Source: http://taxtv.com/code/00893-USCODE-2011-title26-subtitleA-chap6-subchapA-sec1503/
Timestamp: 2017-06-27 03:43:04
Document Index: 230479414

Matched Legal Cases: ['§1503', '§1503', '§1503', '§1052', '§2', '§234', '§1031', '§1507', '§1901', '§211', '§1249', '§10222', '§1012', '§2004', '§7201', '§11802', '§11802', '§11813', '§7821', '§7207', '§7201', '§1012', '§2004', '§2004', '§2004', '§211', '§211', '§1052', '§1052', '§1031', '§1901', '§1507', '§234', '§234', '§234', '§234', '§2004', '§1503']

IRC §1503. Computation and payment of tax - TaxTV.com
IRC §1503. Computation and payment of tax
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(a) [General rule] 1
[(b) Repealed. Pub. L. 94–455, title X, §1052(c)(5), Oct. 4, 1976, 90 Stat. 1648]
(2) Dual consolidated loss
Solely for purposes of determining gain or loss on the disposition of intragroup stock and the amount of any inclusion by reason of an excess loss account, in determining the adjustments to the basis of such intragroup stock on account of the earnings and profits of any member of an affiliated group for any consolidated year (and in determining the amount in such account)—
(A) such earnings and profits shall be determined as if section 312 were applied for such taxable year (and all preceding consolidated years of the member with respect to such group) without regard to subsections (k) and (n) thereof, and
(B) earnings and profits shall not include any amount excluded from gross income under section 108 to the extent the amount so excluded was not applied to reduce tax attributes (other than basis in property).
(A) Intragroup stock
(i) is in a corporation which is or was a member of an affiliated group of corporations, and
(ii) is held by another corporation which is or was a member of such group.
Under regulations prescribed by the Secretary, proper adjustments shall be made in the application of paragraph (1)—
(A) in the case of any property acquired by the corporation before consolidation, for the difference between the adjusted basis of such property for purposes of computing taxable income and its adjusted basis for purposes of computing earnings and profits, and
(B) in the case of any property, for any basis adjustment under section 50(c).
In the case of any subsidiary distributing during any taxable year dividends on any applicable preferred stock—
(A) no group loss item shall be allowed to reduce the disqualified separately computed income of such subsidiary for such taxable year, and
(B) no group credit item shall be allowed against the tax imposed by this chapter on such disqualified separately computed income.
(2) Group items
(A) Group loss item
The term “group loss item” means any of the following items of any other member of the affiliated group which includes the subsidiary:
(i) Any net operating loss and any net operating loss carryover or carryback under section 172.
(ii) Any loss from the sale or exchange of any capital asset and any capital loss carryover or carryback under section 1212.
(B) Separately computed taxable income
The term “separately computed taxable income” means the separate taxable income of the subsidiary for the taxable year determined—
(i) by taking into account gains and losses from the sale or exchange of a capital asset and section 1231 gains and losses,
(ii) without regard to any net operating loss or capital loss carryover or carryback, and
(iii) with such adjustments as the Secretary may prescribe.
(D) Applicable preferred stock
The term “applicable preferred stock” means stock described in section 1504(a)(4) in the subsidiary which is—
(i) issued after November 17, 1989, and
(ii) held by a person other than a member of the same affiliated group as the subsidiary.
The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the provisions of this subsection, including regulations—
(A) to prevent the avoidance of this subsection through the transfer of built-in losses to the subsidiary,
(B) to provide rules for cases in which the subsidiary owns (directly or indirectly) stock in another member of the affiliated group, and
(C) to provide for the application of this subsection where dividends are not paid currently, where the redemption and liquidation rights of the applicable preferred stock exceed the issue price for such stock, or where the stock is otherwise structured to avoid the purposes of this subsection.
(Aug. 16, 1954, ch. 736, 68A Stat. 367; Pub. L. 86–780, §2, Sept. 14, 1960, 74 Stat. 1011; Pub. L. 88–272, title II, §234(a), (b)(1), (2), Feb. 26, 1964, 78 Stat. 113; Pub. L. 94–455, title X, §§1031(b)(4), 1052(c)(5), title XV, §1507(b)(3), title XIX, §1901(b)(1)(Y), Oct. 4, 1976, 90 Stat. 1623, 1648, 1740, 1792; Pub. L. 98–369, div. A, title II, §211(b)(19), July 18, 1984, 98 Stat. 756; Pub. L. 99– 4, title XII, §1249(a), Oct. 22, 1986, 100 Stat. 2584; Pub. L. 100–203, title X, §10222(a)(1), Dec. 22, 1987, 101 Stat. 1330–410; Pub. L. 100–647, title I, §1012(u), title II, §2004(j)(1)(A), (2), (3)(A), Nov. 10, 1988, 102 Stat. 3528, 3604, 3605; Pub. L. 101–239, title VII, §§7201(a), 7207(a), 7821(c), Dec. 19, 1989, 103 Stat. 2328, 2337, 2424; Pub. L. 101–508, title XI, §§11802(f)(4), 11813(b)(25), Nov. 5, 1990, 104 Stat. 1388–530, 1388–555.)
