General —
I.R.C. § 1362(e)(1)(A) S Short Year —
I.R.C. § 1362(e)(1)(B) C Short Year —
I.R.C. § 1362(e)(2) Pro Rata Allocation —
I.R.C. § 1362(e)(2)(A) —
first by determining for the S termination year—
I.R.C. § 1362(e)(2)(A)(i) —
I.R.C. § 1362(e)(2)(A)(ii) —
I.R.C. § 1362(e)(2)(B) —
I.R.C. § 1362(e)(3) Election To Have Items Assigned To Each Short Taxable Year Under Normal Tax Accounting Rules
I.R.C. § 1362(e)(3)(A) In General —
I.R.C. § 1362(e)(3)(B) Shareholders Must Consent To Election —
I.R.C. § 1362(e)(4) S Termination Year —
I.R.C. § 1362(e)(5) Tax For C Short Year Determined On Annualized Basis
I.R.C. § 1362(e)(5)(A) In General —
I.R.C. § 1362(e)(5)(B) Section 443(d)(2) To Apply —
I.R.C. § 1362(e)(6) Other Special Rules —
I.R.C. § 1362(e)(6)(A) Short Years Treated As 1 Year For Carryover Purposes —
I.R.C. § 1362(e)(6)(B) Due Date For S Year —
I.R.C. § 1362(e)(6)(C) Paragraph (2) Not To Apply To Items Resulting From Section 338 —
I.R.C. § 1362(e)(6)(D) Pro Rata Allocation For S Termination Year Not To Apply If 50-Percent Change In Ownership —
I.R.C. § 1362(f) Inadvertent Invalid Elections Or Terminations —
I.R.C. § 1362(f)(1) —
an election under subsection (a) or section 1361(b)(3)(B)(ii) by any corporation—
I.R.C. § 1362(f)(1)(A) —
I.R.C. § 1362(f)(1)(B) —
I.R.C. § 1362(f)(2) —
I.R.C. § 1362(f)(3) —
no later than a reasonable period of time after discovery of the circumstances resulting in such ineffectiveness or termination, steps were taken--
I.R.C. § 1362(f)(3)(A) —
I.R.C. § 1362(f)(3)(B) —
I.R.C. § 1362(f)(4) —
I.R.C. § 1362(g) Election After Termination —
(Added Pub. L. 97-354, 2, Oct. 19, 1982, 96 Stat. 1672, and amended Pub. L. 98-369, div. A, title I, 102(d)(2), title VII, 721(g), (h), (l), (t), July 18, 1984, 98 Stat. 623, 968, 969, 971; Pub. L. 100-647, title I, 1006(f)(6), 1007(g)(9), Nov. 10, 1988, 102 Stat. 3406, 3435; Pub. L. 104-188, title I, Sec. 1305, 1308, 1305, 1308, 1311, 1316, 1317, Aug. 20, 1996, 110 Stat. 1755; Pub. L. 106-170, title V, Sec. 532(c), Dec. 17, 1999, 113 Stat. 1860; Pub. L. 108-357, title, II, Sec. 231(b), 238(a), Oct. 22, 2004, 118 Stat. 1418; Pub. L. 109-135, title IV, Sec. 413(b), Dec. 21, 2005, 119 Stat. 2577; Pub. L. 110-28, title VIII, Sec. 8231(a), May 25, 2007, 121 Stat. 112; Pub. L. 110-172, Sec. 11(a)(25), Dec. 29, 2007, 121 Stat. 2473; Pub. L. 113-295, Div. A, title II, Sec. 221(a)(88), Dec. 19, 2014, 128 Stat. 4010; Pub. L. 115-141, Div. U, title IV, Sec. 401(a)(190)-(191), Mar. 23, 2018, 132 Stat. 348.)
2018 — Subsec. (d)(3)(C)(v). Pub. L. 115-141, Div. U, Sec. 401(a)(190), amended clause (v) by substituting ‘‘1813(w)(1))),’’ for ‘‘1813(w)(1)),’’.
Subsec. (f). Pub. L. 115-141, Div. U, Sec. 401(a)(191), amended subsec. (f), by substituting “may be, during” for “may be during”.
2014 — Subsec. (d)(3)(A)(iii). Pub. L. 113-295, Div. A, Sec. 221(a)(88), amended clause (iii) by substituting “unless the corporation was an S corporation for such taxable year” for “unless—(I) such taxable year began after December 31, 1981, and (II) the corporation was an S corporation for such taxable year.”
