Source: http://www4.law.cornell.edu/uscode/text/26/860?quicktabs_8=1
Timestamp: 2013-12-11 06:16:30
Document Index: 98766215

Matched Legal Cases: ['§ 860', '§ 860', '§ 860', '§ 362', '§ 103', '§ 667', '§ 243', '§ 301', '§ 501', '§ 301', '§ 501', '§ 501', '§ 103', '§ 2']

26 USC § 860 - Deduction for deficiency dividends | Title 26 - Internal Revenue Code | U.S. Code | LII / Legal Information Institute
USC › Title 26 › Subtitle A › Chapter 1 › Subchapter M › Part III › § 860	prevnext
26 USC § 860 - Deduction for deficiency dividends
General rule If a determination with respect to any qualified investment entity results in any adjustment for any taxable year, a deduction shall be allowed to such entity for the amount of deficiency dividends for purposes of determining the deduction for dividends paid (for purposes of section 852 or 857, whichever applies) for such year.
Qualified investment entity defined For purposes of this section, the term “qualified investment entity” means—
Interest and additions to tax determined with respect to the amount of deficiency dividend deduction allowed For purposes of determining interest, additions to tax, and additional amounts—
the last date prescribed for payment of such increase in tax shall be deemed to have been the last date prescribed for the payment of tax (determined in the manner provided by section 6601
(b)) for the taxable year with respect to which the determination is made, and
Credit or refund If the allowance of a deficiency dividend deduction results in an overpayment of tax for any taxable year, credit or refund with respect to such overpayment shall be made as if on the date of the determination 2 years remained before the expiration of the period of limitations on the filing of claim for refund for the taxable year to which the overpayment relates.
Adjustment For purposes of this section—
Adjustment in the case of regulated investment company In the case of any regulated investment company, the term “adjustment” means—
any increase in the amount of the excess described in section 852
(b)(3)(A) (relating to the excess of the net capital gain over the deduction for capital gain dividends paid), and
Adjustment in the case of real estate investment trust In the case of any real estate investment trust, the term “adjustment” means—
any increase in the sum of—
the excess of the net income from foreclosure property (as defined in section 857
(b)(4)(B)) over the tax on such income imposed by section 857
(b)(4)(A),
any increase in the amount of the excess described in section 857
(b)(3)(A)(ii) (relating to the excess of the net capital gain over the deduction for capital gains dividends paid), and
Definition For purposes of this section, the term “deficiency dividends” means a distribution of property made by the qualified investment entity on or after the date of the determination and before filing claim under subsection (g), which would have been includible in the computation of the deduction for dividends paid under section 561 for the taxable year with respect to which the liability for tax resulting from the determination exists if distributed during such taxable year. No distribution of property shall be considered as deficiency dividends for purposes of subsection (a) unless distributed within 90 days after the determination, and unless a claim for a deficiency dividend deduction with respect to such distribution is filed pursuant to subsection (g).
Ordinary dividends The amount of deficiency dividends (other than deficiency dividends qualifying as capital gain dividends) paid by a qualified investment entity for the taxable year with respect to which the liability for tax resulting from the determination exists shall not exceed the sum of—
the amount of decreased [1]
referred to in subparagraph (C) of paragraph (1) or (2) of subsection (d) (whichever applies).
Capital gain dividends The amount of deficiency dividends qualifying as capital gain dividends paid by a qualified investment entity for the taxable year with respect to which the liability for tax resulting from the determination exists shall not exceed the amount by which (i)
the increase referred to in subparagraph (B) of paragraph (1) or (2) of subsection (d) (whichever applies), exceeds (ii)
the amount of any dividends paid during such taxable year which are designated or reported (as the case may be) as capital gain dividends after such determination.
For taxable year in which paid Deficiency dividends paid in any taxable year shall not be included in the amount of dividends paid for such year for purposes of computing the dividends paid deduction for such year.
