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U.S. CODE
TITLE 26
INTERNAL REVENUE CODE

Version 2010-02-01

Last update 2011-11-19


  • Income Taxes
    • NORMAL TAXES AND SURTAXES
      • Determination of Tax Liability
        • TAX ON INDIVIDUALS
        • TAX ON CORPORATIONS
        • CHANGES IN RATES DURING A TAXABLE YEAR
        • CREDITS AGAINST TAX
          • Nonrefundable Personal Credits
          • Other Credits
          • Refundable Credits
          • Business Related Credits
          • Rules for Computing Investment Credit
          • Rules for Computing Work Opportunity Credit
          • Credit Against Regular Tax for Prior Year Minimum Tax Liability
          • Nonrefundable Credit to Holders of Clean Renewable Energy Bonds
          • Qualified Tax Credit Bonds
          • Build America Bonds
        • ALTERNATIVE MINIMUM TAX
        • ENVIRONMENTAL TAX
        • REPEALED
      • Computation of Taxable Income
        • DEFINITION OF GROSS INCOME, ADJUSTED GROSS INCOME, TAXABLE INCOME, ETC.
        • ITEMS SPECIFICALLY INCLUDED IN GROSS INCOME
        • ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME
        • TAX EXEMPTION REQUIREMENTS FOR STATE AND LOCAL BONDS
          • Private Activity Bonds
          • Requirements Applicable to All State and Local Bonds
          • Definitions and Special Rules
        • DEDUCTIONS FOR PERSONAL EXEMPTIONS
        • ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS
        • ADDITIONAL ITEMIZED DEDUCTIONS FOR INDIVIDUALS
        • SPECIAL DEDUCTIONS FOR CORPORATIONS
        • ITEMS NOT DEDUCTIBLE
        • TERMINAL RAILROAD CORPORATIONS AND THEIR SHAREHOLDERS
        • SPECIAL RULES RELATING TO CORPORATE PREFERENCE ITEMS
      • Corporate Distributions and Adjustments
        • DISTRIBUTIONS BY CORPORATIONS
          • Effects on Recipients
          • Effects on Corporation
          • Definitions; Constructive Ownership of Stock
        • CORPORATE LIQUIDATIONS
          • Effects on Recipients
          • Effects on Corporation
          • Repealed
          • Definition and Special Rule
        • CORPORATE ORGANIZATIONS AND REORGANIZATIONS
          • Corporate Organizations
          • Effects on Shareholders and Security Holders
          • Effects on Corporation
          • Special Rule; Definitions
        • REPEALED
        • CARRYOVERS
        • TREATMENT OF CERTAIN CORPORATE INTERESTS AS STOCK OR INDEBTEDNESS
        • REPEALED
      • Deferred Compensation, Etc.
        • PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC.
          • General Rule
          • Special Rules
          • Special Rules for Multiemployer Plans
          • Treatment of Welfare Benefit Funds
          • Treatment of Transfers to Retiree Health Accounts
        • CERTAIN STOCK OPTIONS
        • RULES RELATING TO MINIMUM FUNDING STANDARDS AND BENEFIT LIMITATIONS
          • Minimum Funding Standards for Pension Plans
          • Benefit Limitations Under Single-Employer Plans
      • Accounting Periods and Methods of Accounting
        • ACCOUNTING PERIODS
        • METHODS OF ACCOUNTING
          • Methods of Accounting in General
          • Taxable Year for Which Items of Gross Income Included
          • Taxable Year for Which Deductions Taken
          • Inventories
        • ADJUSTMENTS
      • Exempt Organizations
        • GENERAL RULE
        • PRIVATE FOUNDATIONS
        • TAXATION OF BUSINESS INCOME OF CERTAIN EXEMPT ORGANIZATIONS
        • FARMERS COOPERATIVES
        • SHIPOWNERS PROTECTION AND INDEMNITY ASSOCIATIONS
        • POLITICAL ORGANIZATIONS
        • CERTAIN HOMEOWNERS ASSOCIATIONS
        • HIGHER EDUCATION SAVINGS ENTITIES
      • Corporations Used to Avoid Income Tax on Shareholders
        • CORPORATIONS IMPROPERLY ACCUMULATING SURPLUS
        • PERSONAL HOLDING COMPANIES
        • REPEALED
        • DEDUCTION FOR DIVIDENDS PAID
      • Banking Institutions
        • RULES OF GENERAL APPLICATION TO BANKING INSTITUTIONS
        • MUTUAL SAVINGS BANKS, ETC.
