r/title-26-INTERNAL-REVENUE-CODE wiki — defined terms

“specified tax-exempt entity” applies in that section

the term “specified tax-exempt entity” means— (i) the United States, any State or political subdivision thereof, any possession of the United States, or any agency or instrumentality of any of the foregoing, (ii) an Indian tribal government (as defined in section 30D(g)(9)) or Alaska Native Corporation (as defined in section 3 of the Alaska Native Claims Settlement Act ( 43 U.S.C. 1602(m) ), 1 and (iii) any organization exempt from tax imposed by this chapter.

“advanced mine safety equipment property” applies in that section

the term “advanced mine safety equipment property” means any of the following: (1) Emergency communication technology or device which is used to allow a miner to maintain constant communication with an individual who is not in the mine. (2) Electronic identification and location device which allows an individual who is not in the mine to track at all times the movements and location of miners working in or at the mine. (3) Emergency oxygen-generating, self-rescue device which provides oxygen for at least 90 minutes.

“qualified advanced mine safety equipment property” applies in that section

the term “qualified advanced mine safety equipment property” means any advanced mine safety equipment property for use in any underground mine located in the United States— (1) the original use of which commences with the taxpayer, and (2) which is placed in service by the taxpayer after the date of the enactment of this section. (d) Advanced mine safety equipment property For purposes of this section,

“land used in farming” applies in that section

the term “land used in farming” means land used (before or simultaneously with the expenditures described in subsection (a)) by the taxpayer or his tenant for the production of crops, fruits, or other agricultural products or for the sustenance of livestock. (c) Election The election under subsection (a) for any taxable year shall be made within the time prescribed by law (including extensions thereof) for filing the return for such taxable year. Such election shall be made in such manner as the Secretary may by regulations prescribe. Such election may not be revoked except with the consent of the Secretary.

“qualified compensation” applies in that section

The term “qualified compensation” means compensation for services performed in the United States by actors, production personnel, directors, and producers. (B) Participations and residuals excluded The term “compensation” does not include participations and residuals (as defined in section 167(g)(7)(B)). (e) Qualified live theatrical production For purposes of this section— (1) In general

“qualified film or television production” applies in that section

The term “qualified film or television production” means any production described in paragraph (2) if 75 percent of the total compensation of the production is qualified compensation. (2) Production (A) In general A production is described in this paragraph if such production is property described in section 168(f)(3). (B) Special rules for television series In the case of a television series— (i) each episode of such series shall be treated as a separate production, and (ii) only the first 44 episodes of such series shall be taken into account.

“qualified live theatrical production” applies in that section

The term “qualified live theatrical production” means any production described in paragraph (2) if 75 percent of the total compensation of the production is qualified compensation (as defined in subsection (d)(3)). (2) Production (A) In general A production is described in this paragraph if such production is a live staged production of a play (with or without music) which is derived from a written book or script and is produced or presented by a taxable entity in any venue which has an audience capacity of not more than 3,000 or a series of venues the majority of which have an audience capacity of not more than 3,000. (B) Touring companies, etc.

“qualified sound recording production” applies in that section

the term “qualified sound recording production” means a sound recording (as defined in section 101 of title 17 , United States Code) produced and recorded in the United States. (g) Application of certain other rules For purposes of this section, rules similar to the rules of subsections (b)(2) and (c)(4) of section 194 shall apply. (h) Termination This section shall not apply to qualified film and television productions, qualified live theatrical productions, or qualified sound recording productions commencing after December 31, 2025 .

“activity not engaged in for profit” applies in that section

the term “activity not engaged in for profit” means any activity other than one with respect to which deductions are allowable for the taxable year under section 162 or under paragraph (1) or (2) of section 212.

“compensable injury” applies in that section

the term “compensable injury” means— (1) injuries sustained as a result of an infringement of a patent issued by the United States, (2) injuries sustained as a result of a breach of contract or a breach of fiduciary duty or relationship, or (3) injuries sustained in business, or to property, by reason of any conduct forbidden in the antitrust laws for which a civil action may be brought under section 4 of the Act entitled “An Act to supplement existing laws against unlawful restraints and monopolies, and for other purposes”, approved October 15, 1914 (commonly known as the Clayton Act). (c) Compensatory amount For purposes of this section,

“compensatory amount” applies in that section

the term “compensatory amount” means the amount received or accrued during the taxable year as damages as a result of an award in, or in settlement of, a civil action for recovery for a compensable injury, reduced by any amounts paid or incurred in the taxable year in securing such award or settlement.

“architectural and transportation barrier removal expenses” applies in that section

The term “architectural and transportation barrier removal expenses” means an expenditure for the purpose of making any facility or public transportation vehicle owned or leased by the taxpayer for use in connection with his trade or business more accessible to, and usable by, handicapped and elderly individuals. (2) Qualified architectural and transportation barrier removal expenses

“handicapped individual” applies in that section

The term “handicapped individual” means any individual who has a physical or mental disability (including, but not limited to, blindness or deafness) which for such individual constitutes or results in a functional limitation to employment, or who has any physical or mental impairment (including, but not limited to, a sight or hearing impairment) which substantially limits one or more major life activities of such individual. (c) Limitation The deduction allowed by subsection (a) for any taxable year shall not exceed $15,000.

“qualified architectural and transportation barrier removal expense” applies in that section

The term “qualified architectural and transportation barrier removal expense” means, with respect to any such facility or public transportation vehicle, an architectural or transportation barrier removal expense with respect to which the taxpayer establishes, to the satisfaction of the Secretary, that the resulting removal of any such barrier meets the standards promulgated by the Secretary with the concurrence of the Architectural and Transportation Barriers Compliance Board and set forth in regulations prescribed by the Secretary. (3) Handicapped individual

“black lung benefit claim” applies in that section

the term “black lung benefit claim” means a claim for compensation for disability or death due to pneumoconiosis under part C of title IV of the Federal Mine Safety and Health Act of 1977 or under any State law providing for such compensation.

“miner” applies in that section

the term “miner” has the same meaning as such term has when used in section 402(d) of the Black Lung Benefits Act ( 30 U.S.C. 902(d) ). (C) Different funding periods To the extent that— (i) regulations prescribed by the Secretary provide for a different period, or (ii) the Secretary consents to a different period proposed by the taxpayer, such different period shall be substituted for the funding period provided in subparagraph (B). (2) Benefit payments taken into account In determining the amounts described in subsection (b), only those black lung benefit claims the payment of which is expected to be made from the trust shall be taken into account.

“hydrocarbon injectant” applies in that section

The term “hydrocarbon injectant” includes natural gas, crude oil, and any other injectant which is comprised of more than an insignificant amount of natural gas or crude oil. The term does not include any tertiary injectant which is hydrocarbon-based, or a hydrocarbon-derivative, and which is comprised of no more than an insignificant amount of natural gas or crude oil. For purposes of this paragraph, that portion of a hydrocarbon injectant which is not a hydrocarbon shall not be treated as a hydrocarbon injectant. (3) Tertiary recovery method

“qualified tertiary injectant expenses” applies in that section

The term “qualified tertiary injectant expenses” means any cost paid or incurred (whether or not chargeable to capital account) for any tertiary injectant (other than a hydrocarbon injectant which is recoverable) which is used as a part of a tertiary recovery method. (2) Hydrocarbon injectant

“tertiary recovery method” applies in that section

The term “tertiary recovery method” means— (A) any method which is described in subparagraphs (1) through (9) of section 212.78(c) of the June 1979 energy regulations (as defined by section 4996(b)(8)(C) as in effect before its repeal), or (B) any other method to provide tertiary enhanced recovery which is approved by the Secretary for purposes of this section. (c) Application with other deductions No deduction shall be allowed under subsection (a) with respect to any expenditure— (1) with respect to which the taxpayer has made an election under section 263(c), or (2) with respect to which a deduction is allowed or allowable to the taxpayer under any other provision of this chapter.