1990—Subsec. (c)(1). Pub. L. 101–508, §11802(f)(4), struck out at end “For taxable years ending with or within calendar year 1981, ‘25 percent’ shall be substituted for ‘35 percent’ each place it appears in the first sentence of this subsection. For taxable years ending with or within calendar year 1982, ‘30 percent’ shall be substituted for ‘35 percent’ each place it appears in that sentence.”
Subsec. (e)(3)(B). Pub. L. 101–508, §11813(b)(25), substituted “section 50(c)” for “section 48(q)”.
1989—Subsec. (e)(2)(A)(ii). Pub. L. 101–239, §7821(c), substituted “another corporation which is or was a member” for “another member”.
Subsec. (e)(4). Pub. L. 101–239, §7207(a), added par. (4).
Subsec. (f). Pub. L. 101–239, §7201(a), added subsec. (f).
1988—Subsec. (d)(3), (4). Pub. L. 100–647, §1012(u), added pars. (3) and (4).
Subsec. (e)(1). Pub. L. 100–647, §2004(j)(1)(A), amended introductory provisions generally. Prior to amendment, introductory provisions read as follows: “Solely for purposes of determining gain or loss on the disposition of intragroup stock, in determining the adjustments to the basis of such intragroup stock on account of the earnings and profits of any member of an affiliated group for any consolidated year—”.
Subsec. (e)(2)(C). Pub. L. 100–647, §2004(j)(3)(A), added subpar. (C).
Subsec. (e)(3). Pub. L. 100–647, §2004(j)(2), added par. (3).
1984—Subsec. (c). Pub. L. 98–369, §211(b)(19)(A), (C), substituted “section 801” for “section 802” in heading, and wherever appearing in text.
Subsec. (c)(1). Pub. L. 98–369, §211(b)(19)(B), struck out provision that for purposes of this subsection, in determining the taxable income of each insurance company subject to tax under section 802, section 802(b)(3) would not be taken into account.
1976—Subsec. (a). Pub. L. 94–455, §1052(c)(5), struck out subsec. (a) designation.
Subsec. (b). Pub. L. 94–455, §1052(c)(5), struck out subsec. (b) which provided for a special rule for application of foreign tax credit when overall limitation applies.
Subsec. (b)(1). Pub. L. 94–455, §1031(b)(4), struck out “and if for the taxable year an election under section 904(b)(1) (relating to election of overall limitation on foreign tax credit) is in effect” after “section 921)”.
Subsec. (b)(3)(C). Pub. L. 94–455, §1901(b)(1)(Y), struck out subpar. (C) which defined “consolidated taxable income”.
Subsec. (c). Pub. L. 94–455, §1507(b)(3), added subsec. (c).
1964—Subsec. (a). Pub. L. 88–272, §234(a), struck out provisions which increased the tax imposed under section 11(c), or section 831, by 2% of the consolidated taxable income of the affiliated group of includible corporations, and defined “consolidated taxable income”.
Subsec. (b). Pub. L. 88–272, §234(b)(1), (2), redesignated subsec. (d) as (b), and substituted references to section 7701 for references to former subsection (c) of this section, in subpar. (A), and definition of “consolidated taxable income” for provisions relating to the computation of tax, for purposes of par. (1)(A), on the portion of consolidated taxable income attributable to any corporation, without regard to the increase of 2% as in subsec. (a), in subpar. (C). Former subsec. (b), which limited the 2% increase in subsec. (a) in cases where the affiliated group included one or more Western Hemisphere trade corporations or one or more regulated public utilities, to the amount by which the consolidated taxable income of the affiliated group exceed the income attributable to such corporations and utilities, was struck out.
Subsec. (c). Pub. L. 88–272, §234(b)(1), struck out subsec. (c) which defined regulated public utility. See section 7701(a)(33) of this title.
Subsec. (d). Pub. L. 88–272, §234(b)(1), redesignated subsec. (d) as (b).
