Source: https://uscode.house.gov/view.xhtml?req=granuleid%3AUSC-prelim-title26-chapter1-subchapterM-part1&saved=%7CZ3JhbnVsZWlkOlVTQy1wcmVsaW0tdGl0bGUyNi1zZWN0aW9uODUx%7C%7C%7C0%7Cfalse%7Cprelim&edition=prelim
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Document Index: 330232013

Matched Legal Cases: ['§1541', '§404', '§10', '§38', '§908', '§602', '§1901', '§2', '§701', '§547', '§1071', '§652', '§1235', '§1006', '§1271', '§331', '§201', '§205', '§14212', '§331', '§331', '§331', '§1271', '§1271', '§1271', '§1271', '§1271', '§1271', '§1271', '§1006', '§1006', '§1006', '§1006', '§1006', '§1006', '§652', '§1235', '§653', '§653', '§652', '§1901', '§1901', '§38', '§38', '§14212', '§201', '§1006', '§652', '§653', '§654', '§701', '§908', '§853', '§229', '§1906', '§655', '§1053', '§6010', '§403', '§301', '§301', '§301', '§301', '§6010', '§6010', '§1053', '§853', '§1541', '§301', '§209', '§13404', '§13404', '§54', '§13404', '§209', '§209', '§209', '§209', '§1541', '§209', '§301', '§301', '§1541', '§854', '§201', '§404', '§302', '§16', '§612', '§10221', '§1006', '§302', '§402', '§301', '§301', '§301', '§301', '§301', '§301', '§402', '§402', '§402', '§402', '§402', '§302', '§302', '§302', '§302', '§302', '§612', '§612', '§655', '§612', '§612', '§16', '§302', '§52', '§52', '§52', '§302', '§404', '§201', '§201', '§301', '§102', '§52', '§402', '§855', '§10', '§229', '§1906', '§651', '§1006', '§301', '§205', '§80', '§304', '§301', '§304', '§304', '§301', '§651', '§655', '§304']

[USC02] 26 USC Subtitle A, CHAPTER 1, Subchapter M, PART I: REGULATED INVESTMENT COMPANIES
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26 USC Subtitle A, CHAPTER 1, Subchapter M, PART I: REGULATED INVESTMENT COMPANIES
From Title 26—INTERNAL REVENUE CODESubtitle A—Income TaxesCHAPTER 1—NORMAL TAXES AND SURTAXESSubchapter M—Regulated Investment Companies and Real Estate Investment Trusts
PART I—REGULATED INVESTMENT COMPANIES
Taxation of regulated investment companies and their shareholders.
Credits from tax credit bonds allowed to shareholders.
2009—Pub. L. 111–5, div. B, title I, §1541(b)(3), Feb. 17, 2009, 123 Stat. 362, added item 853A.
1980—Pub. L. 96–223, title IV, §404(b)(7), Apr. 2, 1980, 94 Stat. 307, inserted "and taxable interest" after "dividends" in item 854 for taxable years after Dec. 31, 1980, and before Jan. 1, 1982.
1960—Pub. L. 86–779, §10(b)(1), Sept. 14, 1960, 74 Stat. 1008, inserted "and Real Estate Investment Trusts" in subchapter M heading, part I and part II designations thereunder and part I designation preceding table of sections numbered 851 to 855.
For purposes of this subtitle, the term "regulated investment company" means any domestic corporation—
(2) which is a common trust fund or similar fund excluded by section 3(c)(3) of such Act (15 U.S.C. 80a–3(c)) from the definition of "investment company" and is not included in the definition of "common trust fund" by section 584(a).
(2) The term "controls" means the ownership in a corporation of 20 percent or more of the total combined voting power of all classes of stock entitled to vote.
(3) The term "controlled group" means one or more chains of corporations connected through stock ownership with the taxpayer if—
(4) The term "value" means, with respect to securities (other than those of majority-owned subsidiaries) for which market quotations are readily available, the market value of such securities; and with respect to other securities and assets, fair value as determined in good faith by the board of directors, except that in the case of securities of majority-owned subsidiaries which are investment companies such fair value shall not exceed market value or asset value, whichever is higher.
(5) The term "outstanding voting securities of such issuer" shall include the equity securities of a qualified publicly traded partnership (as defined in subsection (h)).
For purposes of paragraph (1) the term "fund" means a segregated portfolio of assets, the beneficial interests in which are owned by the holders of a class or series of stock of the regulated investment company that is preferred over all other classes or series in respect of such portfolio of assets.
For purposes of this section, the term "qualified publicly traded partnership" means a publicly traded partnership described in section 7704(b) other than a partnership which would satisfy the gross income requirements of section 7704(c)(2) if qualifying income included only income described in subsection (b)(2)(A).