“amortizable basis” applies in that section

The term “amortizable basis” means that portion of the basis of the qualified timber property attributable to reforestation expenditures which have not been taken into account under subsection (b). (3) Reforestation expenditures (A) In general

“controlled group” applies in that section

the term “controlled group” has the meaning assigned to it by section 1563(a), except that the phrase “more than 50 percent” shall be substituted for the phrase “at least 80 percent” each place it appears in section 1563(a)(1). (B) Partnerships and S corporations In the case of a partnership, the dollar limitation contained in paragraph (1)(B) shall apply with respect to the partnership and with respect to each partner. A similar rule shall apply in the case of an S corporation and its shareholders. (c) Definitions and special rule For purposes of this section— (1) Qualified timber property

“qualified timber property” applies in that section

The term “qualified timber property” means a woodlot or other site located in the United States which will contain trees in significant commercial quantities and which is held by the taxpayer for the planting, cultivating, caring for, and cutting of trees for sale or use in the commercial production of timber products. (2) Amortizable basis

“reforestation expenditures” applies in that section

The term “reforestation expenditures” means direct costs incurred in connection with forestation or reforestation by planting or artificial or natural seeding, including costs— (i) for the preparation of the site; (ii) of seeds or seedlings; and (iii) for labor and tools, including depreciation of equipment such as tractors, trucks, tree planters, and similar machines used in planting or seeding. (B) Cost-sharing programs Reforestation expenditures shall not include any expenditures for which the taxpayer has been reimbursed under any governmental reforestation cost-sharing program unless the amounts reimbursed have been included in the gross income of the taxpayer.

“start-up expenditure” applies in that section

The term “start-up expenditure” means any amount— (A) paid or incurred in connection with— (i) investigating the creation or acquisition of an active trade or business, or (ii) creating an active trade or business, or (iii) any activity engaged in for profit and for the production of income before the day on which the active trade or business begins, in anticipation of such activity becoming an active trade or business, and (B) which, if paid or incurred in connection with the operation of an existing active trade or business (in the same field as the trade or business referred to in subparagraph (A)), would be allowable as a deduction for the taxable year in which paid or incurred.

“qualified business credits” applies in that section

the term “qualified business credits” means— (1) the investment credit determined under section 46 (but only to the extent attributable to property the basis of which is reduced by section 50(c)), (2) the work opportunity credit determined under section 51(a), (3) the alcohol fuels credit determined under section 40(a), (4) the research credit determined under section 41(a) (other than such credit determined under section 280C(c)(3)) 1 for taxable years beginning after December 31, 1988 , (5) the enhanced oil recovery credit determined under section 43(a), (6) the empowerment zone employment credit determined under section 1396(a), (7) the Indian employment credit determined under section …

“amortizable section 197 intangible” applies in that section

the term “amortizable section 197 intangible” means any section 197 intangible— (A) which is acquired by the taxpayer after the date of the enactment of this section, and (B) which is held in connection with the conduct of a trade or business or an activity described in section 212. (2) Exclusion of self-created intangibles, etc. The term “amortizable section 197 intangible” shall not include any section 197 intangible— (A) which is not described in subparagraph (D), (E), or (F) of subsection (d)(1), and (B) which is created by the taxpayer.

“computer software” applies in that section

the term “computer software” means any program designed to cause a computer to perform a desired function. Such term shall not include any data base or similar item unless the data base or item is in the public domain and is incidental to the operation of otherwise qualifying computer software. (4) Certain interests or rights acquired separately Any of the following not acquired in a transaction (or series of related transactions) involving the acquisition of assets constituting a trade business or substantial portion thereof: (A) Any interest in a film, sound recording, video tape, book, or similar property.

“customer-based intangible” applies in that section

The term “customer-based intangible” means— (i) composition of market, (ii) market share, and (iii) any other value resulting from future provision of goods or services pursuant to relationships (contractual or otherwise) in the ordinary course of business with customers. (B) Special rule for financial institutions In the case of a financial institution,

“franchise” applies in that section

The term “franchise” has the meaning given to such term by section 1253(b)(1). (B) Treatment of renewals Any renewal of a franchise, trademark, or trade name (or of a license, a permit, or other right referred to in subsection (d)(1)(D)) shall be treated as an acquisition. The preceding sentence shall only apply with respect to costs incurred in connection with such renewal. (C) Certain amounts not taken into account Any amount to which section 1253(d)(1) applies shall not be taken into account under this section.

“section 197 intangible” applies in that section

the term “section 197 intangible” means— (A) goodwill, (B) going concern value, (C) any of the following intangible items: (i) workforce in place including its composition and terms and conditions (contractual or otherwise) of its employment, (ii) business books and records, operating systems, or any other information base (including lists or other information with respect to current or prospective customers), (iii) any patent, copyright, formula, process, design, pattern, knowhow, format, or other similar item, (iv) any customer-based intangible, (v) any supplier-based intangible, and (vi) any other similar item, (D) any license, permit, or other right granted by a governmental unit or an …

“supplier-based intangible” applies in that section

The term “supplier-based intangible” means any value resulting from future acquisitions of goods or services pursuant to relationships (contractual or otherwise) in the ordinary course of business with suppliers of goods or services to be used or sold by the taxpayer. (e) Exceptions For purposes of this section, the term “section 197 intangible” shall not include any of the following: (1) Financial interests Any interest— (A) in a corporation, partnership, trust, or estate, or (B) under an existing futures contract, foreign currency contract, notional principal contract, or other similar financial contract. (2) Land Any interest in land.

“hazardous substance” applies in that section

The term “hazardous substance” means— (A) any substance which is a hazardous substance as defined in section 101(14) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, (B) any substance which is designated as a hazardous substance under section 102 of such Act, and (C) any petroleum product (as defined in section 4612(a)(3)). (2) Exception Such term shall not include any substance with respect to which a removal or remedial action is not permitted under section 104 of such Act by reason of subsection (a)(3) thereof. (e) Deduction recaptured as ordinary income on sale, etc.

“qualified contaminated site” applies in that section

The term “qualified contaminated site” means any area— (A) which is held by the taxpayer for use in a trade or business or for the production of income, or which is property described in section 1221(a)(1) in the hands of the taxpayer, and (B) at or on which there has been a release (or threat of release) or disposal of any hazardous substance. (2) National priorities listed sites not included Such term shall not include any site which is on, or proposed for, the national priorities list under section 105(a)(8)(B) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (as in effect on the date of the enactment of this section).

“qualified environmental remediation expenditure” applies in that section

The term “qualified environmental remediation expenditure” means any expenditure— (A) which is otherwise chargeable to capital account, and (B) which is paid or incurred in connection with the abatement or control of hazardous substances at a qualified contaminated site.

“active qualified trade or business” applies in that section

The term “active qualified trade or business” means, with respect to any taxpayer for any taxable year, any qualified trade or business of the taxpayer in which the taxpayer materially participates (within the meaning of section 469(h)).

