26 U.S.C. § 563 — Rules relating to dividends paid after close of taxable year

submitted 72 years ago by ch. 736 to r/title-26-INTERNAL-REVENUE-CODE · 271 words · no verdicts yet

in plain englishAI-generated · not legal advice

A dividend paid shortly after a tax year may count as paid during that year for two specified corporate taxes. Special limits apply, and certain distributions count as made on the last day of the year.

(a) Accumulated earnings tax. For the dividends-paid deduction used to calculate the tax under section 531, a dividend paid after a tax year ends but no later than the 15th day of the fourth month after that year ends is treated as paid during that tax year. (b) Personal holding company tax. For the dividends-paid deduction used to calculate the tax under section 541, such a dividend is treated as paid during that tax year only if the taxpayer elects this treatment on its return. The amount treated as a dividend under this subsection may not exceed either (1) the corporation’s undistributed personal holding company income for that year, calculated without this subsection, or (2) 20 percent of the dividends paid during that year, also calculated without this subsection. (c) Dividends treated as paid on the last day. For applying section 562(a), a distribution covered by subsection (a) or (b) that is made after the tax year ends and by the 15th day of the fourth following month is treated as made on the last day of that tax year.

the actual law source: uscode.house.gov ↗public domain

(a) Accumulated earnings tax

In the determination of the dividends paid deduction for purposes of the accumulated earnings tax imposed by section 531, a dividend paid after the close of any taxable year and on or before the 15th day of the fourth month following the close of such taxable year shall be considered as paid during such taxable year.

(b) Personal holding company tax

In the determination of the dividends paid deduction for purposes of the personal holding company tax imposed by section 541, a dividend paid after the close of any taxable year and on or before the 15th day of the fourth month following the close of such taxable year shall, to the extent the taxpayer elects in its return for the taxable year, be considered as paid during such taxable year. The amount allowed as a dividend by reason of the application of this subsection with respect to any taxable year shall not exceed either—

(1)

The undistributed personal holding company income of the corporation for the taxable year, computed without regard to this subsection, or

(2)

20 percent of the sum of the dividends paid during the taxable year, computed without regard to this subsection.

For the purpose of applying section 562(a), with respect to distributions under subsection (a) or (b) of this section, a distribution made after the close of a taxable year and on or before the 15th day of the fourth month following the close of the taxable year shall be considered as made on the last day of such taxable year.

Source credit: (Aug. 16, 1954, ch. 736, 68A Stat. 199; Pub. L. 91–172, title IX, § 914(a), Dec. 30, 1969, 83 Stat. 723; Pub. L. 101–239, title VII, § 7401(b), Dec. 19, 1989, 103 Stat. 2356; Pub. L. 108–357, title IV, § 413(c)(10), Oct. 22, 2004, 118 Stat. 1507; Pub. L. 114–41, title II, § 2006(a)(2)(B), July 31, 2015, 129 Stat. 457.)

history & why it existsrecord from the source credit

1954Enacted · Act of Aug. 16, 1954, ch. 736
1969Amended · Pub. L. 91-172 · 83 Stat. 723
1989Amended · Pub. L. 101-239 · 103 Stat. 2356
2004Amended · Pub. L. 108-357 · 118 Stat. 1507
2015Amended · Pub. L. 114-41 · 129 Stat. 457

A history note hasn’t been published yet. The record shows enactment by ch. 736 on 1954-08-16.

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