26 USC 898 - Taxable year of certain foreign corporations

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

§ 898.

Taxable year of certain foreign corporations

(a)

General rule

(b)

Specified foreign corporation

For purposes of this section—

(1)

In general

The term “specified foreign corporation” means any foreign corporation—

(A)

which is treated as a controlled foreign corporation for any purpose under subpart F of part III of this subchapter, and

(B)

with respect to which the ownership requirements of paragraph (2) are met.

(2)

Ownership requirements

(A)

In general

The ownership requirements of this paragraph are met with respect to any foreign corporation if a United States shareholder owns, on each testing day, more than 50 percent of—

(i)

the total voting power of all classes of stock of such corporation entitled to vote, or

(ii)

the total value of all classes of stock of such corporation.

(B)

Ownership

(3)

United States shareholder

(c)

Determination of required year

(1)

In general

The required year is—

(A)

the majority U.S. shareholder year, or

(B)

if there is no majority U.S. shareholder year, the taxable year prescribed under regulations.

(2)

1-month deferral allowed

(3)

Majority U.S. shareholder year

(A)

In general

For purposes of this subsection, the term “majority U.S. shareholder year” means the taxable year (if any) which, on each testing day, constituted the taxable year of—

(i)

each United States shareholder described in subsection (b)(2)(A), and

(ii)

each United States shareholder not described in clause (i) whose stock was treated as owned under subsection (b)(2)(B) by any shareholder described in such clause.

(B)

Testing day

The testing days shall be—

(i)

the first day of the corporation’s taxable year (determined without regard to this section), or

(ii)

the days during such representative period as the Secretary may prescribe.

(Added Pub. L. 101–239, title VII, § 7401(a), Dec. 19, 1989, 103 Stat. 2355; amended Pub. L. 108–357, title IV, § 413(c)(13), Oct. 22, 2004, 118 Stat. 1507.)

cite as: 26 USC 898