“applicable percentage” applies in that section

the term “applicable percentage” means, with respect to any taxable year, 100 percent reduced (not below zero) by the percentage equal to the ratio of— (i) the taxable income of the taxpayer for the taxable year in excess of the threshold amount, bears to (ii) $75,000 ($150,000 in the case of a joint return). (e) Other definitions For purposes of this section— (1) Taxable income Except as otherwise provided in subsection (g)(2)(B), taxable income shall be computed without regard to section 68 and without regard to any deduction allowable under this section. (2) Threshold amount (A) In general

“applicable taxpayer” applies in that section

The term “applicable taxpayer” means, with respect to any taxable year, a taxpayer whose aggregate qualified business income with respect to all active qualified trades or businesses of the taxpayer for such taxable year is at least $1,000. (B) Active qualified trade or business

“combined qualified business income amount” applies in that section

The term “combined qualified business income amount” means, with respect to any taxable year, an amount equal to— (A) the sum of the amounts determined under paragraph (2) for each qualified trade or business carried on by the taxpayer, plus (B) 20 percent of the aggregate amount of the qualified REIT dividends and qualified publicly traded partnership income of the taxpayer for the taxable year.

“depreciable period” applies in that section

The term “depreciable period” means, with respect to qualified property of a taxpayer, the period beginning on the date the property was first placed in service by the taxpayer and ending on the later of— (i) the date that is 10 years after such date, or (ii) the last day of the last full year in the applicable recovery period that would apply to the property under section 168 (determined without regard to subsection (g) thereof).

“domestic production gross receipts” applies in that section

The term “domestic production gross receipts” means the gross receipts of the taxpayer which are derived from any lease, rental, license, sale, exchange, or other disposition of any agricultural or horticultural product which was manufactured, produced, grown, or extracted by the taxpayer (determined after the application of paragraph (4)(B)) in whole or significant part within the United States. Such term shall not include gross receipts of the taxpayer which are derived from the lease, rental, license, sale, exchange, or other disposition of land.

“eligible taxpayer” applies in that section

the term “eligible taxpayer” means— (i) a taxpayer other than a corporation, or (ii) a specified agricultural or horticultural cooperative. (E) Qualified payment For purposes of this section,

“expanded affiliated group” applies in that section

the term “expanded affiliated group” means an affiliated group as defined in section 1504(a), determined— (I) by substituting “more than 50 percent” for “at least 80 percent” each place it appears, and (II) without regard to paragraphs (2) and (4) of section 1504(b). (iv) Allocation of deduction Except as provided in regulations, the deduction under paragraph (1) shall be allocated among the members of the expanded affiliated group in proportion to each member’s respective amount (if any) of qualified production activities income.

“oil related qualified production activities income” applies in that section

the term “oil related qualified production activities income” means for any taxable year the qualified production activities income which is attributable to the production, refining, processing, transportation, or distribution of oil, gas, or any primary product thereof (within the meaning of section 927(a)(2)(C), as in effect before its repeal) during such taxable year. (6) Regulations The Secretary shall prescribe such regulations as are necessary to carry out the purposes of this subsection, including regulations which prevent more than 1 taxpayer from being allowed a deduction under this subsection with respect to any activity described in paragraph (3)(D)(i).

“qualified business income” applies in that section

The term “qualified business income” means, for any taxable year, the net amount of qualified items of income, gain, deduction, and loss with respect to any qualified trade or business of the taxpayer. Such term shall not include any qualified REIT dividends or qualified publicly traded partnership income. (2) Carryover of losses If the net amount of qualified income, gain, deduction, and loss with respect to qualified trades or businesses of the taxpayer for any taxable year is less than zero, such amount shall be treated as a loss from a qualified trade or business in the succeeding taxable year.

“qualified items of income, gain, deduction, and loss” applies in that section

The term “qualified items of income, gain, deduction, and loss” means items of income, gain, deduction, and loss to the extent such items are— (i) effectively connected with the conduct of a trade or business within the United States (within the meaning of section 864(c), determined by substituting “qualified trade or business (within the meaning of section 199A)” for “nonresident alien individual or a foreign corporation” or for “a 1 foreign corporation” each place it appears), and (ii) included or allowed in determining taxable income for the taxable year.

“qualified payment” applies in that section

the term “qualified payment” means, with respect to any eligible taxpayer, any amount which— (i) is described in paragraph (1) or (3) of section 1385(a), (ii) is received by such taxpayer from a specified agricultural or horticultural cooperative, and (iii) is attributable to qualified production activities income with respect to which a deduction is allowed to such cooperative under paragraph (1).

“qualified property” applies in that section

The term “qualified property” means, with respect to any qualified trade or business for a taxable year, tangible property of a character subject to the allowance for depreciation under section 167— (i) which is held by, and available for use in, the qualified trade or business at the close of the taxable year, (ii) which is used at any point during the taxable year in the production of qualified business income, and (iii) the depreciable period for which has not ended before the close of the taxable year. (B) Depreciable period

“qualified publicly traded partnership income” applies in that section

The term “qualified publicly traded partnership income” means, with respect to any qualified trade or business of a taxpayer, the sum of— (A) the net amount of such taxpayer’s allocable share of each qualified item of income, gain, deduction, and loss (as defined in subsection (c)(3) and determined after the application of subsection (c)(4)) from a publicly traded partnership (as defined in section 7704(a)) 2 which is not treated as a corporation under section 7704(c), plus (B) any gain recognized by such taxpayer upon disposition of its interest in such partnership to the extent such gain is treated as an amount realized from the sale or exchange of property other than a capital asset …

“qualified REIT dividend” applies in that section

The term “qualified REIT dividend” means any dividend from a real estate investment trust received during the taxable year which— (A) is not a capital gain dividend, as defined in section 857(b)(3), and (B) is not qualified dividend income, as defined in section 1(h)(11). (4) Qualified publicly traded partnership income

“qualified trade or business” applies in that section

The term “qualified trade or business” means any trade or business other than— (A) a specified service trade or business, or (B) the trade or business of performing services as an employee. (2) Specified service trade or business

“specified agricultural or horticultural cooperative” applies in that section

The term “specified agricultural or horticultural cooperative” means an organization to which part I of subchapter T applies which is engaged— (i) in the manufacturing, production, growth, or extraction in whole or significant part of any agricultural or horticultural product, or (ii) in the marketing of agricultural or horticultural products.

“specified service trade or business” applies in that section

The term “specified service trade or business” means any trade or business— (A) which is described in section 1202(e)(3)(A) (applied without regard to the words “engineering, architecture,”) or which would be so described if the term “employees or owners” were substituted for “employees” therein, or (B) which involves the performance of services that consist of investing and investment management, trading, or dealing in securities (as defined in section 475(c)(2)), partnership interests, or commodities (as defined in section 475(e)(2)).

“threshold amount” applies in that section

The term “threshold amount” means $157,500 (200 percent of such amount in the case of a joint return). (B) Inflation adjustment In the case of any taxable year beginning after 2018, the dollar amount in subparagraph (A) shall be increased by an amount equal to— (i) such dollar amount, multiplied by (ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting “calendar year 2017” for “calendar year 2016” in subparagraph (A)(ii) thereof. The amount of any increase under the preceding sentence shall be rounded as provided in section 1(f)(7). (3) Qualified REIT dividend

“United States” applies in that section

the term “United States” shall include the Commonwealth of Puerto Rico. (ii) Special rule for applying limit In the case of any taxpayer described in clause (i), the determination of W–2 wages of such taxpayer with respect to any qualified trade or business conducted in Puerto Rico shall be made without regard to any exclusion under section 3401(a)(8) for remuneration paid for services in Puerto Rico. (2) Coordination with minimum tax For purposes of determining alternative minimum taxable income under section 55, qualified business income shall be determined without regard to any adjustments under sections 56 through 59.

