2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter E - Corporations of Individuals (§§ 30581 — 30590) › § 30587 - Coordination with other provisions of this part

(a) Application of general provisions. —
(1) In general. — Except as otherwise provided in this part, and except to the extent inconsistent with this subchapter, the general provisions of this part applicable to regular corporations shall apply to a corporation of individuals and their stockholders.
(2) A corporation of individuals in its shareholder capacity shall be treated as an individual. — For purposes of §§ 30144 and 30149 of this title, a corporation of individuals in its capacity of shareholder of another corporation shall be treated as an individual.
(b) No carryovers between regular corporation years and corporation of individual years. —
(1) From regular corporation year to corporation of individuals year. — No carryforward and carrybacks arising for a taxable year for which a corporation was a regular corporation may be carried to a taxable year for which such corporation is a corporation of individuals.
(2) No carryover from corporation of individuals year. — No carryforward, and no carryback, shall arise at the corporate level for a taxable year for which a corporation is a corporation of individuals.
(3) Treatment of a corporation of individuals year as an elapsed year. — None of the provisions of clause (1) and (2) shall prevent treating a taxable year for which a corporation is a corporation of individuals as a taxable year for purposes of determining the number of taxable years to which an item may be carried back or carried forward.
(c) Earnings and profits. —
(1) In general. — Except as provided in clauses (2) and (3), no adjustment shall be made to the earnings and profits of a corporation of individuals.
(2) Adjustments for redemptions, liquidations, and reorganizations. — In the case of any transaction involving the application of § 30144 of this title to any corporation of individuals, proper adjustment to any accumulated earnings or profits of the corporation shall be made.
(3) Adjustments in case of distributions treated as dividends under § 30586(c)(1) of this title. — Clause (1) shall not apply with respect to that portion of a distribution which is treated as a dividend under § 30586(c)(1) of this title.
(d) Cash distributions during post-termination transition period. —
(1) In general. — Any distribution of money made by a corporation with respect to its stock during a post-termination transition period shall be applied against and reduced the adjusted basis of the stock, to the extent that the amount of the distribution does not exceed the accumulated adjustments account (as defined in § 30586(e) of this title).
(2) Election to distribute earnings first. — A corporation of individuals may elect to have clause (1) not apply to all distributions made during a post-termination transition period described in § 30589(b)(1)(A) of this title. Such election shall not be effective unless all shareholders of the corporation of individuals to whom distributions are made by the corporation of individuals during such post-termination transition period consent to such election.
History —Jan. 31, 2011, No. 1, § 1115.07, retroactive to Jan. 1, 2011.