(Aug. 16, 1954, ch. 736, 68A Stat. 268; Pub. L. 85–866, title I, §38, Sept. 2, 1958, 72 Stat. 1638; Pub. L. 91–172, title IX, §908(a), Dec. 30, 1969, 83 Stat. 717; Pub. L. 94–12, title VI, §602(a)(2), Mar. 29, 1975, 89 Stat. 58; Pub. L. 94–455, title XIX, §§1901(a)(109), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1783, 1834; Pub. L. 95–345, §2(a)(3), Aug. 15, 1978, 92 Stat. 481; Pub. L. 95–600, title VII, §701(s)(1), Nov. 6, 1978, 92 Stat. 2911; Pub. L. 97–424, title V, §547(b)(1), Jan. 6, 1983, 96 Stat. 2199; Pub. L. 98–369, div. A, title X, §1071(a)(1), July 18, 1984, 98 Stat. 1049; Pub. L. 99–514, title VI, §§652(a), (b), 653(a)–(c), 654(a), title XII, §1235(f)(3), Oct. 22, 1986, 100 Stat. 2297, 2298, 2575; Pub. L. 100–647, title I, §1006(m), (n)(1), (2)(A), (B), (4), (5), (o), Nov. 10, 1988, 102 Stat. 3415, 3416; Pub. L. 105–34, title XII, §1271(a)–(b)(7), Aug. 5, 1997, 111 Stat. 1036, 1037; Pub. L. 108–357, title III, §331(a)–(d), (f), Oct. 22, 2004, 118 Stat. 1476; Pub. L. 111–325, title II, §201(a), (b), Dec. 22, 2010, 124 Stat. 3539, 3540; Pub. L. 113–295, div. A, title II, §205(e), Dec. 19, 2014, 128 Stat. 4027; Pub. L. 115–97, title I, §14212(b)(1)(B), Dec. 22, 2017, 131 Stat. 2217.)
2017—Subsec. (b). Pub. L. 115–97 substituted "section 951(a)(1)(A)" for "section 951(a)(1)(A)(i)" in concluding provisions.
2014—Subsec. (d)(2)(A). Pub. L. 113–295 inserted "of this paragraph" after "subparagraph (B)(i)" in introductory provisions.
2004—Subsec. (b). Pub. L. 108–357, §331(b), inserted "(other than a qualified publicly traded partnership as defined in subsection (h))" after "derived from a partnership" in concluding provisions.
Subsec. (b)(2). Pub. L. 108–357, §331(a), amended par. (2) generally. Prior to amendment, par. (2) read as follows: "at least 90 percent of its gross income is derived from dividends, interest, payments with respect to securities loans (as defined in section 512(a)(5)), and gains from the sale or other disposition of stock or securities (as defined in section 2(a)(36) of the Investment Company Act of 1940, as amended) or foreign currencies, or other income (including but not limited to gains from options, futures, or forward contracts) derived with respect to its business of investing in such stock, securities, or currencies; and".
Subsec. (b)(3)(B). Pub. L. 108–357, §331(f), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: "not more than 25 percent of the value of its total assets is invested in the securities (other than Government securities or the securities of other regulated investment companies) of any one issuer, or of two or more issuers which the taxpayer controls and which are determined, under regulations prescribed by the Secretary, to be engaged in the same or similar trades or businesses or related trades or businesses."
1997—Subsec. (b). Pub. L. 105–34, §1271(b)(1), in concluding provisions, substituted "paragraph (2), amounts excludable" for "paragraphs (2) and (3), amounts excludable" and struck out "In the case of the taxable year in which a regulated investment company is completely liquidated, there shall not be taken into account under paragraph (3) any gain from the sale, exchange, or distribution of any property after the adoption of the plan of complete liquidation." at end.
Subsec. (b)(2). Pub. L. 105–34, §1271(a), inserted "and" at end.
Subsec. (b)(3), (4). Pub. L. 105–34, §1271(a), redesignated par. (4) as (3) and struck out former par. (3) which read as follows: "less than 30 percent of its gross income is derived from the sale or disposition of any of the following which was held for less than 3 months:
"(A) stock or securities (as defined in section 2(a)(36) of the Investment Company Act of 1940, as amended),
"(B) options, futures, or forward contracts (other than options, futures, or forward contracts on foreign currencies), or
"(C) foreign currencies (or options, futures, or forward contracts on foreign currencies) but only if such currencies (or options, futures, or forward contracts) are not directly related to the company's principal business of investing in stock or securities (or options and futures with respect to stocks or securities), and".
Subsec. (c). Pub. L. 105–34, §1271(b)(2), substituted "subsection (b)(3)" for "subsection (b)(4)" in heading and introductory provisions.
Subsec. (d). Pub. L. 105–34, §1271(b)(3), substituted "subsections (b)(3)" for "subsections (b)(4)".
Subsec. (e)(1). Pub. L. 105–34, §1271(b)(4), substituted "subsection (b)(3)" for "subsection (b)(4)".
Subsec. (e)(4). Pub. L. 105–34, §1271(b)(5), substituted "subsections (b)(3)" for "subsections (b)(4)".
1988—Subsec. (a)(1). Pub. L. 100–647, §1006(m)(1), amended par. (1) generally. Prior to amendment, par. (1) read as follows: "which, at all times during the taxable year, is registered under the Investment Company Act of 1940, as amended (15 U.S.C. 80a–1 to 80b–2), as a management company, business development company, or unit investment trust, or".
Subsec. (b). Pub. L. 100–647, §1006(n)(1), (5), inserted at end "Income derived from a partnership or trust shall be treated as described in paragraph (2) only to the extent such income is attributable to items of income of the partnership or trust (as the case may be) which would be described in paragraph (2) if realized by the regulated investment company in the same manner as realized by the partnership or trust. In the case of the taxable year in which a regulated investment company is completely liquidated, there shall not be taken into account under paragraph (3) any gain from the sale, exchange, or distribution of any property after the adoption of the plan of complete liquidation."
Pub. L. 100–647, §1006(n)(2)(B), substituted "which are not directly related" for "which are not ancillary" in last sentence.