“W–2 wages” applies in that section

The term “W–2 wages” means, with respect to any person for any taxable year of such person, the amounts described in paragraphs (3) and (8) of section 6051(a) paid by such person with respect to employment of employees by such person during the calendar year ending during such taxable year. (B) Limitation to wages attributable to qualified business income Such term shall not include any amount which is not properly allocable to qualified business income for purposes of subsection (c)(1).

“cosmetic surgery” applies in that section

the term “cosmetic surgery” means any procedure which is directed at improving the patient’s appearance and does not meaningfully promote the proper function of the body or prevent or treat illness or disease. (10) Eligible long-term care premiums.— (A) In general .— For purposes of this section,

“eligible long-term care premiums” applies in that section

the term “eligible long-term care premiums” means the amount paid during a taxable year for any qualified long-term care insurance contract (as defined in section 7702B(b)) covering an individual, to the extent such amount does not exceed the limitation determined under the following table: In the case of an individual with an attained age before the close of the taxable year of: The limitation is: 40 or less $ 200 More than 40 but not more than 50 375 More than 50 but not more than 60 750 More than 60 but not more than 70 2,000 More than 70 2,500.

“medical care” applies in that section

The term “medical care” means amounts paid— (A) for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body, (B) for transportation primarily for and essential to medical care referred to in subparagraph (A), (C) for qualified long-term care services (as defined in section 7702B(c)), or (D) for insurance (including amounts paid as premiums under part B of title XVIII of the Social Security Act, relating to supplementary medical insurance for the aged) covering medical care referred to in subparagraphs (A) and (B) or for any qualified long-term care insurance contract (as defined in section 7702B(b)).

“physician” applies in that section

The term “physician” has the meaning given to such term by section 1861(r) of the Social Security Act ( 42 U.S.C. 1395x(r) ). (5) Special rule in the case of child of divorced parents, etc .— Any child to whom section 152(e) applies shall be treated as a dependent of both parents for purposes of this section.

“prescribed drug” applies in that section

The term “prescribed drug” means a drug or biological which requires a prescription of a physician for its use by an individual. (4) Physician .—

“relative” applies in that section

the term “relative” means an individual bearing a relationship to the individual which is described in any of subparagraphs (A) through (G) of section 152(d)(2). This paragraph shall not apply for purposes of section 105(b) with respect to reimbursements through insurance. (e) Exclusion of amounts allowed for care of certain dependents Any expense allowed as a credit under section 21 shall not be treated as an expense paid for medical care.

“cooperative housing corporation” applies in that section

The term “cooperative housing corporation” means a corporation— (A) having one and only one class of stock outstanding, (B) each of the stockholders of which is entitled, solely by reason of his ownership of stock in the corporation, to occupy for dwelling purposes a house, or an apartment in a building, owned or leased by such corporation, (C) no stockholder of which is entitled (either conditionally or unconditionally) to receive any distribution not out of earnings and profits of the corporation except on a complete or partial liquidation of the corporation, and (D) meeting 1 or more of the following requirements for the taxable year in which the taxes and interest described in …

“original seller” applies in that section

the term “original seller” means the person from whom the corporation has acquired the apartments or houses (or leaseholds therein). (c) Treatment as property subject to depreciation (1) In general So much of the stock of a tenant-stockholder in a cooperative housing corporation as is allocable, under regulations prescribed by the Secretary, to a proprietary lease or right of tenancy in property subject to the allowance for depreciation under section 167(a) shall, to the extent such proprietary lease or right of tenancy is used by such tenant-stockholder in a trade or business or for the production of income, be treated as property subject to the allowance for depreciation under section …

“tenant-stockholder” applies in that section

The term “tenant-stockholder” means a person who is a stockholder in a cooperative housing corporation, and whose stock is fully paid-up in an amount not less than an amount shown to the satisfaction of the Secretary as bearing a reasonable relationship to the portion of the value of the corporation’s equity in the houses or apartment building and the land on which situated which is attributable to the house or apartment which such person is entitled to occupy. (3) Tenant-stockholder’s proportionate share (A) In general Except as provided in subparagraph (B),

“tenant-stockholder’s proportionate share” applies in that section

the term “tenant-stockholder’s proportionate share” means that proportion which the stock of the cooperative housing corporation owned by the tenant-stockholder is of the total outstanding stock of the corporation (including any stock held by the corporation).

“foreign move” applies in that section

the term “foreign move” means the commencement of work by the taxpayer at a new principal place of work located outside the United States. (3) United States defined For purposes of this subsection and subsection (i),

“moving expenses” applies in that section

the term “moving expenses” means only the reasonable expenses— (A) of moving household goods and personal effects from the former residence to the new residence, and (B) of traveling (including lodging) from the former residence to the new place of residence. Such term shall not include any expenses for meals. (2) Individuals other than taxpayer In the case of any individual other than the taxpayer, expenses referred to in paragraph (1) shall be taken into account only if such individual has both the former residence and the new residence as his principal place of abode and is a member of the taxpayer’s household.

“qualified retiree moving expenses” applies in that section

the term “qualified retiree moving expenses” means any moving expenses— (A) which are incurred by an individual whose former principal place of work and former residence were outside the United States, and (B) which are incurred for a move to a new residence in the United States in connection with the bona fide retirement of the individual. (3) Qualified survivor moving expenses For purposes of paragraph (1),

“qualified survivor moving expenses” applies in that section

the term “qualified survivor moving expenses” means moving expenses— (A) which are paid or incurred by the spouse or any dependent of any decedent who (as of the time of his death) had a principal place of work outside the United States, and (B) which are incurred for a move which begins within 6 months after the death of such decedent and which is to a residence in the United States from a former residence outside the United States which (as of the time of the decedent’s death) was the residence of such decedent and the individual paying or incurring the expense. (j) Regulations The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section.

“self-employed individual” applies in that section

the term “self-employed individual” means an individual who performs personal services— (1) as the owner of the entire interest in an unincorporated trade or business, or (2) as a partner in a partnership carrying on a trade or business.

“United States” applies in that section

the term “United States” includes the possessions of the United States. (i) Allowance of deductions in case of retirees or decedents who were working abroad (1) In general In the case of any qualified retiree moving expenses or qualified survivor moving expenses— (A) this section (other than subsection (h)) shall be applied with respect to such expenses as if they were incurred in connection with the commencement of work by the taxpayer as an employee at a new principal place of work located within the United States, and (B) the limitations of subsection (c)(2) shall not apply. (2) Qualified retiree moving expenses For purposes of paragraph (1),

“active participant” applies in that section

the term “active participant” means, with respect to any plan year, an individual— (A) who is an active participant in— (i) a plan described in section 401(a) which includes a trust exempt from tax under section 501(a), (ii) an annuity plan described in section 403(a), (iii) a plan established for its employees by the United States, by a State or political subdivision thereof, or by an agency or instrumentality of any of the foregoing, (iv) an annuity contract described in section 403(b), (v) a simplified employee pension (within the meaning of section 408(k)), or (vi) any simple retirement account (within the meaning of section 408(p)), or (B) who makes deductible contributions to a trust …

“applicable dollar amount” applies in that section

The term “applicable dollar amount” means the following: (i) In the case of a taxpayer filing a joint return, $80,000. (ii) In the case of any other taxpayer (other than a married individual filing a separate return), $50,000. (iii) In the case of a married individual filing a separate return, zero. (4) Special rule for married individuals filing separately and living apart A husband and wife who— (A) file separate returns for any taxable year, and (B) live apart at all times during such taxable year, shall not be treated as married individuals for purposes of this subsection. (5) Active participant For purposes of this subsection,

“compensation” applies in that section

the term “compensation” includes earned income (as defined in section 401(c)(2)). The term “compensation” does not include any amount received as a pension or annuity and does not include any amount received as deferred compensation. For purposes of this paragraph, section 401(c)(2) shall be applied as if the term trade or business for purposes of section 1402 included service described in subsection (c)(6).