      • Natural Resources
        • DEDUCTIONS
        • REPEALED
        • SALES AND EXCHANGES
        • MINERAL PRODUCTION PAYMENTS
        • CONTINENTAL SHELF AREAS
      • Estates, Trusts, Beneficiaries, and Decedents
        • ESTATES, TRUSTS, AND BENEFICIARIES
          • General Rules for Taxation of Estates and Trusts
          • Trusts Which Distribute Current Income Only
          • Estates and Trusts Which May Accumulate Income or Which Distribute Corpus
          • Treatment of Excess Distributions by Trusts
          • Grantors and Others Treated as Substantial Owners
          • Miscellaneous
        • INCOME IN RESPECT OF DECEDENTS
      • Partners and Partnerships
        • DETERMINATION OF TAX LIABILITY
        • CONTRIBUTIONS, DISTRIBUTIONS, AND TRANSFERS
          • Contributions to a Partnership
          • Distributions by a Partnership
          • Transfers of Interests in a Partnership
          • Provisions Common to Other Subparts
        • DEFINITIONS
        • SPECIAL RULES FOR ELECTING LARGE PARTNERSHIPS
      • Insurance Companies
        • LIFE INSURANCE COMPANIES
          • Tax Imposed
          • Life Insurance Gross Income
          • Life Insurance Deductions
          • Accounting, Allocation, and Foreign Provisions
          • Definitions and Special Rules
        • OTHER INSURANCE COMPANIES
        • PROVISIONS OF GENERAL APPLICATION
      • Regulated Investment Companies and Real Estate Investment Trusts
        • REGULATED INVESTMENT COMPANIES
        • REAL ESTATE INVESTMENT TRUSTS
        • PROVISIONS WHICH APPLY TO BOTH REGULATED INVESTMENT COMPANIES AND REAL ESTATE INVESTMENT TRUSTS
        • REAL ESTATE MORTGAGE INVESTMENT CONDUITS
        • REPEALED
      • Tax Based on Income From Sources Within or Without the United States
        • SOURCE RULES AND OTHER GENERAL RULES RELATING TO FOREIGN INCOME
        • NONRESIDENT ALIENS AND FOREIGN CORPORATIONS
          • Nonresident Alien Individuals
          • Foreign Corporations
          • Tax on Gross Transportation Income
          • Miscellaneous Provisions
        • INCOME FROM SOURCES WITHOUT THE UNITED STATES
          • Foreign Tax Credit
          • Earned Income of Citizens or Residents of United States
          • Repealed
          • Possessions of the United States
          • Repealed
          • Controlled Foreign Corporations
          • Export Trade Corporations
          • Repealed
          • Admissibility of Documentation Maintained in Foreign Countries
          • Foreign Currency Transactions
        • DOMESTIC INTERNATIONAL SALES CORPORATIONS
          • Treatment of Qualifying Corporations
          • Treatment of Distributions to Shareholders
        • INTERNATIONAL BOYCOTT DETERMINATIONS
      • Gain or Loss on Disposition of Property
        • DETERMINATION OF AMOUNT OF AND RECOGNITION OF GAIN OR LOSS
        • BASIS RULES OF GENERAL APPLICATION
        • COMMON NONTAXABLE EXCHANGES
        • SPECIAL RULES
        • REPEALED
        • REPEALED
        • WASH SALES; STRADDLES
        • REPEALED
        • REPEALED
      • Capital Gains and Losses
        • TREATMENT OF CAPITAL GAINS
        • TREATMENT OF CAPITAL LOSSES
        • GENERAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES
        • SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES
        • SPECIAL RULES FOR BONDS AND OTHER DEBT INSTRUMENTS
          • Original Issue Discount
          • Market Discount on Bonds
          • Discount on Short-Term Obligations
          • Miscellaneous Provisions
        • TREATMENT OF CERTAIN PASSIVE FOREIGN INVESTMENT COMPANIES
          • Interest on Tax Deferral
          • Treatment of Qualified Electing Funds
          • Election of Mark to Market for Marketable Stock
          • General Provisions
      • Readjustment of Tax Between Years and Special Limitations
        • INCOME AVERAGING
        • MITIGATION OF EFFECT OF LIMITATIONS AND OTHER PROVISIONS
        • REPEALED
        • REPEALED
        • CLAIM OF RIGHT
        • REPEALED
        • RECOVERIES OF FOREIGN EXPROPRIATION LOSSES
      • Election To Determine Corporate Tax on Certain International Shipping Activities Using Per Ton Rate
      • Tax Treatment of S Corporations and Their Shareholders
        • IN GENERAL
        • TAX TREATMENT OF SHAREHOLDERS
        • SPECIAL RULES
        • DEFINITIONS; MISCELLANEOUS
      • Cooperatives and Their Patrons
        • TAX TREATMENT OF COOPERATIVES
        • TAX TREATMENT BY PATRONS OF PATRONAGE DIVIDENDS AND PER-UNIT RETAIN ALLOCATIONS
        • DEFINITIONS; SPECIAL RULES
      • Designation and Treatment of Empowerment Zones, Enterprise Communities, and Rural Development Investment Areas
