![]() |
United States Code (Last Updated: May 24, 2014) |
![]() |
Title 26. INTERNAL REVENUE CODE |
![]() |
SubTitle A. Income Taxes |
![]() |
Chapter 6. CONSOLIDATED RETURNS |
![]() |
SubChapter B. Related Rules |
![]() |
Part II. CERTAIN CONTROLLED CORPORATIONS |
§ 1561. Limitations on certain multiple tax benefits in the case of certain controlled corporations
-
(a) General rule The component members of a controlled group of corporations on a December 31 shall, for their taxable years which include such December 31, be limited for purposes of this subtitle to— (1) amounts in each taxable income bracket in the tax table in section 11(b)(1) which do not aggregate more than the maximum amount in such bracket to which a corporation which is not a component member of a controlled group is entitled, (2) one $250,000 ($150,000 if any component member is a corporation described in section 535(c)(2)(B)) amount for purposes of computing the accumulated earnings credit under section 535(c)(2) and (3), (3) one $40,000 exemption amount for purposes of computing the amount of the minimum tax, and (4) one $2,000,000 amount for purposes of computing the tax imposed by section 59A. The amounts specified in paragraph (1), the amount specified in paragraph (3), and the amount specified in paragraph (4) shall be divided equally among the component members of such group on such December 31 unless all of such component members consent (at such time and in such manner as the Secretary shall by regulations prescribe) to an apportionment plan providing for an unequal allocation of such amounts. The amounts specified in paragraph (2) shall be divided equally among the component members of such group on such December 31 unless the Secretary prescribes regulations permitting an unequal allocation of such amounts. Notwithstanding paragraph (1), in applying the last 2 sentences of section 11(b)(1) to such component members, the taxable income of all such component members shall be taken into account and any increase in tax under such last 2 sentences shall be divided among such component members in the same manner as amounts under paragraph (1). In applying section 55(d)(3), the alternative minimum taxable income of all component members shall be taken into account and any decrease in the exemption amount shall be allocated to the component members in the same manner as under paragraph (3). (b) Certain short taxable years If a corporation has a short taxable year which does not include a December 31 and is a component member of a controlled group of corporations with respect to such taxable year, then for purposes of this subtitle— (1) the amount in each taxable income bracket in the tax table in section 11(b), and (2) the amount to be used in computing the accumulated earnings credit under section 535(c)(2) and (3), of such corporation for such taxable year shall be the amount specified in subsection (a)(1) or (2), as the case may be, divided by the number of corporations which are component members of such group on the last day of such taxable year. For purposes of the preceding sentence, section 1563(b) shall be applied as if such last day were substituted for December 31.
Amendments
1996—Subsec. (a). Pub. L. 104–188 in closing provisions substituted “last 2 sentences” for “last sentence” in two places.
1988—Subsec. (a). Pub. L. 100–647 substituted “section 11(b)(1)” for “section 11(b)” in par. (1) and in penultimate sentence.
1986—Subsec. (a). Pub. L. 99–514 added par. (3), and in concluding provisions, substituted “amounts specified in paragraph (1) (and the amount specified in paragraph (3))” for “amounts specified in paragraph (1)” and inserted “In applying section 55(d)(3), the alternative minimum taxable income of all component members shall be taken into account and any decrease in the exemption amount shall be allocated to the component members in the same manner as under paragraph (3).”
Pub. L. 99–499, in subsec. (a) as amended by Pub. L. 99–514 above, added par. (4), and in concluding provisions substituted “, the amount specified in paragraph (3), and the amount specified in paragraph (4)” for “(and the amount specified in paragraph (3))”.
1984—Subsec. (a). Pub. L. 98–369, § 211(b)(21)(A), inserted “and” at end of par. (1), substituted a period for the comma at end of par. (2), struck out par. (3) which read as follows: “one $25,000 amount for purposes of computing the limitation on the small business deduction of life insurance companies under sections 804(a)(3) and 809(d)(10), and”, struck out par. (4) which read as follows: “one $1,000,000 amount (adjusted as provided in section 809(f)(3) for purposes of computing the limitation under paragraph (1) or (2) of section 809(f).”, and substituted “paragraph (2)” for “paragraphs (2), (3), and (4)” in concluding provisions.
Pub. L. 98–369, § 66(b), inserted provision that notwithstanding paragraph (1), in applying last sentence of section 11(b) to such component members, the taxable income of all such component members shall be taken into account and any increase in tax under the last sentence shall be divided among such component members in the same manner as amounts under paragraph (1).