“qualified retirement contribution” applies in that section

the term “qualified retirement contribution” means— (1) any amount paid in cash for the taxable year by or on behalf of an individual to an individual retirement plan for such individual’s benefit, and (2) any amount contributed on behalf of any individual to a plan described in section 501(c)(18). (f) Other definitions and special rules (1) Compensation For purposes of this section,

“account holder” applies in that section

The term “account holder” means the individual on whose behalf the Archer MSA was established. (4) Certain rules to apply Rules similar to the following rules shall apply for purposes of this section: (A) Section 219(d)(2) (relating to no deduction for rollovers). (B) Section 219(f)(3) (relating to time when contributions deemed made). (C) Except as provided in section 106(b), section 219(f)(5) (relating to employer payments). (D) Section 408(g) (relating to community property laws). (E) Section 408(h) (relating to custodial accounts). (e) Tax treatment of accounts (1) In general An Archer MSA is exempt from taxation under this subtitle unless such account has ceased to be an Archer MSA.

“active MSA participant” applies in that section

The term “active MSA participant” means, with respect to any taxable year, any individual who is the account holder of any Archer MSA into which any contribution was made which was excludable from gross income under section 106(b), or allowable as a deduction under this section, for such taxable year.

“Archer MSA” applies in that section

The term “Archer MSA” means a trust created or organized in the United States as a medical savings account exclusively for the purpose of paying the qualified medical expenses of the account holder, but only if the written governing instrument creating the trust meets the following requirements: (A) Except in the case of a rollover contribution described in subsection (f)(5), no contribution will be accepted— (i) unless it is in cash, or (ii) to the extent such contribution, when added to previous contributions to the trust for the calendar year, exceeds 75 percent of the highest annual limit deductible permitted under subsection (c)(2)(A)(ii) for such calendar year.

“cut-off year” applies in that section

the term “cut-off year” means the earlier of— (A) calendar year 2007, or (B) the first calendar year before 2007 for which the Secretary determines under subsection (j) that the numerical limitation for such year has been exceeded. (3) Active MSA participant For purposes of this subsection— (A) In general

“eligible individual” applies in that section

The term “eligible individual” means, with respect to any month, any individual if— (i) such individual is covered under a high deductible health plan as of the 1st day of such month, (ii) such individual is not, while covered under a high deductible health plan, covered under any health plan— (I) which is not a high deductible health plan, and (II) which provides coverage for any benefit which is covered under the high deductible health plan, and (iii) (I) the high deductible health plan covering such individual is established and maintained by the employer of such individual or of the spouse of such individual and such employer is a small employer, or (II) such individual is an employee …

“excess contribution” applies in that section

the term “excess contribution” means any contribution (other than a rollover contribution) which is neither excludable from gross income under section 106(b) nor deductible under this section. (4) Additional tax on distributions not used for qualified medical expenses (A) In general The tax imposed by this chapter on the account holder for any taxable year in which there is a payment or distribution from an Archer MSA of such holder which is includible in gross income under paragraph (2) shall be increased by 20 percent of the amount which is so includible.

“family coverage” applies in that section

The term “family coverage” means any coverage other than self-only coverage. (d) Archer MSA For purposes of this section— (1) Archer MSA

“high deductible health plan” applies in that section

The term “high deductible health plan” means a health plan— (i) in the case of self-only coverage, which has an annual deductible which is not less than $1,500 and not more than $2,250, (ii) in the case of family coverage, which has an annual deductible which is not less than $3,000 and not more than $4,500, and (iii) the annual out-of-pocket expenses required to be paid under the plan (other than for premiums) for covered benefits does not exceed— (I) $3,000 for self-only coverage, and (II) $5,500 for family coverage. (B) Special rules (i) Exclusion of certain plans Such term does not include a health plan if substantially all of its coverage is coverage described in paragraph (1)(B).

“MSA return” applies in that section

the term “MSA return” means any return on which any exclusion is claimed under section 106(b) or any deduction is claimed under this section. (B) Alternative computation of limitation The numerical limitation for 1998, 1999, 2001, 2002, 2004, 2005, or 2006 is also exceeded if the sum of— (i) 90 percent of the sum determined under subparagraph (A) for such calendar year, plus (ii) the product of 2.5 and the number of Archer MSAs established during the portion of such year preceding July 1 (based on the reports required under paragraph (4)) for taxable years beginning in such year, exceeds 750,000. (C) No limitation for 2000 or 2003 The numerical limitation shall not apply for 2000 or 2003.

“MSA-participating employer” applies in that section

the term “MSA-participating employer” means any small employer if— (A) such employer made any contribution to the Archer MSA of any employee during the cut-off year or any preceding calendar year which was excludable from gross income under section 106(b), or (B) at least 20 percent of the employees of such employer who are eligible individuals for any month of the cut-off year by reason of coverage under a high deductible health plan of such employer each made a contribution of at least $100 to their Archer MSAs for any taxable year ending with or within the cut-off year which was allowable as a deduction under this section.

“permitted insurance” applies in that section

The term “permitted insurance” means— (A) insurance if substantially all of the coverage provided under such insurance relates to— (i) liabilities incurred under workers’ compensation laws, (ii) tort liabilities, (iii) liabilities relating to ownership or use of property, or (iv) such other similar liabilities as the Secretary may specify by regulations, (B) insurance for a specified disease or illness, and (C) insurance paying a fixed amount per day (or other period) of hospitalization. (4) Small employer (A) In general

“previously uninsured individual” applies in that section

the term “previously uninsured individual” means, with respect to any Archer MSA, any individual who had no health plan coverage (other than coverage referred to in subsection (c)(1)(B)) at any time during the 6-month period before the date such individual’s coverage under the high deductible health plan commences.

“qualified medical expenses” applies in that section

The term “qualified medical expenses” means, with respect to an account holder, amounts paid by such holder for medical care (as defined in section 213(d)) for such individual, the spouse of such individual, and any dependent (as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof) of such individual, but only to the extent such amounts are not compensated for by insurance or otherwise. For purposes of this subparagraph, amounts paid for menstrual care products (as defined in section 223(d)(2)(D)) shall be treated as paid for medical care.

“small employer” applies in that section

The term “small employer” means, with respect to any calendar year, any employer if such employer employed an average of 50 or fewer employees on business days during either of the 2 preceding calendar years. For purposes of the preceding sentence, a preceding calendar year may be taken into account only if the employer was in existence throughout such year.

