IRC 11(a) – Tax imposed
(a) Corporations in general
A tax is hereby imposed for each taxable year on the taxable income of every corporation.
IRC 7701(a)(3) – Definitions
The term “corporation” includes associations, joint-stock companies, and insurance companies.
The term “domestic” when applied to a corporation or partnership means created or organized in the United States or under the law of the United States or of any State unless, in the case of a partnership, the Secretary provides otherwise by regulations.
The term “foreign” when applied to a corporation or partnership means a corporation or partnership which is not domestic.
Reg 301-7701-3(a); 301-7701-3(b)(1); 301-7701-3(c)
Section 301.7701-3(a) provides that a business entity that is not classified as a corporation under § 301.7701-2(b)(1), (3), (4), (5), (6), (7), or (8) (an eligible entity) can elect its classification for federal tax purposes. Elections are necessary only when an eligible entity does not want to be classified under the default classification or when an eligible entity chooses to change its classification.
Section 301-7701-3(b)(2)(i) provides that, except for certain existing entities described in § 301-7701-3(b)(3), unless a domestic eligible entity elects otherwise, the entity is (A) a partnership if it has two or more members; or (B) disregarded as an entity separate from its owner if it has a single owner.
Section 301.7701-3(c)(1)(i) provides that an eligible entity may elect to be classified other than as provided under § 301-7701-3(b)(2) by filing Form 8832 with the appropriate service center. Under § 301-7701-3(c)(1)(iii), this election will be effective on the date specified by the entity on Form 8832 or on the date filed if no such date is specified. The date specified on Form 8832 cannot be more than 75 days prior to the date on which the election is filed and no more than 12 months after the date the election is filed.
IRC 243 – Dividends received by corporations
(a) General rule
In the case of a corporation, there shall be allowed as a deduction an amount equal to the following percentages of the amount received as dividends from a domestic corporation which is subject to taxation under this chapter: (1) 70 percent, in the case of dividends other than dividends described in paragraph (2) or (3); (2) 100 percent, in the case of dividends received by a small business investment company operating under the Small Business Investment Act of 1958 (15 U.S.C. 661 and following); and (3) 100 percent, in the case of qualifying dividends (as defined in subsection (b)(1)). (b) Qualifying dividends
(1) In general
For purposes of this section, the term “qualifying dividend” means any dividend received by a corporation— (A) if at the close of the day on which such dividend is received, such corporation is a member of the same affiliated group as the corporation distributing such dividend, and (B) if—
(i) such dividend is distributed out of the earnings and profits of a taxable year of the distributing corporation which ends after December 31, 1963, for which an election under section 1562 was not in effect, and on each day of which the distributing corporation and the corporation receiving the dividend were members of such affiliated group, or (ii) such dividend is paid by a corporation with respect to which an election under section 936 is in effect for the taxable year in which such dividend is paid. (2) Affiliated group
For purposes of this subsection:
(A) In general
The term “affiliated group” has the meaning given such term by section 1504 (a), except that for such purposes sections 1504 (b)(2), 1504 (b)(4), and 1504 (c) shall not apply. (B) Group must be consistent in foreign tax treatment
The requirements of paragraph (1)(A) shall not be treated as being met with respect to any dividend received by a corporation if, for any taxable year which includes the day on which such dividend is received— (i) 1 or more members of the affiliated group referred to in paragraph (1)(A) choose to any extent to take the benefits of section 901, and (ii) 1 or more other members of such group claim to any extent a deduction for taxes otherwise creditable under section 901. (3) Special rule for groups which include life insurance companies (A) In general
In the case of an affiliated group which includes 1 or more insurance companies under section 801, no dividend by any member of such group shall be treated as a qualifying dividend unless an election under this paragraph is in effect for the taxable year in which the dividend is received. The preceding sentence shall not apply in the case of a dividend described in paragraph (1)(B)(ii). (B) Effect of election
If an election under this paragraph is in effect with respect to any affiliated group— (i) part II of subchapter B of chapter 6 (relating to certain controlled corporations) shall be applied with respect to the members of such group without regard to sections 1563 (a)(4) and 1563 (b)(2)(D), and (ii) for purposes of this subsection, a distribution by any member of such group which is subject to tax under section 801 shall not be treated as a qualifying dividend if such distribution is out of earnings and profits for a taxable year for which an election under this paragraph is not effective and for which such distributing corporation was not a component member of a controlled group of corporations within the meaning of section 1563 solely by reason of section 1563 (b)(2)(D). (C) Election
An election under this paragraph shall be made by the common parent of the affiliated group and at such time and in such manner as the Secretary shall by regulations prescribe. Any such election shall be binding on all members of such group and may be revoked only with the consent of the Secretary. (c) Retention of 80-percent dividends received deduction for dividends from 20-percent owned corporations (1) In general
In the case of any dividend received from a 20-percent owned corporation— (A) subsection (a)(1) of this section, and
(B) subsections (a)(3) and (b)(2) ofsection 244,
shall be applied by substituting “80 percent” for “70 percent”. (2) 20-percent owned corporation
For purposes of this section, the term “20-percent owned corporation” means any corporation if 20 percent or more of the stock of such corporation (by vote and value) is owned by the taxpayer. For purposes of the preceding sentence, stock described in section 1504 (a)(4) shall not be taken into account. (d) Special rules for certain distributions
For purposes of subsection (a)—
(1) Any amount allowed as a deduction under section 591 (relating to deduction for dividends paid by mutual savings banks, etc.) shall not be treated as a dividend. (2) A dividend received from a regulated investment company shall be subject to the limitations prescribed in section 854. (3) Any dividend received from a real estate investment trust which, for the taxable year of the trust in which the dividend is paid, qualifies under part II of subchapter M (section 856 and following) shall not be treated as a dividend. (4) Any dividend received which is described in section 244 (relating to dividends received on preferred stock of a public utility) shall not be treated as a dividend. (e) Certain dividends from foreign corporations
For purposes of subsection (a) and for purposes of section 245, any dividend from a foreign corporation from earnings and profits accumulated by a domestic corporation during a period with respect to which such domestic corporation was subject to taxation under this chapter (or corresponding provisions of prior law) shall be treated as a dividend from a domestic corporation which is subject to taxation under this chapter.