Subsec. (b)(3). Pub. L. 100–647, §1006(n)(2)(A), amended par. (3) generally. Prior to amendment, par. (3) read as follows: "less than 30 percent of its gross income is derived from the sale or other disposition of stock or securities held for less than 3 months; and".
Subsec. (e)(1). Pub. L. 100–647, §1006(m)(2), substituted "a management company or a business development company described in subsection (a)(1)" for "a registered management company or registered business development company".
Subsec. (g)(2)(A)(i). Pub. L. 100–647, §1006(n)(4), substituted "contractual obligation" for "contractual option".
1986—Subsec. (a)(1). Pub. L. 99–514, §652(a), substituted "as a management company, business development company, or unit investment trust" for "either as a management company or as a unit investment trust".
Subsec. (b). Pub. L. 99–514, §1235(f)(3), inserted "or 1293(a)" and "or 1293(c) (as the case may be)", in concluding provision.
Pub. L. 99–514, §653(c), inserted before last sentence "For purposes of paragraph (2), the Secretary may by regulation exclude from qualifying income foreign currency gains which are not ancillary to the company's principal business of investing in stock or securities (or options and futures with respect to stock or securities)."
Subsec. (b)(2). Pub. L. 99–514, §653(b), inserted "(as defined in section 2(a)(36) of the Investment Company Act of 1940, as amended) or foreign currencies, or other income (including but not limited to gains from options, futures, or forward contracts) derived with respect to its business of investing in such stock, securities, or currencies".
Subsec. (e)(1). Pub. L. 99–514, §652(b), substituted "registered management company or registered business development company" for "registered management company".
1984—Subsec. (a). Pub. L. 98–369 struck out "(other than a personal holding company as defined in section 542)" after "any domestic corporation" in introductory provisions.
1983—Subsec. (b). Pub. L. 97–424 substituted "section 103(a)" for "section 103(a)(1)" after "gross income under".
1976—Subsec. (a)(1). Pub. L. 94–455, §1901(a)(109)(A), struck out "54 Stat. 789;" before "15 U.S.C. 80a–1 to 80b–2)".
Subsec. (b)(1), (4)(B). Pub. L. 94–455, §1901(a)(109)(B), struck out "which began after December 31, 1941" after "previous taxable year" in par. (1), and "or his delegate" after "Secretary" in par. (4)(B).
1958—Subsec. (e)(1). Pub. L. 85–866, §38(a), substituted "not earlier than 60 days" for "not less than 60 days" in first sentence.
Subsec. (e)(2). Pub. L. 85–866, §38(b), substituted "issuer" for "issues".
Pub. L. 115–97, title I, §14212(c), Dec. 22, 2017, 131 Stat. 2217, provided that: "The amendments made by this section [amending this section and sections 951, 952, 953, 964, and 970 of this title and repealing section 955 of this title] shall apply to taxable years of foreign corporations beginning after December 31, 2017, and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end."
Pub. L. 111–325, title II, §201(d), Dec. 22, 2010, 124 Stat. 3541, provided that: "The amendments made by this section [amending this section and section 852 of this title] shall apply to taxable years with respect to which the due date (determined with regard to any extensions) of the return of tax for such taxable year is after the date of the enactment of this Act [Dec. 22, 2010]."
Pub. L. 100–647, title I, §1006(n)(2)(C), Nov. 10, 1988, 102 Stat. 3415, provided that: "Subparagraph (C) of section 851(b)(3) of the 1986 Code (as amended by subparagraph (A)), and the amendment made by subparagraph (B) [amending this section], shall apply to taxable years beginning after the date of the enactment of this Act [Nov. 10, 1988]."
Pub. L. 99–514, title VI, §652(c), Oct. 22, 1986, 100 Stat. 2297, provided that: "The amendments made by this section [amending this section] shall apply to taxable years beginning after December 31, 1986."
Pub. L. 99–514, title VI, §653(d), Oct. 22, 1986, 100 Stat. 2298, provided that: "The amendments made by this section [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [Oct. 22, 1986]."
Pub. L. 99–514, title VI, §654(b), Oct. 22, 1986, 100 Stat. 2298, provided that:
"(1) In general.—The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [Oct. 22, 1986].
"(2) Treatment of certain existing series funds.—In the case of a regulated investment company which has more than one fund on the date of the enactment of this act, and has before such date been treated for Federal income tax purposes as a single corporation—
"(A) the amendment made by subsection (a), and the resulting treatment of each fund as a separate corporation, shall not give rise to the realization or recognition of income or loss by such regulated investment company, its funds, or its shareholders, and
"(B) the tax attributes of such regulated investment company shall be appropriately allocated among its funds."
Pub. L. 95–600, title VII, §701(s)(3), Nov. 6, 1978, 92 Stat. 2911, provided that: "The amendments made by this section [amending this section and section 852 of this title] shall apply to taxable years beginning after December 31, 1975."
Amendment by Pub. L. 94–12 applicable to taxable years of foreign corporations beginning after Dec. 31, 1975, and to taxable years of United States shareholders (within the meaning of section 951(b) of this title) within which or with which such taxable years of such foreign corporations end, see section 602(f) of Pub. L. 94–12, set out as an Effective Date note under section 954 of this title.