“dependent” applies in that section

The term “dependent” has the meaning given such term by section 152 (determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof). (e) Special rules (1) Denial of double benefit No deduction shall be allowed under this section for any amount for which a deduction is allowable under any other provision of this chapter, or for which an exclusion is allowable under section 127 to the taxpayer by reason of the payment by the taxpayer’s employer of any indebtedness on a qualified education loan of the taxpayer.

“eligible educational institution” applies in that section

the term “eligible educational institution” has the same meaning given such term by section 25A(f)(2), except that such term shall also include an institution conducting an internship or residency program leading to a degree or certificate awarded by an institution of higher education, a hospital, or a health care facility which offers postgraduate training. (3) Eligible student

“eligible student” applies in that section

The term “eligible student” has the meaning given such term by section 25A(b)(3). (4) Dependent

“modified adjusted gross income” applies in that section

The term “modified adjusted gross income” means adjusted gross income determined— (i) without regard to this section and sections 85(c) 1 911, 931, and 933, and (ii) after application of sections 86, 135, 137, 219, and 469. (c) Dependents not eligible for deduction No deduction shall be allowed by this section to an individual for the taxable year if a deduction under section 151 with respect to such individual is allowed to another taxpayer for the taxable year beginning in the calendar year in which such individual’s taxable year begins. (d) Definitions For purposes of this section— (1) Qualified education loan

“qualified education loan” applies in that section

The term “qualified education loan” means any indebtedness incurred by the taxpayer solely to pay qualified higher education expenses— (A) which are incurred on behalf of the taxpayer, the taxpayer’s spouse, or any dependent of the taxpayer as of the time the indebtedness was incurred, (B) which are paid or incurred within a reasonable period of time before or after the indebtedness is incurred, and (C) which are attributable to education furnished during a period during which the recipient was an eligible student. Such term includes indebtedness used to refinance indebtedness which qualifies as a qualified education loan.

“qualified higher education expenses” applies in that section

The term “qualified higher education expenses” means the cost of attendance (as defined in section 472 of the Higher Education Act of 1965, 20 U.S.C. 1087 ll , as in effect on the day before the date of the enactment of the Taxpayer Relief Act of 1997) at an eligible educational institution, reduced by the sum of— (A) the amount excluded from gross income under section 127, 135, 529, or 530 by reason of such expenses, and (B) the amount of any scholarship, allowance, or payment described in section 25A(g)(2). For purposes of the preceding sentence,

“account beneficiary” applies in that section

The term “account beneficiary” means the individual on whose behalf the health savings account was established. (4) Certain rules to apply Rules similar to the following rules shall apply for purposes of this section: (A) Section 219(d)(2) (relating to no deduction for rollovers). (B) Section 219(f)(3) (relating to time when contributions deemed made). (C) Except as provided in section 106(d), section 219(f)(5) (relating to employer payments). (D) Section 408(g) (relating to community property laws). (E) Section 408(h) (relating to custodial accounts).

“Archer MSA” applies in that section

The term “Archer MSA” has the meaning given such term in section 220(d). (d) Health savings account For purposes of this section— (1) In general

“direct primary care service arrangement” applies in that section

The term “direct primary care service arrangement” means, with respect to any individual, an arrangement under which such individual is provided medical care (as defined in section 213(d)) consisting solely of primary care services provided by primary care practitioners (as defined in section 1833(x)(2)(A) of the Social Security Act, determined without regard to clause (ii) thereof), if the sole compensation for such care is a fixed periodic fee.

“eligible individual” applies in that section

The term “eligible individual” means, with respect to any month, any individual if— (i) such individual is covered under a high deductible health plan as of the 1st day of such month, and (ii) such individual is not, while covered under a high deductible health plan, covered under any health plan— (I) which is not a high deductible health plan, and (II) which provides coverage for any benefit which is covered under the high deductible health plan.

“excess contribution” applies in that section

the term “excess contribution” means any contribution (other than a rollover contribution described in paragraph (5) or section 220(f)(5)) which is neither excludable from gross income under section 106(d) nor deductible under this section. (4) Additional tax on distributions not used for qualified medical expenses (A) In general The tax imposed by this chapter on the account beneficiary for any taxable year in which there is a payment or distribution from a health savings account of such beneficiary which is includible in gross income under paragraph (2) shall be increased by 20 percent of the amount which is so includible.

“family coverage” applies in that section

The term “family coverage” means any coverage other than self-only coverage. (5) Archer MSA

“health savings account” applies in that section

The term “health savings account” means a trust created or organized in the United States as a health savings account exclusively for the purpose of paying the qualified medical expenses of the account beneficiary, but only if the written governing instrument creating the trust meets the following requirements: (A) Except in the case of a rollover contribution described in subsection (f)(5) or section 220(f)(5), no contribution will be accepted— (i) unless it is in cash, or (ii) to the extent such contribution, when added to previous contributions to the trust for the calendar year, exceeds the sum of— (I) the dollar amount in effect under subsection (b)(2)(B), and (II) the dollar amount in …

“high deductible health plan” applies in that section

The term “high deductible health plan” means a health plan— (i) which has an annual deductible which is not less than— (I) $1,000 for self-only coverage, and (II) twice the dollar amount in subclause (I) for family coverage, and (ii) the sum of the annual deductible and the other annual out-of-pocket expenses required to be paid under the plan (other than for premiums) for covered benefits does not exceed— (I) $5,000 for self-only coverage, and (II) twice the dollar amount in subclause (I) for family coverage. (B) Exclusion of certain plans Such term does not include a health plan if substantially all of its coverage is coverage described in paragraph (1)(B).

“insulin” applies in that section

The term “insulin” means insulin that is licensed under subsection (a) or (k) of section 351 of the Public Health Service Act ( 42 U.S.C. 262 ) and continues to be marketed under such section, including any insulin product that has been deemed to be licensed under section 351(a) of such Act pursuant to section 7002(e)(4) of the Biologics Price Competition and Innovation Act of 2009 ( Public Law 111–148 ) and continues to be marketed pursuant to such licensure. (H) Bronze and catastrophic plans treated as high deductible health plans

“menstrual care product” applies in that section

the term “menstrual care product” means a tampon, pad, liner, cup, sponge, or similar product used by individuals with respect to menstruation or other genital-tract secretions. (3) Account beneficiary

“permitted insurance” applies in that section

The term “permitted insurance” means— (A) insurance if substantially all of the coverage provided under such insurance relates to— (i) liabilities incurred under workers’ compensation laws, (ii) tort liabilities, (iii) liabilities relating to ownership or use of property, or (iv) such other similar liabilities as the Secretary may specify by regulations, (B) insurance for a specified disease or illness, and (C) insurance paying a fixed amount per day (or other period) of hospitalization. (4) Family coverage

“qualified medical expenses” applies in that section

The term “qualified medical expenses” means, with respect to an account beneficiary, amounts paid by such beneficiary for medical care (as defined in section 213(d)) for such individual, the spouse of such individual, and any dependent (as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof) of such individual, but only to the extent such amounts are not compensated for by insurance or otherwise. For purposes of this subparagraph, amounts paid for menstrual care products shall be treated as paid for medical care. (B) Health insurance may not be purchased from account Subparagraph (A) shall not apply to any payment for insurance.

