26 USC 961 - Adjustments to basis of stock in controlled foreign corporations and of other property

U.S Code last checked for updates: Nov 22, 2024

§ 961.

Adjustments to basis of stock in controlled foreign corporations and of other property

(a)

Increase in basis

(b)

Reduction in basis

(1)

In general

(2)

Amount in excess of basis

(c)

Basis adjustments in stock held by foreign corporations

Under regulations prescribed by the Secretary, if a United States shareholder is treated under section 958(a)(2) as owning stock in a controlled foreign corporation which is owned by another controlled foreign corporation, then adjustments similar to the adjustments provided by subsections (a) and (b) shall be made to—

(1)

the basis of such stock, and

(2)

the basis of stock in any other controlled foreign corporation by reason of which the United States shareholder is considered under section 958(a)(2) as owning the stock described in paragraph (1),

but only for the purposes of determining the amount included under section 951 in the gross income of such United States shareholder (or any other United States shareholder who acquires from any person any portion of the interest of such United States shareholder by reason of which such shareholder was treated as owning such stock, but only to the extent of such portion, and subject to such proof of identity of such interest as the Secretary may prescribe by regulations). The preceding sentence shall not apply with respect to any stock to which a basis adjustment applies under subsection (a) or (b).

(d)

Basis in specified 10-percent owned foreign corporation reduced by nontaxed portion of dividend for purposes of determining loss

(Added Pub. L. 87–834, § 12(a), Oct. 16, 1962, 76 Stat. 1022; amended Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 105–34, title XI, § 1112(b)(1), Aug. 5, 1997, 111 Stat. 969; Pub. L. 109–135, title IV, § 409(b), Dec. 21, 2005, 119 Stat. 2635; Pub. L. 115–97, title I, § 14102(b)(1), Dec. 22, 2017, 131 Stat. 2192.)

cite as: 26 USC 961