Pub. L. 91–172, title IX, §908(b), Dec. 30, 1969, 83 Stat. 718, provided that: "The amendment made by subsection (a) [amending this section] shall apply to taxable years of unit investment trusts ending after December 31, 1968, and to taxable years of holders of interests in such trusts ending with or within such taxable years of such trusts. The enactment of this section shall not be construed to result in the realization of gain or loss by any unit investment trust or by any holder of an interest in a unit investment trust."
§853. Foreign tax credit allowed to shareholders
(1) more than 50 percent of the value (as defined in section 851(c)(4)) of whose total assets at the close of the taxable year consists of stock or securities in foreign corporations, and
(1) the regulated investment company—
(A) shall not, with respect to such taxable year, be allowed a deduction under section 164(a) or a credit under section 901 for taxes to which subsection (a) is applicable, and
(B) shall be allowed as an addition to the dividends paid deduction for such taxable year the amount of such taxes;
(2) each shareholder of such investment company shall—
(A) include in gross income and treat as paid by him his proportionate share of such taxes, and
(B) treat as gross income from sources within the respective foreign countries and possessions of the United States, for purposes of applying subpart A of part III of subchapter N, the sum of his proportionate share of such taxes and the portion of any dividend paid by such investment company which represents income derived from sources within foreign countries or possessions of the United States.
(1) taxes paid to any foreign country or possession of the United States, and
(2) gross income derived from sources within any foreign country or possession of the United States,
(e) Treatment of certain taxes not allowed as a credit under section 901
(1) For treatment by shareholders of taxes paid to foreign countries and possessions of the United States, see section 164(a) and section 901.
(2) For definition of foreign corporation, see section 7701(a)(5).
(Aug. 16, 1954, ch. 736, 68A Stat. 272; Pub. L. 88–272, title II, §229(a)(3), Feb. 26, 1964, 78 Stat. 99; Pub. L. 94–455, title XIX, §1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 99–514, title VI, §655(a)(3), Oct. 22, 1986, 100 Stat. 2299; Pub. L. 105–34, title X, §1053(b), Aug. 5, 1997, 111 Stat. 943; Pub. L. 105–206, title VI, §6010(k)(1), (2), July 22, 1998, 112 Stat. 815; Pub. L. 109–135, title IV, §403(aa)(1), Dec. 21, 2005, 119 Stat. 2630; Pub. L. 111–325, title III, §301(c), Dec. 22, 2010, 124 Stat. 3544.)
2010—Subsec. (c). Pub. L. 111–325, §301(c)(1)(B), substituted "Statements" for "Notice" in heading.
Pub. L. 111–325, §301(c)(1)(A), which directed amendment by substituting "so reported by the company in a written statement furnished to such shareholder" for "so designated by the company in a written notice mailed to its shareholders not later than 60 days after the close of the taxable year", was executed by making the substitution for "so designated by the company in a written notice mailed to its shareholders not later than 60 days after the close of its taxable year" in concluding provisions to reflect the probable intent of Congress.
Subsec. (d). Pub. L. 111–325, §301(c)(2), struck out "and notifying shareholders" after "election" in heading and "and the notice to shareholders required by subsection (c)" after "subsection (a)" in text.
2005—Subsec. (e). Pub. L. 109–135 amended heading and text of subsec. (e) generally. Prior to amendment, text read as follows: "This section shall not apply to any tax with respect to which the regulated investment company is not allowed a credit under section 901 by reason of section 901(k)."
1998—Subsec. (c). Pub. L. 105–206, §6010(k)(2), struck out at end "Such notice shall also include the amount of such taxes which (without regard to the election under this section) would not be allowable as a credit under section 901(a) to the regulated investment company by reason of section 901(k)."
Subsecs. (e), (f). Pub. L. 105–206, §6010(k)(1), added subsec. (e) and redesignated former subsec. (e) as (f).
1997—Subsec. (c). Pub. L. 105–34 inserted at end "Such notice shall also include the amount of such taxes which (without regard to the election under this section) would not be allowable as a credit under section 901(a) to the regulated investment company by reason of section 901(k)."
1986—Subsec. (c). Pub. L. 99–514 substituted "60 days" for "45 days".
1964—Subsec. (c). Pub. L. 88–272 substituted "45 days" for "30 days".
Pub. L. 105–34, title X, §1053(c), Aug. 5, 1997, 111 Stat. 943, provided that: "The amendments made by this section [amending this section and section 901 of this title] shall apply to dividends paid or accrued more than 30 days after the date of the enactment of this Act [Aug. 5, 1997]."
Amendment by Pub. L. 99–514 applicable to taxable years beginning after Oct. 22, 1986, see section 655(b) of Pub. L. 99–514, set out as a note under section 852 of this title.
§853A. Credits from tax credit bonds allowed to shareholders
(2) which meets the requirements of section 852(a) for the taxable year (determined after the application of this section),
may elect the application of this section with respect to some or all of the credits allowable (determined without regard to this section and sections 54(c), 54A(c)(1), 54AA(c)(1), and 1397E(c)) 1 to the investment company during such taxable year with respect to such bonds.
(A) shall not be allowed such credits,
(B) shall include in gross income (as interest) for such taxable year the amount which would have been so included with respect to such credits had the application of this section not been elected,
(C) shall include in earnings and profits the amount so included in gross income, and
(D) shall be treated as making one or more distributions of money with respect to its stock equal to the amount of such credits on the date or dates (on or after the applicable date for any such credit) during such taxable year (or following the close of the taxable year pursuant to section 855) selected by the company, and
(A) be treated as receiving such shareholder's proportionate share of any distribution of money which is treated as made by such investment company under paragraph (1)(D), and
(B) be allowed credits against the tax imposed by this chapter equal to the amount of such distribution, subject to the provisions of this title applicable to the credit involved.