IRC 246(b), 246(c) – Rules applying to deductions for dividends received (b) Limitation on aggregate amount of deductions
(1) General rule
Except as provided in paragraph (2), the aggregate amount of the deductions allowed by sections 243 (a)(1), 244 (a), andsubsection (a) or (b) ofsection 245 shall not exceed the percentage determined under paragraph (3) of the taxable income computed without regard to the deductions allowed by sections 172, 199, 243 (a)(1), 244 (a),subsection (a) or (b) ofsection 245, and 247, without regard to any adjustment under section 1059, and without regard to any capital loss carryback to the taxable year under section 1212 (a)(1). (2) Effect of net operating loss
Paragraph (1) shall not apply for any taxable year for which there is a net operating loss (as determined under section 172). (3) Special rules
The provisions of paragraph (1) shall be applied—
(A) first separately with respect to dividends from 20-percent owned corporations (as defined in section 243 (c)(2)) and the percentage determined under this paragraph shall be 80 percent, and (B) then separately with respect to dividends not from 20-percent owned corporations and the percentage determined under this paragraph shall be 70 percent and the taxable income shall be reduced by the aggregate amount of dividends from 20-percent owned corporations (as so defined). (c) Exclusion of certain dividends
(1) In general
No deduction shall be allowed under section 243, 244, or 245, in respect of any dividend on any share of stock— (A) which is held by the taxpayer for 45 days or less during the 91-day period beginning on the date which is 45 days before the date on which such share becomes ex-dividend with respect to such dividend, or (B) to the extent that the taxpayer is under an obligation (whether pursuant to a short sale or otherwise) to make related payments with respect to positions in substantially similar or related property. (2) 90-day rule in the case of certain preference dividends
In the case of stock having preference in dividends, if the taxpayer receives dividends with respect to such stock which are attributable to a period or periods aggregating in excess of 366 days, paragraph (1)(A) shall be applied— (A) by substituting “90 days” for “45 days” each place it appears, and (B) by substituting “181-day period” for “91-day period”. (3) Determination of holding periods
For purposes of this subsection, in determining the period for which the taxpayer has held any share of stock— (A) the day of disposition, but not the day of acquisition, shall be taken into account, and (B) paragraph (3) of section 1223 shall not apply.
(4) Holding period reduced for periods where risk of loss diminished The holding periods determined for purposes of this subsection shall be appropriately reduced (in the manner provided in regulations prescribed by the Secretary) for any period (during such periods) in which— (A) the taxpayer has an option to sell, is under a contractual obligation to sell, or has made (and not closed) a short sale of, substantially identical stock or securities, (B) the taxpayer is the grantor of an option to buy substantially identical stock or securities, or (C) under regulations prescribed by the Secretary, a taxpayer has diminished his risk of loss by holding 1 or more other positions with respect to substantially similar or related property. The preceding sentence shall not apply in the case of any qualified covered call (as defined in section 1092 (c)(4) but without regard to the requirement that gain or loss with respect to the option not be ordinary income or loss), other than a qualified covered call option to which section 1092 (f) applies.
