26 USC 1294 - Election to extend time for payment of tax on undistributed earnings

U.S Code last checked for updates: Nov 23, 2024

§ 1294.

Election to extend time for payment of tax on undistributed earnings

(a)

Extension allowed by election

(1)

In general

(2)

Election not permitted where amounts otherwise includible under section 951

(b)

Definitions

For purposes of this section—

(1)

Undistributed PFIC earnings tax liability

The term “undistributed PFIC earnings tax liability” means, in the case of any taxpayer, the excess of—

(A)

the tax imposed by this chapter for the taxable year, over

(B)

the tax which would be imposed by this chapter for such year without regard to the inclusion in gross income under section 1293 of the undistributed earnings of a qualified electing fund.

(2)

The term “undistributed earnings” means, with respect to any qualified electing fund, the excess (if any) of—

(A)

the amount includible in gross income by reason of section 1293(a) for the taxable year, over

(B)

the amount not includible in gross income by reason of section 1293(c) for such taxable year.

(c)

Termination of extension

(1)

Distributions

(A)

In general

(B)

Ordering rule

(2)

Transfers, etc.

If—

(A)

stock in a passive foreign investment company is transferred during the taxable year, or

(B)

a passive foreign investment company ceases to be a qualified electing fund,

all extensions under subsection (a) for payment of undistributed PFIC earnings tax liability attributable to such stock (or, in the case of such a cessation, attributable to any stock in such company) which had not expired before the date of such transfer or cessation shall expire on the last date prescribed by law (determined without regard to extensions) for filing the return of tax for the taxable year in which such transfer or cessation occurs. To the extent provided in regulations, the preceding sentence shall not apply in the case of a transfer in a transaction with respect to which gain or loss is not recognized (in whole or in part), and the transferee in such transaction shall succeed to the treatment under this section of the transferor.

(3)

Jeopardy

(d)

Election

(e)

Authority to require bond

(f)

Treatment of loans to shareholder

(g)

Cross reference

(Added Pub. L. 99–514, title XII, § 1235(a), Oct. 22, 1986, 100 Stat. 2570; amended Pub. L. 100–647, title I, § 1012(p)(4), (8), (25), (34), Nov. 10, 1988, 102 Stat. 3515, 3517, 3519, 3522; Pub. L. 108–357, title IV, § 413(c)(25), Oct. 22, 2004, 118 Stat. 1509.)

cite as: 26 USC 1294