(c) Statements 2 to shareholders
The term "tax credit bond" means—
(i) a qualified tax credit bond (as defined in section 54A(d)),1
(ii) a build America bond (as defined in section 54AA(d)) 1 other than a qualified bond described in section 54AA(g),1 and
(iii) any bond for which a credit is allowable under subpart H of part IV of subchapter A of this chapter.1
(i) in the case of a qualified tax credit bond or a bond described in subparagraph (A)(iii), any credit allowance date (as defined in section 54A(e)(1)),1 and
(ii) in the case of a build America bond (as defined in section 54AA(d)),1 any interest payment date (as defined in section 54AA(e)).1
The Secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section, including methods for determining a shareholder's proportionate share of credits.
(Added Pub. L. 111–5, div. B, title I, §1541(a), Feb. 17, 2009, 123 Stat. 360; amended Pub. L. 111–325, title III, §301(d), Dec. 22, 2010, 124 Stat. 3544; Pub. L. 113–295, div. A, title II, §209(h), Dec. 19, 2014, 128 Stat. 4029.)
Sections 54, 54A, and 54AA, referred to in subsecs. (a) and (e)(1), were repealed by Pub. L. 115–97, title I, §13404(a), Dec. 22, 2017, 131 Stat. 2138.
Section 1397E, referred to in subsec. (a), was repealed by Pub. L. 115–97, title I, §13404(c)(1), Dec. 22, 2017, 131 Stat. 2138.
Subpart H of part IV of subchapter A of this chapter, referred to in subsec. (e)(1)(A)(iii), is subpart H (§54) of part IV of subchapter A of chapter 1 of this title, which was repealed by Pub. L. 115–97, title I, §13404(a), Dec. 22, 2017, 131 Stat. 2138.
2014—Subsec. (a). Pub. L. 113–295, §209(h)(2), in concluding provisions, substituted "with respect to some or all of the credits" for "with respect to credits" and inserted "(determined without regard to this section and sections 54(c), 54A(c)(1), 54AA(c)(1), and 1397E(c))" after "credits allowable".
Subsec. (a)(2). Pub. L. 113–295, §209(h)(1), inserted "(determined after the application of this section)" before comma at end.
Subsec. (b). Pub. L. 113–295, §209(h)(3), amended subsec. (b) generally. Prior to amendment, subsec. (b) consisted of pars. (1) to (3) relating to effects of elections under subsec. (a).
Subsec. (c). Pub. L. 113–295, §209(h)(4), amended subsec. (c) generally. The amendment was effective as if included in the provisions of the American Recovery and Reinvestment Tax Act of 2009 (Pub. L. 111–5, div. B, title I) to which it relates. As enacted by Pub. L. 111–5, §1541(a), subsec. (c) read as follows: "Notice to Shareholders.—For purposes of subsection (b)(3), the shareholder's proportionate share of—
"(2) gross income in respect of such credits,
shall not exceed the amounts so designated by the regulated investment company in a written notice mailed to its shareholders not later than 60 days after the close of its taxable year."
Subsec. (e)(1)(A)(ii). Pub. L. 113–295, §209(h)(5), inserted "other than a qualified bond described in section 54AA(g)" after "as defined in section 54AA(d))".
2010—Subsec. (c). Pub. L. 111–325, §301(d)(1), which directed substitution of "Statements" for "Notice" in heading and "so reported by the regulated investment company in a written statement furnished to such shareholder" for "so designated by the regulated investment company in a written notice mailed to its shareholders not later than 60 days after the close of its taxable year" in text, could not be executed to the text because the words "so reported by the regulated investment company in a written statement furnished to such shareholder" already appeared after the subsequent general amendment of subsec. (c) by Pub. L. 113–295 which was effective as if included in the provisions of the American Recovery and Reinvestment Tax Act of 2009 (Pub. L. 111–5, div. B, title I) to which it relates. However, the substitution was executed to the heading to reflect the probable intent of Congress. See 2014 Amendment note above and Effective Date of 2014 Amendment note below.
Subsec. (d). Pub. L. 111–325, §301(d)(2), struck out "and notifying shareholders" after "election" in heading and "and the notice to shareholders required by subsection (c)" after "subsection (a)" in text.
Pub. L. 111–5, div. B, title I, §1541(c), Feb. 17, 2009, 123 Stat. 362, provided that: "The amendments made by this section [enacting this section and amending sections 54 and 54A of this title] shall apply to taxable years ending after the date of the enactment of this Act [Feb. 17, 2009]."
2 See 2010 Amendment note below.
§854. Limitations applicable to dividends received from regulated investment company
(A) Deduction under section 243
(i) a dividend is received from a regulated investment company (other than a dividend to which subsection (a) applies), and
(ii) such investment company meets the requirements of section 852(a) for the taxable year during which it paid such dividend,
(I) a dividend is received from a regulated investment company (other than a dividend to which subsection (a) applies),
(II) such investment company meets the requirements of section 852(a) for the taxable year during which it paid such dividend, and
(III) the qualified dividend income of such investment company for such taxable year is less than 95 percent of its gross income,
(ii) Gross income
For purposes of clause (i), in the case of 1 or more sales or other dispositions of stock or securities, the term "gross income" includes only the excess of—
(I) the net short-term capital gain from such sales or dispositions, over
(II) the net long-term capital loss from such sales or dispositions.