“selected insulin products” applies in that section

The term “selected insulin products” means any dosage form (such as vial, pump, or inhaler dosage forms) of any different type (such as rapid-acting, short-acting, intermediate-acting, long-acting, ultra long-acting, and premixed) of insulin. (II) Insulin

“testing period” applies in that section

The term “testing period” means the period beginning with the last month of the taxable year referred to in subparagraph (A) and ending on the last day of the 12th month following such month. (c) Definitions and special rules For purposes of this section— (1) Eligible individual (A) In general

“cash tips” applies in that section

the term “cash tips” includes tips received from customers that are paid in cash or charged and, in the case of an employee, tips received under any tip-sharing arrangement. (e) Social security number required (1) In general No deduction shall be allowed under this section unless the taxpayer includes on the return of tax for the taxable year such individual’s social security number. (2) Social security number defined For purposes of paragraph (1), the term “social security number” shall have the meaning given such term in section 24(h)(7).

“modified adjusted gross income” applies in that section

the term “modified adjusted gross income” means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section 911, 931, or 933. (c) Tips received in course of trade or business In the case of qualified tips received by an individual during any taxable year in the course of a trade or business (other than the trade or business of performing services as an employee) of such individual, such qualified tips shall be taken into account under subsection (a) only to the extent that the gross income for the taxpayer from such trade or business for such taxable year (including such qualified tips) exceeds the sum of the deductions …

“qualified tips” applies in that section

The term “qualified tips” means cash tips received by an individual in an occupation which customarily and regularly received tips on or before December 31, 2024 , as provided by the Secretary. (2) Exclusions Such term shall not include any amount received by an individual unless— (A) such amount is paid voluntarily without any consequence in the event of nonpayment, is not the subject of negotiation, and is determined by the payor, (B) the trade or business in the course of which the individual receives such amount is not a specified service trade or business (as defined in section 199A(d)(2)), and (C) such other requirements as may be established by the Secretary in regulations or other …

“modified adjusted gross income” applies in that section

the term “modified adjusted gross income” means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section 911, 931, or 933. (c) Qualified overtime compensation (1) In general For purposes of this section,

“qualified overtime compensation” applies in that section

the term “qualified overtime compensation” means overtime compensation paid to an individual required under section 7 of the Fair Labor Standards Act of 1938 that is in excess of the regular rate (as used in such section) at which such individual is employed. (2) Exclusions Such term shall not include any qualified tip (as defined in section 224(d)). (d) Social security number required (1) In general No deduction shall be allowed under this section unless the taxpayer includes on the return of tax for the taxable year such individual’s social security number.

“20-percent owned corporation” applies in that 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.

“affiliated group” applies in that section

The term “affiliated group” has the meaning given such term by section 1504(a), except that for such purposes sections 1504(b)(2) 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.

“qualifying dividend” applies in that 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 such dividend is distributed out of the earnings and profits of a taxable year of the distributing corporation which ends after December 31, 1963 , and on each day of which the distributing corporation and the corporation receiving the dividend were members of such affiliated group. (2) Affiliated group For purposes of this subsection: (A) In general

“effectively connected income” applies in that section

The term “effectively connected income” means any income which is effectively connected (or treated as effectively connected) with the conduct of a trade or business in the United States and is subject to tax under this chapter. Such term shall not include any foreign trade income. (C) FSC

“FSC” applies in that section

The term “FSC” has the meaning given such term by section 922. (5) References to prior law Any reference in this subsection to section 922, 923, or 927 shall be treated as a reference to such section as in effect before its repeal by the FSC Repeal and Extraterritorial Income Exclusion Act of 2000.

“post-1986 undistributed earnings” applies in that section

The term “post-1986 undistributed earnings” means the amount of the earnings and profits of the foreign corporation (computed in accordance with sections 964(a) and 986) accumulated in taxable years beginning after December 31, 1986 — (A) as of the close of the taxable year of the foreign corporation in which the dividend is distributed, and (B) without diminution by reason of dividends distributed during such taxable year. (5) Post-1986 undistributed U.S. earnings For purposes of this subsection,

“post-1986 undistributed U.S. earnings” applies in that section

the term “post-1986 undistributed U.S. earnings” means the portion of the post-1986 undistributed earnings which is attributable to— (A) income of the qualified 10-percent owned foreign corporation which is effectively connected with the conduct of a trade or business within the United States and subject to tax under this chapter, or (B) any dividend received (directly or through a wholly owned foreign corporation) from a domestic corporation at least 80 percent of the stock of which (by vote and value) is owned (directly or through such wholly owned foreign corporation) by the qualified 10-percent owned foreign corporation.

“qualified 10-percent owned foreign corporation” applies in that section

the term “qualified 10-percent owned foreign corporation” means any foreign corporation (other than a passive foreign investment company) if at least 10 percent of the stock of such corporation (by vote and value) is owned by the taxpayer. (3) U.S.-source portion For purposes of this subsection, the U.S.-source portion of any dividend is an amount which bears the same ratio to such dividend as— (A) the post-1986 undistributed U.S. earnings, bears to (B) the total post-1986 undistributed earnings. (4) Post-1986 undistributed earnings

“hybrid dividend” applies in that section

The term “hybrid dividend” means an amount received from a controlled foreign corporation— (A) for which a deduction would be allowed under subsection (a) but for this subsection, and (B) for which the controlled foreign corporation received a deduction (or other tax benefit) with respect to any income, war profits, or excess profits taxes imposed by any foreign country or possession of the United States. (f) Special rule for purging distributions of passive foreign investment companies Any amount which is treated as a dividend under section 1291(d)(2)(B) shall not be treated as a dividend for purposes of this section.

“specified 10-percent owned foreign corporation” applies in that section

The term “specified 10-percent owned foreign corporation” means any foreign corporation with respect to which any domestic corporation is a United States shareholder with respect to such corporation. (2) Exclusion of passive foreign investment companies Such term shall not include any corporation which is a passive foreign investment company (as defined in section 1297) with respect to the shareholder and which is not a controlled foreign corporation.

“undistributed earnings” applies in that section

The term “undistributed earnings” means the amount of the earnings and profits of the specified 10-percent owned foreign corporation (computed in accordance with sections 964(a) and 986)— (A) as of the close of the taxable year of the specified 10-percent owned foreign corporation in which the dividend is distributed, and (B) without diminution by reason of dividends distributed during such taxable year. (3) Undistributed foreign earnings

“undistributed foreign earnings” applies in that section

The term “undistributed foreign earnings” means the portion of the undistributed earnings which is attributable to neither— (A) income described in subparagraph (A) of section 245(a)(5), nor (B) dividends described in subparagraph (B) of such section (determined without regard to section 245(a)(12)). (d) Disallowance of foreign tax credit, etc. (1) In general No credit shall be allowed under section 901 for any taxes paid or accrued (or treated as paid or accrued) with respect to any dividend for which a deduction is allowed under this section.

“FHLB” applies in that section

The term “FHLB” means any Federal Home Loan Bank. (ii) FHLMC

“FHLMC” applies in that section

The term “FHLMC” means the Federal Home Loan Mortgage Corporation. (iii) Taxable year of FHLB The taxable year of an FHLB shall, except as provided in regulations prescribed by the Secretary, be treated as the calendar year. (iv) Earnings and profits The earnings and profits of any FHLB for any taxable year shall be treated as equal to the sum of— (I) any dividends received by the FHLB from the FHLMC during such taxable year, and (II) the total earnings and profits (determined without regard to dividends described in subclause (I)) of the FHLB as reported in its annual financial statement prepared in accordance with section 20 of the Federal Home Loan Bank Act ( 12 U.S.C. 1440 ).