For prior taxable year Deficiency dividends paid in any taxable year shall not be allowed for purposes of section 855
(a) or 858
(a) in the computation of the dividends paid deduction for the taxable year preceding the taxable year in which paid.
Claim required No deficiency dividend deduction shall be allowed under subsection (a) unless (under regulations prescribed by the Secretary) claim therefore is filed within 120 days after the date of the determination.
Suspension of running of statute If the qualified investment entity files a claim as provided in subsection (g), the running of the statute of limitations provided in section 6501 on the making of assessments, and the bringing of distraint or a proceeding in court for collection, in respect of the deficiency established by a determination under this section, and all interest, additions to tax, additional amounts, or assessable penalties in respect thereof, shall be suspended for a period of 2 years after the date of the determination.
Stay of collection In the case of any deficiency established by a determination under this section—
Deduction denied in case of fraud No deficiency dividend deduction shall be allowed under subsection (a) if the determination contains a finding that any part of any deficiency attributable to an adjustment with respect to the taxable year is due to fraud with intent to evade tax or to willfull [2]
failure to file an income tax return within the time prescribed by law or prescribed by the Secretary in pursuance of law.
So in original. Probably should be “decrease”.
So in original. Probably should be “willful”.
(Added Pub. L. 95–600, title III, § 362(a),Nov. 6, 1978, 92 Stat. 2848; amended Pub. L. 96–222, title I, § 103(a)(11)(B), (C),Apr. 1, 1980, 94 Stat. 213; Pub. L. 99–514, title VI, § 667(b)(1),Oct. 22, 1986, 100 Stat. 2306; Pub. L. 108–357, title II, § 243(f)(5),Oct. 22, 2004, 118 Stat. 1445; Pub. L. 111–325, title III, § 301(a)(2), title V, § 501(b),Dec. 22, 2010, 124 Stat. 3542, 3554.)
A prior section 860 was renumbered section 859 of this title.
2010—Subsec. (f)(2)(B). Pub. L. 111–325, § 301(a)(2), inserted “or reported (as the case may be)” after “designated”.
Subsec. (j). Pub. L. 111–325, § 501(b), struck out subsec. (j). Text read as follows: “For assessable penalty with respect to liability for tax of a regulated investment company which is allowed a deduction under subsection (a), see section 6697.”
2004—Subsec. (e)(4). Pub. L. 108–357added par. (4).
1986—Subsec. (j). Pub. L. 99–514substituted “regulated investment company” for “qualified investment entity”.
1980—Subsec. (f). Pub. L. 96–222substituted in heading “Deficiency” for “Efficiency” and in par. (2)(A)(i) “(computed without regard” for “computed without regard”.
Amendment by section 301(a)(2) ofPub. L. 111–325applicable to taxable years beginning after Dec. 22, 2010, see section 301(h) ofPub. L. 111–325, set out as a note under section 852 of this title.
Pub. L. 111–325, title V, § 501(c),Dec. 22, 2010, 124 Stat. 3554, provided that: “The amendments made by this section [amending this section and repealing section 6697 of this title] shall apply to taxable years beginning after the date of the enactment of this Act [Dec. 22, 2010].”
Amendment by Pub. L. 108–357applicable to statements filed after Oct. 22, 2004, see section 243(g)(4)(E) ofPub. L. 108–357, set out as a note under section 856 of this title.
Section 362(e) ofPub. L. 95–600, as amended by Pub. L. 96–222, title I, § 103(a)(11)(A),Apr. 1, 1980, 94 Stat. 212; Pub. L. 99–514, § 2,Oct. 22, 1986, 100 Stat. 2095, provided that: “The amendments made by this section [enacting this section, amending sections 316, 381, 852, 857, 6422, 6503, 6515, and 6697 of this title, repealing section 859 of this title, and redesignating prior section 860 as 859 of this title] shall apply with respect to determinations (as defined in section 860(e) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) after the date of the enactment of this Act [Nov. 6, 1978].”