2007 — Subsec. (f)(1). Pub. L. 110-172, Sec. 11(a)(25)(A), amended par. (1) by substituting “or section 1361(b)(3)(B)(ii)” for “, section 1361(b)(3)(B)(ii), or section 1361(c)(1)(A)(ii)”.
Subsec. (f)(1)(B). Pub. L. 110-172, Sec. 11(a)(25)(B), amended subpar. (B) by substituting “or section 1361(b)(3)(C)” for “, section 1361(b)(3)(C), or section 1361(c)(1)(D)(iii)”.
Subsec. (d)(3)(B)-(F). Pub. L. 110-28, Sec. 8231(a), struck subpar. (B)-(F) and added new subpar. (B) and (C). Before being struck, they read as follows:
“(B) Gross receipts from sales of capital assets (other than stock and securities)
“For purposes of this paragraph, in the case of dispositions of capital assets (other than stock and securities), gross receipts from such dispositions shall be taken into account only to the extent of the capital gain net income therefrom.
“For purposes of this paragraph--
“Except as otherwise provided in this subparagraph, the term “passive investment income” means gross receipts derived from royalties, rents, dividends, interest, annuities, and sales or exchanges of stock or securities (gross receipts from such sales or exchanges being taken into account for purposes of this paragraph only to the extent of gains therefrom).
“(ii) Exception for interest on notes from sales of inventory
“The term “passive investment income” shall not include interest on any obligation acquired in the ordinary course of the corporation's trade or business from its sale of property described in section 1221(a)(1).
“(iii) Treatment of certain lending or finance companies
“If the S corporation meets the requirements of section 542(c)(6) for the taxable year, the term “passive investment income” shall not include gross receipts for the taxable year which are derived directly from the active and regular conduct of a lending or finance business (as defined in section 542(d)(1)).
“(iv) Treatment of certain liquidations
“Gross receipts derived from sales or exchanges of stock or securities shall not include amounts received by an S corporation which are treated under section 331 (relating to corporate liquidations) as payments in exchange for stock where the S corporation owned more than 50 percent of each class of stock of the liquidating corporation.
“(D) Special rule for options and commodity dealings
“In the case of any options dealer or commodities dealer, passive investment income shall be determined by not taking into account any gain or loss (in the normal course of the taxpayer's activity of dealing in or trading section 1256 contracts) from any section 1256 contract or property related to such a contract.
“(ii) Definitions
“For purposes of this subparagraph--
“(I) Options dealer
“(II) Commodities dealer
“The term “commodities dealer” means a person who is actively engaged in trading section 1256 contracts and is registered with a domestic board of trade which is designated as a contract market by the Commodities Futures Trading Commission.
“(III) Section 1256 contract
“The term “section 1256 contract” has the meaning given to such term by section 1256(b).
“(E) Treatment of certain dividends
“If an S corporation holds stock in a C corporation meeting the requirements of section 1504(a)(2), the term ‘passive investment income’ shall not include dividends from such C corporation to the extent such dividends are attributable to the earnings and profits of such C corporation derived from the active conduct of a trade or business.
“(F) EXCEPTION FOR BANKS; ETC.-
“In the case of a bank (as defined in section 581), a depository institution holding company (as defined in section 3(w)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1813(w)(1)), the term ‘passive investment income’ shall not include--
“(i) interest income earned by such bank or company, or
“(ii) dividends on assets required to be held by such bank or company, including stock in the Federal Reserve Bank, the Federal Home Loan Bank, or the Federal Agricultural Mortgage Bank or participation certificates issued by a Federal Intermediate Credit Bank.”
2005 - Subsec. (d)(3)(F). Pub. L. 109-135, Sec. 413(b), amended subpar. (F) by substituting “a depository institution holding company (as defined in section 3(w)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1813(w)(1))" for “a bank holding company (within the meaning of section 2(a) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(a))), or a financial holding company (within the meaning of section 2(p) of such Act)”.
2004 — Subsec. (d)(3)(F). Pub. L. 108-357, Sec. 237(a), amended par. (3) by adding subpar. (F).
Subsec. (f). Pub. L. 108-357, Sec. 238(a)(5), amended subsec. (f) by inserting “or a qualified subchapter S subsidiary, as the case may be” after S corporation” in the matter following par. (4).