Subsec. (b). Pub. L. 98–369, § 211(b)(21)(B), inserted “and” at end of par. (1), struck out par. (3) which read as follows: “the amount to be used in computing the limitation on the small business deduction of life insurance companies under sections 804(a)(3) and 809(d)(10), and”, struck out par. (4) which read as follows: “the amount (adjusted as provided in section 809(f)(3)) to be used in computing the limitation under paragraph (1) or (2) of section 809(f),”, and substituted “or (2)” for “, (2), (3), or (4)” in concluding provisions.
1982—Subsec. (a). Pub. L. 97–248, § 259(b), added par. (4) and inserted reference to par. (4) in text following par. (4).
Subsec. (b). Pub. L. 97–248, § 259(c), added par. (4) and inserted reference to subsec. (a)(4) in text following par. (4).
1981—Subsec. (a)(2). Pub. L. 97–34 substituted “$250,000 ($150,000 if any component member is a corporation described in section 535(c)(2)(B))” for “$150,000”.
1978—Subsec. (a). Pub. L. 95–600, § 301(b)(19)(A), in par. (1) substituted “amounts in each taxable income bracket in the tax table in section 11(b) which do not aggregate more than the maximum amount in such bracket to which a corporation is not a component member of a controlled group is entitled” for “the surtax exemption under section 11(d)” and in provisions following par. (3) substituted “amounts” for “amount” in two places and struck out provision that in applying section 11(b)(2), the first $25,000 of taxable income and the second $25,000 of taxable income each be allocated among the component members of a controlled group of corporations in the same manner as the surtax exemption is allocated.
Subsec. (b)(1). Pub. L. 95–600, § 301(b)(19)(B), substituted “the amount in each taxable income bracket in the tax table in section 11(b)” for “the surtax exemption under section 11(d)”.
Subsec. (b)(3). Pub. L. 95–600, § 703(j)(7), substituted “804(a)(3)” for “804(a)(4)”.
1976—Subsec. (a). Pub. L. 94–455, §§ 901(c)(1), 1906(b)(13)(A), inserted “In applying section 11(b)(2), the first $25,000 of taxable income and the second $25,000 of taxable income shall each be allocated among the component members of a controlled group of corporations in the same manner as the surtax exemption is allocated” after “unequal allocation of such amounts” and struck out “or his delegate” after “Secretary” in two places.
Subsec. (a)(3). Pub. L. 94–455, § 1901(b)(1)(J)(v), substituted “804(a)(3)” for “804(a)(4)” after “under sections”.
1975—Subsec. (a)(1). Pub. L. 94–164 struck out “$25,000” in par. (1) as par. (1) is in effect for taxable years ending after
Pub. L. 94–12, § 303(c)(1), substituted “$50,000” for “$25,000”.
Subsec. (a)(2). Pub. L. 94–12, § 304(b), substituted “$150,000” for “$100,000”.
1969—Pub. L. 91–172 provided, with respect to taxable years beginning after
Effective Date Of Amendment
Amendment by Pub. L. 104–188 effective as if included in the provision of the Revenue Reconciliation Act of 1993, Pub. L. 103–66, §§ 13001–13444, to which such amendment relates, see section 1703(o) of Pub. L. 104–188, set out as a note under section 39 of this title.
Amendment by Pub. L. 100–647 effective, except as otherwise provided, as if included in the provisions of the Revenue Act of 1987, Pub. L. 100–203, title X, to which such amendment relates, see section 2004(u) of Pub. L. 100–647, set out as a note under section 56 of this title.
Amendment by Pub. L. 99–514 applicable to taxable years beginning after
Amendment by Pub. L. 99–499 applicable to taxable years beginning after
Amendment by section 66(b) of Pub. L. 98–369 applicable to taxable years beginning after
Amendment by section 211(b)(21) of Pub. L. 98–369 applicable to taxable years beginning after
Termination Date
Pub. L. 97–248, title II, § 263(a)(1),
Effective Date Of Amendment
Amendment by Pub. L. 97–34 applicable to taxable years beginning after
Amendment by section 301(b)(19) of Pub. L. 95–600 applicable to taxable years beginning after
Amendment by section 703(j)(7) of Pub. L. 95–600 effective on
Miscellaneous
Amendment by section 901(c)(1) of Pub. L. 94–455 applicable to taxable years ending after
Amendment by section 1901(b)(1)(J)(v) of Pub. L. 94–455 effective for taxable years beginning after
Effective Date Of Amendment
Amendment by Pub. L. 94–164 applicable to taxable years beginning after
Amendment by section 303(c)(1) of Pub. L. 94–12 applicable to taxable years ending after
Amendment by section 304(b) of Pub. L. 94–12 applicable to taxable years beginning after
Pub. L. 91–172, title IV, § 401(h),
Effective Date
Section applicable with respect to taxable years ending after
Miscellaneous
For applicability of amendment by section 701(e)(2) of Pub. L. 99–514 notwithstanding any treaty obligation of the United States in effect on