“average indebtedness percentage” applies in that section

the term “average indebtedness percentage” means the percentage obtained by dividing— (A) the average amount (determined under regulations prescribed by the Secretary) of the portfolio indebtedness with respect to the stock during the base period, by (B) the average amount (determined under regulations prescribed by the Secretary) of the adjusted basis of the stock during the base period. (2) Special rule where stock not held throughout base period In the case of any stock which was not held by the taxpayer throughout the base period, paragraph (1) shall be applied as if the base period consisted only of that portion of the base period during which the stock was held by the taxpayer.

“bank” applies in that section

The term “bank” has the meaning given such term by section 581. (ii) Bank holding company

“bank holding company” applies in that section

The term “bank holding company” means a bank holding company (within the meaning of section 2(a) of the Bank Holding Company Act of 1956). (4) Treatment of certain preferred stock For purposes of determining whether the requirements of subparagraph (A) or (B) of paragraph (2) or of subparagraph (A) of paragraph (3) are met, stock described in section 1504(a)(4) shall not be taken into account. (d) Average indebtedness percentage For purposes of this section— (1) In general Except as provided in paragraph (2),

“base period” applies in that section

The term “base period” means, with respect to any dividend, the shorter of— (A) the period beginning on the ex-dividend date for the most recent previous dividend on the stock and ending on the day before the ex-dividend date for the dividend involved, or (B) the 1-year period ending on the day before the ex-dividend date for the dividend involved.

“debt financed portfolio stock” applies in that section

The term “debt financed portfolio stock” means any portfolio stock if at some time during the base period there is portfolio indebtedness with respect to such stock. (2) Portfolio stock

“portfolio indebtedness” applies in that section

The term “portfolio indebtedness” means any indebtedness directly attributable to investment in the portfolio stock. (B) Certain amounts received from short sale treated as indebtedness For purposes of subparagraph (A), any amount received from a short sale shall be treated as indebtedness for the period beginning on the day on which such amount is received and ending on the day the short sale is closed. (4) Base period

“portfolio stock” applies in that section

The term “portfolio stock” means any stock of a corporation unless— (A) as of the beginning of the ex-dividend date, the taxpayer owns stock of such corporation— (i) possessing at least 50 percent of the total voting power of the stock of such corporation, and (ii) having a value equal to at least 50 percent of the total value of the stock of such corporation, or (B) as of the beginning of the ex-dividend date— (i) the taxpayer owns stock of such corporation which would meet the requirements of subparagraph (A) if “20 percent” were substituted for “50 percent” each place it appears in such subparagraph, and (ii) stock meeting the requirements of subparagraph (A) is owned by 5 or fewer …

“organizational expenditures” applies in that section

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 but only if made not later than the time prescribed by law for filing the return for such taxable year (including extensions thereof).

“deduction eligible income” applies in that section

The term “deduction eligible income” means, with respect to any domestic corporation, the excess (if any) of— (i) gross income of such corporation determined without regard to— (I) any amount included in the gross income of such corporation under section 951(a)(1), (II) the net CFC tested income included in the gross income of such corporation under section 951A, (III) any financial services income (as defined in section 904(d)(2)(D)) of such corporation, (IV) any dividend received from a corporation which is a controlled foreign corporation of such domestic corporation, (V) any domestic oil and gas extraction income of such corporation, (VI) any foreign branch income (as defined in section …

“domestic oil and gas extraction income” applies in that section

the term “domestic oil and gas extraction income” means income described in section 907(c)(1), determined by substituting “within the United States” for “without the United States”. (c) Regulations The Secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out the provisions of this section.

“foreign use” applies in that section

The term “foreign use” means any use, consumption, or disposition which is not within the United States. (B) Property or services provided to domestic intermediaries (i) Property If a taxpayer sells property to another person (other than a related party) for further manufacture or other modification within the United States, such property shall not be treated as sold for a foreign use even if such other person subsequently uses such property for a foreign use.

“foreign-derived deduction eligible income” applies in that section

The term “foreign-derived deduction eligible income” means, with respect to any taxpayer for any taxable year, any deduction eligible income of such taxpayer which is derived in connection with— (A) property— (i) which is sold by the taxpayer to any person who is not a United States person, and (ii) which the taxpayer establishes to the satisfaction of the Secretary is for a foreign use, or (B) services provided by the taxpayer which the taxpayer establishes to the satisfaction of the Secretary are provided to any person, or with respect to property, not located within the United States. (2) Rules relating to foreign use property or services For purposes of this subsection— (A) Foreign use

“related party” applies in that section

the term “related party” means any member of an affiliated group as defined in section 1504(a), determined— (i) by substituting “more than 50 percent” for “at least 80 percent” each place it appears, and (ii) without regard to paragraphs (2) and (3) of section 1504(b). Any person (other than a corporation) shall be treated as a member of such group if such person is controlled by members of such group (including any entity treated as a member of such group by reason of this sentence) or controls any such member. For purposes of the preceding sentence, control shall be determined under the rules of section 954(d)(3).

“sale” applies in that section

the terms “sold”, “sells”, and “sale” shall include any lease, license, exchange, or other disposition. (3) Deduction eligible income (A) In general

“sells” applies in that section

the terms “sold”, “sells”, and “sale” shall include any lease, license, exchange, or other disposition. (3) Deduction eligible income (A) In general

“sold” applies in that section

the terms “sold”, “sells”, and “sale” shall include any lease, license, exchange, or other disposition. (3) Deduction eligible income (A) In general

“extraordinary dividend” applies in that section

the term “extraordinary dividend” has the meaning given to such term by section 1059(c); except that such section shall be applied by treating the amount realized by the taxpayer in the short sale as his adjusted basis in the stock.

“interest” applies in that section

the term “interest” includes any amount paid or incurred in connection with personal property used in a short sale. (3) Exception for hedging transactions This subsection shall not apply in the case of any hedging transaction (as defined in section 1256(e)). (4) Application with other provisions (A) Subsection (c) In the case of any short sale, this subsection shall be applied after subsection (h). (B) Section 1277 or 1282 In the case of any obligation to which section 1277 or 1282 applies, this subsection shall be applied after section 1277 or 1282.

“interest and carrying charges” applies in that section

the term “interest and carrying charges” means the excess of— (A) the sum of— (i) interest on indebtedness incurred or continued to purchase or carry the personal property, and (ii) all other amounts (including charges to insure, store, or transport the personal property) paid or incurred to carry the personal property, over (B) the sum of— (i) the amount of interest (including original issue discount) includible in gross income for the taxable year with respect to the property described in subparagraph (A), (ii) any amount treated as ordinary income under section 1271(a)(3)(A), 1276, or 1281(a) with respect to such property for the taxable year, (iii) the excess of any dividends includible …

“artist” applies in that section

The term “artist” means any individual if the personal efforts of such individual create (or may reasonably be expected to create) a picture, painting, sculpture, statue, etching, drawing, cartoon, graphic design, or original print edition. (ii) Criteria In determining whether any expense is paid or incurred in the trade or business of being an artist, the following criteria shall be taken into account: (I) The originality and uniqueness of the item created (or to be created). (II) The predominance of aesthetic value over utilitarian value of the item created (or to be created).

“family” applies in that section

the term “family” means the taxpayer, the spouse of the taxpayer, and any of their children who have not attained age 18 before the close of the taxable year. (3) Preproductive period (A) In general For purposes of this section,

“farming business” applies in that section

The term “farming business” means the trade or business of farming. (B) Certain trades and businesses included