26 USC 456 - Prepaid dues income of certain membership organizations

If the liability described in subsection (e)(2) ends, then so much of such income as was not includible in gross income under subsection (a) for preceding taxable years shall be included in gross income for the taxable year in which the liability ends.

(2)

If the taxpayer ceases to exist, then so much of such income as was not includible in gross income under subsection (a) for preceding taxable years shall be included in gross income for the taxable year in which such cessation of existence occurs.

(c)

Prepaid dues income to which this section applies

(1)

Election of benefits

(2)

Scope of election

(3)

When election may be made

(A)

With consent

(B)

Without consent

(4)

Period to which election applies

(d)

Transitional rule

(1)

Amount includible in gross income for election years

(2)

Deductions of amounts included in income more than once

(e)

Definitions

For purposes of this section—

(1)

Prepaid dues income

(2)

Liability

(3)

Membership organization

The term “membership organization” means a corporation, association, federation, or other organization—

(A)

organized without capital stock of any kind, and

(B)

no part of the net earnings of which is distributable to any member.

(4)

Receipt of prepaid dues income

(Added Pub. L. 87–109, § 1(a), July 26, 1961, 75 Stat. 222; amended Pub. L. 94–455, title XIX, §§ 1901(a)(68), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1775, 1834.)

cite as: 26 USC 456

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