(ii) Subparagraph (b)
(I) the qualified dividend income of the company for the taxable year, and
(II) the amount of any earnings and profits which were distributed by the company for such taxable year and accumulated in a taxable year with respect to which this part did not apply.
(2) Aggregate dividends
For purposes of subparagraph (A), the term "dividend" shall not include any distribution from—
(i) a corporation which, for the taxable year of the corporation in which the distribution is made, or for the next preceding taxable year of the corporation, is a corporation exempt from tax under section 501 (relating to certain charitable, etc., organizations) or section 521 (relating to farmers' cooperative associations), or
(ii) a real estate investment trust which, for the taxable year of the trust in which the dividend is paid, qualifies under part II of subchapter M (section 856 and following).
(3) Special rule for computing deduction under section 243
For purposes of subparagraph (A) of paragraph (1), an amount shall be treated as a dividend for the purpose of paragraph (1) only if a deduction would have been allowable under section 243 to the regulated investment company determined—
(A) as if section 243 applied to dividends received by a regulated investment company,
(B) after the application of section 246 (but without regard to subsection (b) thereof), and
(C) after the application of section 246A.
(Aug. 16, 1954, ch. 736, 68A Stat. 273; Pub. L. 88–272, title II, §§201(d)(8)–(10), 229(a)(4), Feb. 26, 1964, 78 Stat. 32, 99; Pub. L. 96–223, title IV, §404(b)(6), Apr. 2, 1980, 94 Stat. 307; Pub. L. 97–34, title III, §302(c)(4), (d)(1), Aug. 13, 1981, 95 Stat. 272, 274; Pub. L. 98–369, div. A, title I, §§16(a), 52(a)–(c), July 18, 1984, 98 Stat. 505, 564, 565; Pub. L. 99–514, title VI, §§612(b)(6), 655(a)(4), Oct. 22, 1986, 100 Stat. 2250, 2299; Pub. L. 100–203, title X, §10221(d)(3), Dec. 22, 1987, 101 Stat. 1330–409; Pub. L. 100–647, title I, §1006(b)(2), Nov. 10, 1988, 102 Stat. 3393; Pub. L. 108–27, title III, §302(c), May 28, 2003, 117 Stat. 762; Pub. L. 108–311, title IV, §402(a)(5)(A)–(D), Oct. 4, 2004, 118 Stat. 1184; Pub. L. 111–325, title III, §301(e), Dec. 22, 2010, 124 Stat. 3544.)
2010—Subsec. (b)(1)(A). Pub. L. 111–325, §301(e)(1)(A), in concluding provisions, substituted "reported by the regulated investment company as eligible for such deduction in written statements furnished to its shareholders" for "designated under this subparagraph by the regulated investment company".
Subsec. (b)(1)(B)(i). Pub. L. 111–325, §301(e)(1)(B), in concluding provisions, substituted "reported by the regulated investment company as qualified dividend income in written statements furnished to its shareholders" for "designated by the regulated investment company".
Subsec. (b)(1)(C)(i). Pub. L. 111–325, §301(e)(1)(C), substituted "reported" for "designated".
Subsec. (b)(1)(C)(ii). Pub. L. 111–325, §301(e)(1)(D), substituted "reported" for "designated" in introductory provisions.
Subsec. (b)(2) to (5). Pub. L. 111–325, §301(e)(2), redesignated pars. (3) to (5) as (2) to (4), respectively, and struck out former par. (2). Prior to amendment, text read as follows: "The amount of any distribution by a regulated investment company which may be taken into account as qualified dividend income for purposes of section 1(h)(11) and as dividends for purposes of the deduction under section 243 shall not exceed the amount so designated by the company in a written notice to its shareholders mailed not later than 60 days after the close of its taxable year."
2004—Subsec. (b)(1)(B)(i). Pub. L. 108–311, §402(a)(5)(A)(ii), reenacted heading without change and amended text generally. Prior to amendment, text read as follows: "If the aggregate dividends received by a regulated investment company during any taxable year are less than 95 percent of its gross income, then, in computing the maximum rate under section 1(h)(11), rules similar to the rules of subparagraph (A) shall apply."
Subsec. (b)(1)(B)(iii), (iv). Pub. L. 108–311, §402(a)(5)(A)(i), struck out cls. (iii) and (iv) which related to dividends from real estate investment trusts and dividends from qualified foreign corporations, respectively.
Subsec. (b)(1)(C). Pub. L. 108–311, §402(a)(5)(B), amended heading and text of subpar. (C) generally. Prior to amendment, text read as follows: "The aggregate amount which may be designated as dividends under subparagraph (A) or (B) shall not exceed the aggregate dividends received by the company for the taxable year."
Subsec. (b)(2). Pub. L. 108–311, §402(a)(5)(C), substituted "as qualified dividend income for purposes of section 1(h)(11) and as dividends for purposes of" for "as a dividend for purposes of the maximum rate under section 1(h)(11) and".
Subsec. (b)(5). Pub. L. 108–311, §402(a)(5)(D), amended heading and text of par. (5) generally. Prior to amendment, text read as follows: "For purposes of paragraph (1)(B), an amount shall be treated as a dividend only if the amount is qualified dividend income (within the meaning of section 1(h)(11)(B))."