Subsec. (f)(1). Pub. L. 108-357, Sec. 238(a)(1), amended par. (1) by inserting “, section 1361(b)(3)(B)(ii),” after “subsection (a)”.
Subsec. (f)(1). Pub. L. 108-357, Sec. 231(b)(1), amended par. (1) by inserting “or section 1361(c)(1)(A)(ii)” after “section 1361(b)(3)(B)(ii)”.
Subsec. (f)(1)(B). Pub. L. 108-357, Sec. 238(a)(2), amended subpar. (B) by inserting “, section 1361(b)(3)(C),” after “subsection (d)”.
Subsec. (f)(1)(B). Pub. L. 108-357, Sec. 231(b)(2), amended subpar. (B) by inserting “or section 1361(c)(1)(D)(iii)” after “section 1361(b)(3)(C)”.
Subsec. (f)(3)(A). Pub. L. 108-357, Sec. 238(a)(3), amended subpar. (A). Prior to amendment it read as follows:
“(A) so that the corporation is a small business corporation, or”.
Subsec. (f)(4). Pub. L. 108-357, Sec. 238(a)(4), amended par. (4). Prior to amendment it read as follows:
“(4) the corporation, and each person who was a shareholder in the corporation at any time during the period specified pursuant to this subsection, agrees to make such adjustments (consistent with the treatment of the corporation as an S corporation) as may be required by the Secretary with respect to such period,”.
1999 — Subsec. (d)(3)(C)(ii). Pub. L. 106-170, Sec. 532(c)(2)(T), substituted “section 1221(a)(1)” for “section 1221(1)”.
1996 — Subsec. (b)(5). Pub. L. 104-188, 1305, added par. (5).
Subsec. (d)(3). Pub. L. 104-188, 1311, substituted “accumulated” for “subchapter C” in the heading; substituted “accumulated” for “subchapter C” in subpar. (A)(i)(I); struck subpar. (B); and redesignated the following subparagraphs accordingly. Before amendment, subpar. (B) read as follows:
“(B) Subchapter C earnings and profits.--For purposes of subparagraph (A), the term “subchapter C earnings and profits” means earnings and profits of any corporation for any taxable year with respect to which an election under section 1362(a) (or under section 1372 of prior law) was not in effect.”
Subsec. (d)(3)(F) (before redesignation as (E)). Pub. L. 104-188, 1308, added subpar. (F).
Subsec. (f). Pub. L. 104-188, 1305, amended subsec. (f). Before amendment, subsec. (f) read as follows:
“(f) Inadvertent terminations.--If--
(1) an election under subsection (a) by any corporation was terminated under paragraph (2) or (3) of subsection (d),
(2) the Secretary determines that the termination was inadvertent,
(3) no later than a reasonable period of time after discovery of the event resulting in such termination, steps were taken so that the corporation is once more a small business corporation, and
(4) the corporation, and each person who was a shareholder of the corporation at any time during the period specified pursuant to this subsection, agrees to make such adjustments (consistent with the treatment of the corporation as an S corporation) as may be required by the Secretary with respect to such period, then, notwithstanding the terminating event, such corporation shall be treated as continuing to be an S corporation during the period specified by the Secretary.”
1988 — Subsec. (d)(3)(D)(v). Pub. L. 100-647, 1006(f)(6)(A), struck out cl. (v) which related to special rule for options and commodities dealers.
Subsec. (d)(3)(E). Pub. L. 100-647, 1006(f)(6)(B), added subpar. (E).
Subsec. (e)(5)(B). Pub. L. 100-647, 1007(g)(9), substituted “Subsection (d)" for “Subsection (d)(2)”.
1984 — Subsec. (b)(3)(B). Pub. L. 98-369, 721(l)(2), substituted “on or before the 15th day of the 3rd month of the following taxable year” for “on or before the last day of such taxable year”.
Subsec. (b)(4). Pub. L. 98-369, 721(l)(1), added par. (4).
Subsec. (d)(3)(D)(v). Pub. L. 98-369, 102(d)(2), added cl. (v).
Subsec. (e)(2). Pub. L. 98-369, 721(g)(2), substituted “as provided in paragraph (3) and subparagraphs (C) and (D) of paragraph (6)” for “as provided in paragraph (3)”.