Section 7201(b) of Pub. L. 101–239 provided that:
“(1) In general.—The amendment made by this section [amending this section] shall apply to taxable years ending after November 17, 1989.
“(2) Binding contract exception.—For purposes of section 1503(f)(3)(D) of the Internal Revenue Code of 1986, stock issued after November 17, 1989, pursuant to a written binding contract in effect on November 17, 1989, and at all times thereafter before such issuance, shall be treated as issued on November 17, 1989.
“(3) Special rule when subsidiary leaves group.—If, by reason of a transaction after November 17, 1989, a corporation ceases to be, or becomes, a member of an affiliated group, the stock of such corporation shall be treated, for purposes of section 1503(f)(3)(D) of such Code, as issued on the date of such cessation or commencement, unless such transaction is of a kind which would not result in the recognition of any deferred intercompany gain under the consolidated return regulations by reason of the acquisition of the entire group.
“(A) Except as provided in subparagraph (B), if stock issued before November 18, 1989, (or described in paragraph (2)), is retired or acquired after November 17, 1989, by the corporation or another member of the same affiliated group, such stock shall be treated, for purposes of section 1503(f)(3)(D) of such Code, as issued on the date of such retirement or acquisition.
“(B) Subparagraph (A) shall not apply to any retirement or acquisition pursuant to an obligation to reissue under a binding written contract in effect on November 17, 1989, and at all times thereafter before such retirement or acquisition.
“(5) Auction rate preferred.—For purposes of section 1503(f)(3)(D) of such Code, auction rate preferred stock shall be treated as issued when the contract requiring the auction became binding.
“(6) Special rule for certain auction rate preferred.—For purposes of section 1503(f)(3)(D) of the Internal Revenue Code of 1986, any auction rate preferred stock shall be treated as issued before November 18, 1989, if—
“(A) a subsidiary was incorporated before July 10, 1989 for the special purpose of issuing such stock,
“(B) a rating agency was retained before July 10, 1989, and
“(C) such stock is issued before the date 30 days after the date of the enactment of this Act [Dec. 19, 1989].”
Section 7207(b) of Pub. L. 101–239 provided that:
“(1) In general.—Except as provided in paragraph (2), the amendment made by subsection (a) [amending this section] shall apply to dispositions after July 10, 1989, in taxable years ending after such date.
“(2) Binding contract.—The amendment made by subsection (a) shall not apply to any disposition pursuant to a written binding contract in effect on July 10, 1989, and at all times thereafter before such disposition.”
Amendment by section 1012(u) of Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99– 4, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title.
Section 10222(a)(2) of Pub. L. 100–203, as amended by Pub. L. 100–647, title II, §2004(j)(1)(B), Nov. 10, 1988, 102 Stat. 3604, provided that:
“(A) In general.—Except as provided in subparagraph (B), the amendment made by paragraph (1) [amending this section] shall apply to any intragroup stock disposed of after December 15, 1987. For purposes of determining the adjustments to the basis of such stock, such amendment shall be deemed to have been in effect for all periods whether before, on, or after December 15, 1987.
“(B) Exception.—The amendment made by paragraph (1) shall not apply to any intragroup stock disposed of after December 15, 1987, and before January 1, 1989, if such disposition is pursuant to a written binding contract, governmental order, letter of intent or preliminary agreement, or stock acquisition agreement, in effect on or before December 15, 1987.
“(I) any disposition on or before December 15, 1987, of stock resulted in an inclusion of an excess loss account (or would have so resulted if the amendments made by paragraph (1) had applied to such disposition), and
“(II) there is an unrecaptured amount with respect to such disposition,
“(ii) Special rules.—For purposes of this subparagraph—
“(I) Unrecaptured amount.—The term ‘unrecaptured amount’ means the amount by which the inclusion referred to in clause (i)(I) would have been increased if the amendment made by paragraph (1) and [had] applied to the disposition.
“(II) Coordination with binding contract exception.—A disposition shall be treated as occurring on or before December 15, 1987, if the amendment made by paragraph (1) does not apply to such disposition by reason of subparagraph (B).”
Section 1249(b) of Pub. L. 99– 4 provided that: “The amendment made by subsection (a) [amending this section] shall apply to net operating losses for taxable years beginning after December 31, 1986.”
Section 234(c) of Pub. L. 88–272 provided that: “The amendments made by subsections (a) and (b) [amending this section and sections 12, 172, 904, 1341, 1552, and 7701 of this title] shall apply with respect to taxable years beginning after December 31, 1963.”
1 Subsec. (a) heading editorially supplied.
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