2003—Subsec. (a). Pub. L. 108–27, §302(c)(1), inserted "section 1(h)(11) (relating to maximum rate of tax on dividends) and" after "For purposes of".
Subsec. (b)(1)(B). Pub. L. 108–27, §302(c)(2), added subpar. (B). Former subpar. (B) redesignated (C).
Subsec. (b)(1)(C). Pub. L. 108–27, §302(c)(2), (3), redesignated subpar. (B) as (C) and substituted "subparagraph (A) or (B)" for "subparagraph (A)".
Subsec. (b)(2). Pub. L. 108–27, §302(c)(4), inserted "the maximum rate under section 1(h)(11) and" after "for purposes of".
Subsec. (b)(5). Pub. L. 108–27, §302(c)(5), added par. (5).
1988—Subsec. (b)(3). Pub. L. 100–647 substituted "Aggregate dividends" for "Definitions" in heading and amended text generally, substituting subpars. (A) to (C) for former subpars. (A) and (B).
1987—Subsec. (b)(1)(A). Pub. L. 100–203 inserted "and such dividend shall be treated as received from a corporation which is not a 20-percent owned corporation" before period at end.
1986—Subsec. (a). Pub. L. 99–514, §612(b)(6)(A), which directed that "section 116 (relating to an exclusion for dividends received by individuals), and" be struck out, was executed by striking out "section 116 (relating to an exclusion for dividends received by individuals) and" before "section 243" as the probable intent of Congress.
Subsec. (b)(1)(B), (C). Pub. L. 99–514, §612(b)(6)(B)(i), (ii), redesignated subpar. (C) as (B), struck out "or (B)" before "shall not exceed", and struck out former subpar. (B), exclusion under section 116, which read as follows: "If the aggregate dividends received by a regulated investment company during any taxable year are less than 95 percent of its gross income, then, in computing the exclusion under section 116, rules similar to the rules of subparagraph (A) shall apply."
Subsec. (b)(2). Pub. L. 99–514, §655(a)(4), substituted "60 days" for "45 days".
Pub. L. 99–514, §612(b)(6)(B)(iii), struck out "the exclusion under section 116 and" before "the deduction under section 243".
Subsec. (b)(3)(B). Pub. L. 99–514, §612(b)(6)(B)(iv), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: "The term 'aggregate dividends received' includes only dividends received from domestic corporations other than dividends described in section 116(b) (relating to dividends excluded from gross income). In determining the amount of any dividend for purposes of this subparagraph, the rules provided in section 116(c) (relating to certain distributions) shall apply."
1984—Subsec. (b). Pub. L. 98–369, §16(a), repealed amendments made by Pub. L. 97–34, §302(c). See 1981 Amendment note below.
Subsec. (b)(1). Pub. L. 98–369, §52(a), increased the required amount of dividends by substituting provisions directing that in any case in which (i) a dividend is received from a regulated investment company (other than a dividend to which subsection (a) applies), and (ii) such investment company meets the requirements of section 852(a) for the taxable year during which it paid such dividend, then, in computing any deduction under section 243, there shall be taken into account only that portion of such dividend thus designated by the regulated investment company, that if the aggregate dividends received by a regulated investment company during any taxable year are less than 95 percent of its gross income, then, in computing the exclusion under section 116, similar rules applied, and that the aggregate amount which may be designated thus dividends shall not exceed the aggregate dividends received by the company for the taxable year for provisions which had directed that in the case of a dividend received from a regulated investment company (other than a dividend to which subsection (a) applied) (A) if such investment company met the requirements of section 852(a) for the taxable year during which it paid such dividend; and (B) the aggregate dividends received by such company during such taxable year were less than 75 percent of its gross income, then, in computing the exclusion under section 116 and the deduction under section 243, there was taken into account only that portion of the dividend which bore the same ratio to the amount of such dividend as the aggregate dividends received by such company during such taxable year to its gross income for such taxable year.
Subsec. (b)(3)(A). Pub. L. 98–369, §52(c), substituted provisions directing that in the case of 1 or more sales or other dispositions of stock and securities, the term "gross income" include only the excess of (i) the net short-term capital gain from such sales or dispositions, over (ii) the net long-term capital loss from such sales or dispositions for provisions which had directed that the term "gross income" not include gain from the sale or other disposition of stock or securities.
Subsec. (b)(4). Pub. L. 98–369, §52(b), added par. (4).
1981—Subsec. (b). Pub. L. 97–34, §302(c)(4), (d)(1), provided for general amendment of subsec. (b) so as to include provisions relating to taxable interest described in section 128 of this title, applicable to taxable years beginning after Dec. 31, 1984. Section 16(a) of Pub. L. 98–369, repealed section 302(c) of Pub. L. 97–34, and provided that this title shall be applied and administered as if section 302(c), and the amendments made by section 302(c), had not been enacted.
1980—Subsec. (b). Pub. L. 96–223, §404(b)(6), temporarily substituted "Other dividends and taxable interest" for "Other dividends" in heading, substituted "Deduction under section 243" for "General rule" in heading for par. (1), struck out "the exclusion under section 116 and" after "in computing" in text of par. (1) following subpar. (B), added par. (2), redesignated former pars. (2) and (3) as (3) and (4), respectively, and, in par. (4) as so redesignated, substituted "116(b)(2)" for "116(b)" and "116(c)(2)" for "116(c)" in subpar. (B) and added subpar. (C).