Subsec. (e)(3)(B). Pub. L. 98-369, 721(h), struck out “All” in heading, and substituted “subsection” for “paragraph” and “S short year and all persons who are shareholders in the corporation on the first day of the C short year” for “S termination year” in text.
Subsec. (e)(6)(C). Pub. L. 98-369, 721(g)(1), added subpar. (C).
Subsec. (e)(6)(D). Pub. L. 98-369, 721(t), added subpar. (D).
Amendments by Pub. L. 115-141, Div. U, Sec. 401(a)(190)-(191), effective March 23, 2018.
Amendment by Pub. L. 113-295, Div. A, Sec. 221(a)(88), effective on the date of the enactment of this Act [Enacted: Dec. 19, 2014].
Amendments by Sec. 11(a)(25) of Pub. L. 110-172 effective on the date of the enactment of this Act [Enacted: Dec. 29, 2007].
Amendments by Sec. 8231(a) of Pub. L. 110-28 effective for taxable years beginning after the date of the enactment of this Act [Enacted: May 25, 2007].
Amendment by Sec. 413(b) of Pub. L. 109-135 effective as if included in the provisions of the American Jobs Creation Act of 2004 [Pub. L. 108-357, Sec. 237] to which it relates.
Amendments by Sec. 231 of Pub. L. 108-357 effective for elections and terminations made after December 31, 2004.
Amendment by Sec. 237 of Pub. L. 108-357 effective for taxable years beginning after December 31, 2004.
Amendments by Sec. 238 of Pub. L. 108-357 effective for elections and terminations made after December 31, 2004.
Amendment by Sec. 532(c)(2)(T) of Pub. L. 106-170 shall apply to any instrument held, acquired, or entered into, any transaction entered into, and supplies held or acquired on or after enactment date of this Act [Enacted: Dec. 17, 1999].
Amendment by Pub. L. 104-188, 1305, effective with respect to elections for taxable years beginning after December 31, 1982.
Amendment by Pub. L. 104-188, 1308 and 1311, effective for taxable years for beginning after December 31, 1996. Sec. 1317(b) provided the following special rule:
Amendment by section 102(d)(2) of Pub. L. 98-369 applicable to positions established after July 18, 1984, in taxable years ending after that date except as otherwise provided, see section 102(f), (g) of Pub. L. 98-369, set out as a note under section 1256 of this title.
Amendment by section 721(g), (h), (l), (t) of Pub. L. 98-369 effective as if included in the Subchapter S Revision Act of 1982, Pub. L. 97-354, except that amendment by section 721(g)(1) is not applicable to certain qualified stock purchases, amendment by section 721(l) is applicable to any election under this section (or any corresponding provision of prior law) made after Oct. 19, 1982, and amendment by section 721(t) is not applicable to certain S termination years, see section 721(y) of Pub. L. 98-369, set out as a note under section 1361 of this title.
Section applicable to taxable years beginning after Dec. 31, 1982, except that in the case of a taxable year beginning during 1982, subsec. (d)(3) of this section and sections 1366(f)(3) and 1375 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), (b)(3) of Pub. L. 97-354, set out as a note under section 1361 of this title. For additional provisions relating to the treatment of certain elections under prior law for purposes of subsec. (g) of this section, see section 6(e) of Pub. L. 97-354, set out as a note under section 1361 of this title.
Section 1317(b) of Pub. L. 104-188 provided that, “For purposes of section 1362(g) of the Internal Revenue Code of 1986 (relating to election after termination), any termination under section 1362(d) of such Code in a taxable year beginning before January 1, 1997, shall not be taken into account.”
Section 102(d)(3) of Pub. L. 98-369, as amended by Pub. L. 99-514, 2, title XVIII, 1808(a)(2), Oct. 22, 1986, 100 Stat. 2095, 2817, provided that: “If a commodities dealer or an options dealer--
“(A) becomes a small business corporation (as defined in section 1361(b) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954 ]) at any time before the close of the 75th day after the date of the enactment of this Act [July 18, 1984], and
“(B) makes the election under section 1362(a) of such Code before the close of such 75th day, then such dealer shall be treated as having received approval for and adopted a taxable year beginning on the first day during 1984 on which it was a small business corporation (as so defined) or such other day as may be permitted under regulations and ending on the date determined under section 1378 of such Code and such election shall be effective for such taxable year.”