IRC 248 – Organizational expenditures
(a) Election to deduct
If a corporation elects the application of this subsection (in accordance with regulations prescribed by the Secretary) with respect to any organizational expenditures— (1) the corporation shall be allowed a deduction for the taxable year in which the corporation begins business in an amount equal to the lesser of— (A) the amount of organizational expenditures with respect to the taxpayer, or (B) $5,000, reduced (but not below zero) by the amount by which such organizational expenditures exceed $50,000, and (2) the remainder of such organizational expenditures shall be allowed as a deduction ratably over the 180-month period beginning with the month in which the corporation begins business. (b) Organizational expenditures defined
The term “organizational expenditures” means any expenditure which— (1) is incident to the creation of the corporation;
(2) is chargeable to capital account; and
(3) is of a character which, if expended incident to the creation of a corporation having a limited life, would be amortizable over such life. (c) Time for and scope of election
The election provided by subsection (a) may be made for any taxable year beginning after December 31, 1953, but only if made not later than the time prescribed by law for filing the return for such taxable year (including extensions thereof). The period so elected shall be adhered to in computing the taxable income of the corporation for the taxable year for which the election is made and all subsequent taxable years. The election shall apply only with respect to expenditures paid or incurred on or after August 16, 1954.
IRC 170(a)(2), 170(b)(2), 170(d)(2) – Charitable, etc., contributions and gifts (a) Allowance of deduction
(2) Corporations on accrual basis
In the case of a corporation reporting its taxable income on the accrual basis, if— (A) the board of directors authorizes a charitable contribution during any taxable year, and (B) payment of such contribution is made after the close of such taxable year and on or before the 15th day of the third month following the close of such taxable year, then the taxpayer may elect to treat such contribution as paid during such taxable year. The election may be made only at the time of the filing of the return for such taxable year, and shall be signified in such manner as the Secretary shall by regulations prescribe.
(b) Percentage limitations
In the case of a corporation—
(A) In general
The total deductions under subsection (a) for any taxable year (other than for contributions to which subparagraph (B) applies) shall not exceed 10 percent of the taxpayer’s taxable income. (B) Qualified conservation contributions by certain corporate farmers and ranchers (i) In general Any qualified conservation contribution (as defined in subsection (h)(1))— (I) which is made by a corporation which, for the taxable year during which the contribution is made, is a qualified farmer or rancher (as defined in paragraph (1)(E)(v)) and the stock of which is not readily tradable on an established securities market at any time during such year, and (II) which, in the case of contributions made after the date of the enactment of this subparagraph, is a contribution of property which is used in agriculture or livestock production (or available for such production) and which is subject to a restriction that such property remain available for such production, shall be allowed to the extent the aggregate of such contributions does not exceed the excess of the taxpayer’s taxable income over the amount of charitable contributions allowable under subparagraph (A).
(ii) Carryover If the aggregate amount of contributions described in clause (i) exceeds the limitation of clause (i), such excess shall be treated (in a manner consistent with the rules of subsection (d)(2)) as a charitable contribution to which clause (i) applies in each of the 15 succeeding years in order of time. (iii) Termination This subparagraph shall not apply to any contribution made in taxable years beginning after December 31, 2011. (C) Taxable income
For purposes of this paragraph, taxable income shall be computed without regard to— (i) this section,
(ii) part VIII (except section 248),
(iii) any net operating loss carryback to the taxable year under section 172, (iv) section 199, and
(v) any capital loss carryback to the taxable year under section 1212 (a)(1).
(d) Carryovers of excess contributions
(A) In general
Any contribution made by a corporation in a taxable year (hereinafter in this paragraph referred to as the “contribution year”) in excess of the amount deductible for such year under subsection (b)(2)(A) shall be deductible for each of the 5 succeeding taxable years in order of time, but only to the extent of the lesser of the two following amounts: (i) the excess of the maximum amount deductible for such succeeding taxable year under subsection (b)(2)(A) over the sum of the contributions made in such year plus the aggregate of the excess contributions which were made in taxable years before the contribution year and which are deductible under this subparagraph for such succeeding taxable year; or (ii) in the case of the first succeeding taxable year, the amount of such excess contribution, and in the case of the second, third, fourth, or fifth succeeding taxable year, the portion of such excess contribution not deductible under this subparagraph for any taxable year intervening between the contribution year and such succeeding taxable year. (B) Special rule for net operating loss carryovers
For purposes of subparagraph (A), the excess of—
(i) the contributions made by a corporation in a taxable year to which this section applies, over (ii) the amount deductible in such year under the limitation in subsection (b)(2)(A), shall be reduced to the extent that such excess reduces taxable income (as computed for purposes of the second sentence of section 172 (b)(2)) and increases a net operating loss carryover under section 172 to a succeeding taxable year.
IRC 291(a)(1) – Special rules relating to corporate preference items (a) Reduction in certain preference items, etc.
(1) Section 1250 capital gain treatment
In the case of section 1250 property which is disposed of during the taxable year, 20 percent of the excess (if any) of— (A) the amount which would be treated as ordinary income if such property was section 1245 property, over (B) the amount treated as ordinary income under section 1250 (determined without regard to this paragraph), shall be treated as gain which is ordinary income under section 1250 and shall be recognized notwithstanding any other provision of this title. Under regulations prescribed by the Secretary, the provisions of this paragraph shall not apply to the disposition of any property to the extent section 1250 (a) does not apply to such disposition by reason of section 1250 (d).