1964—Subsec. (a). Pub. L. 88–272, §201(d)(8), struck out "section 34(a) (relating to credit for dividends received by individuals)," before "section 116" and the comma before "and".
Subsec. (b). Pub. L. 88–272, §§201(d)(9), (10), 229(a)(4), substituted "45 days" for "30 days" in par. (2), and struck out "the credit under section 34(a)," before "the exclusion" in par. (1), and "the credit under section 34," before "the exclusion" in par. (2).
Pub. L. 111–325, title III, §301(i), Dec. 22, 2010, 124 Stat. 3547, provided that: "Section 303 of the Jobs and Growth Tax Relief Reconciliation Act of 2003 [Pub. L. 108–27, which was repealed by Pub. L. 112–240, title I, §102(a), Jan. 2, 2013, 126 Stat. 2318, was formerly set out as an Effective and Termination Dates of 2003 Amendment note under section 1 of this title] shall apply to the amendments made by subparagraphs (B) and (D) of subsection (e)(1) [amending this section] to the same extent and in the same manner as section 303 of such Act applies to the amendments made by section 302 of such Act [amending this section and sections 1, 163, 301, 306, 338, 467, 531, 541, 584, 702, 857, 1255, and 1257 of this title and repealing section 341 of this title]."
Pub. L. 98–369, div. A, title I, §52(d), July 18, 1984, 98 Stat. 565, provided that: "The amendments made by this section [amending this section] shall apply to taxable years of regulated investment companies beginning after the date of the enactment of this Act [July 18, 1984]."
Pub. L. 108–311, title IV, §402(a)(5)(F), Oct. 4, 2004, 118 Stat. 1185, provided that: "With respect to any taxable year of a regulated investment company or real estate investment trust ending on or before November 30, 2003, the period for providing notice of the qualified dividend amount to shareholders under [former, as to 854(b)(2)] sections 854(b)(2) and 857(c)(2)(C) of the Internal Revenue Code of 1986, as amended by this section, shall not expire before the date on which the statement under section 6042(c) of such Code is required to be furnished with respect to the last calendar year beginning in such taxable year."
§855. Dividends paid by regulated investment company after close of taxable year
(B) in the case of an extension of time for filing the company's return for the taxable year, the due date for filing such return taking into account such extension, and
(Aug. 16, 1954, ch. 736, 68A Stat. 274; Pub. L. 86–779, §10(b)(2), Sept. 14, 1960, 74 Stat. 1009; Pub. L. 88–272, title II, §229(a)(5), Feb. 26, 1964, 78 Stat. 99; Pub. L. 94–455, title XIX, §1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 99–514, title VI, §§651(b)(1)(B), 655(a)(5), Oct. 22, 1986, 100 Stat. 2296, 2299; Pub. L. 100–647, title I, §1006(l)(1)(B), Nov. 10, 1988, 102 Stat. 3413; Pub. L. 111–325, title III, §§301(g), 304(a)–(c), Dec. 22, 2010, 124 Stat. 3547–3549; Pub. L. 113–295, div. A, title II, §205(b), Dec. 19, 2014, 128 Stat. 4026.)
The Investment Company Act of 1940, referred to in subsec. (a), is title I of act Aug. 22, 1940, ch. 686, 54 Stat. 789, which is classified generally to subchapter I (§80a–1 et seq.) of chapter 2D of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see section 80a–51 of Title 15 and Tables.
2014—Subsec. (a)(1). Pub. L. 113–295 inserted "on or" before "before" in introductory provisions.
2010—Subsec. (a). Pub. L. 111–325, §304(c), in concluding provisions, inserted at end "For purposes of paragraph (2), a dividend attributable to any short-term capital gain with respect to which a notice is required under the Investment Company Act of 1940 shall be treated as the same type of dividend as a capital gain dividend."
Pub. L. 111–325, §301(g)(2), substituted "and (c)" for ", (c) and (d)" in concluding provisions.
Subsec. (a)(1). Pub. L. 111–325, §304(a), amended par. (1) generally. Prior to amendment, par. (1) read as follows: "declares a dividend prior to the time prescribed by law for the filing of its return for a taxable year (including the period of any extension of time granted for filing such return), and".
Subsec. (a)(2). Pub. L. 111–325, §304(b), substituted "the first dividend payment of the same type of dividend" for "the first regular dividend payment".
Subsecs. (c), (d). Pub. L. 111–325, §301(g)(1), redesignated subsec. (d) as (c) and struck out former subsec. (c). Text of former subsec. (c) read as follows: "In the case of amounts to which subsection (a) is applicable, any notice to shareholders required under this part with respect to such amounts shall be made not later than 60 days after the close of the taxable year in which the distribution is made."
1988—Subsec. (b). Pub. L. 100–647 substituted "section 852(b)(7)" for "section 852(b)(6)".
1986—Subsec. (b). Pub. L. 99–514, §651(b)(1)(B), substituted "Except as provided in section 852(b)(6), amounts" for "Amounts".
Subsec. (c). Pub. L. 99–514, §655(a)(5), substituted "60 days" for "45 days".
1960—Subsec. (c). Pub. L. 86–779 substituted "this part" for "this subchapter".
Pub. L. 111–325, title III, §304(d), Dec. 22, 2010, 124 Stat. 3549, provided that: "The amendments made by this section [amending this section] shall apply to distributions in taxable years beginning after the date of the enactment of this Act [Dec. 22, 2010]."