        • DESIGNATION
        • TAX-EXEMPT FACILITY BONDS FOR EMPOWERMENT ZONES AND ENTERPRISE COMMUNITIES
        • ADDITIONAL INCENTIVES FOR EMPOWERMENT ZONES
          • Empowerment Zone Employment Credit
          • Additional Expensing
          • Nonrecognition of Gain on Rollover of Empowerment Zone Investments
          • General Provisions
        • INCENTIVES FOR EDUCATION ZONES
        • REGULATIONS
      • Title 11 Cases
      • District of Columbia Enterprise Zone
      • Renewal Communities
        • DESIGNATION
        • RENEWAL COMMUNITY CAPITAL GAIN; RENEWAL COMMUNITY BUSINESS
        • ADDITIONAL INCENTIVES
      • Short-Term Regional Benefits
        • TAX BENEFITS FOR NEW YORK LIBERTY ZONE
        • TAX BENEFITS FOR GO ZONES
        • RECOVERY ZONE BONDS
    • TAX ON SELF-EMPLOYMENT INCOME
    • UNEARNED INCOME MEDICARE CONTRIBUTION
    • WITHHOLDING OF TAX ON NONRESIDENT ALIENS AND FOREIGN CORPORATIONS
      • Nonresident Aliens and Foreign Corporations
      • Application of Withholding Provisions
    • TAXES TO ENFORCE REPORTING ON CERTAIN FOREIGN ACCOUNTS
    • REPEALED
    • CONSOLIDATED RETURNS
      • Returns and Payment of Tax
      • Related Rules
        • IN GENERAL
        • CERTAIN CONTROLLED CORPORATIONS
  • Estate and Gift Taxes
    • ESTATE TAX
      • Estates of Citizens or Residents
        • TAX IMPOSED
        • CREDITS AGAINST TAX
        • GROSS ESTATE
        • TAXABLE ESTATE
      • Estates of Nonresidents Not Citizens
      • Miscellaneous
    • GIFT TAX
      • Determination of Tax Liability
      • Transfers
      • Deductions
    • TAX ON GENERATION-SKIPPING TRANSFERS
      • Tax Imposed
      • Generation-Skipping Transfers
      • Taxable Amount
      • GST Exemption
      • Applicable Rate; Inclusion Ratio
      • Other Definitions and Special Rules
      • Administration
    • SPECIAL VALUATION RULES
    • GIFTS AND BEQUESTS FROM EXPATRIATES
  • Employment Taxes
    • FEDERAL INSURANCE CONTRIBUTIONS ACT
      • Tax on Employees
      • Tax on Employers
      • General Provisions
    • RAILROAD RETIREMENT TAX ACT
      • Tax on Employees
      • Tax on Employee Representatives
      • Tax on Employers
      • General Provisions
      • Tier 2 Tax Rate Determination
    • FEDERAL UNEMPLOYMENT TAX ACT
    • RAILROAD UNEMPLOYMENT REPAYMENT TAX
    • COLLECTION OF INCOME TAX AT SOURCE ON WAGES
    • GENERAL PROVISIONS RELATING TO EMPLOYMENT TAXES
  • Miscellaneous Excise Taxes
    • RETAIL EXCISE TAXES
      • Luxury Passenger Automobiles
      • Special Fuels
      • Heavy Trucks and Trailers
    • MANUFACTURERS EXCISE TAXES
      • Automotive and Related Items
        • GAS GUZZLERS
        • TIRES
        • PETROLEUM PRODUCTS
          • Motor and Aviation Fuels
          • Special Provisions Applicable to Fuels Tax
      • Coal
      • Certain Vaccines
      • Recreational Equipment
        • SPORTING GOODS
        • REPEALED
        • FIREARMS
      • Medical Devices
      • Special Provisions Applicable to Manufacturers Tax
      • Exemptions, Registration, Etc.
    • FACILITIES AND SERVICES
      • Repealed
      • Communications
      • Transportation by Air
        • PERSONS
        • PROPERTY
        • SPECIAL PROVISIONS APPLICABLE TO TAXES ON TRANSPORTATION BY AIR
      • Repealed
      • Special Provisions Applicable to Services and Facilities Taxes
    • TAXES ON CERTAIN INSURANCE POLICIES
      • Policies Issued By Foreign Insurers
      • Insured and Self-Insured Health Plans
    • TAXES ON WAGERING
      • Tax on Wagers
      • Occupational Tax
      • Miscellaneous Provisions
    • CERTAIN OTHER EXCISE TAXES
      • Harbor Maintenance Tax
      • Transportation by Water
      • Repealed
      • Tax on Use of Certain Vehicles
      • Repealed
      • Repealed
    • REPEALED
    • REPEALED
      • Tax on Petroleum
      • Tax on Certain Chemicals
      • Tax on Certain Imported Substances
      • Ozone-Depleting Chemicals, Etc.
    • ENVIRONMENTAL TAXES
      • Tax on Petroleum
      • Tax on Certain Chemicals
      • Tax on Certain Imported Substances
      • Ozone-Depleting Chemicals, Etc.
    • REGISTRATION-REQUIRED OBLIGATIONS
    • GENERAL PROVISIONS RELATING TO OCCUPATIONAL TAXES
    • PUBLIC CHARITIES
    • PRIVATE FOUNDATIONS; AND CERTAIN OTHER TAX-EXEMPT ORGANIZATIONS
      • Private Foundations
      • Black Lung Benefit Trusts
      • Political Expenditures of Section 501 Organizations
      • Failure by Certain Charitable Organizations To Meet Certain Qualification Requirements
      • Abatement of First and Second Tier Taxes in Certain Cases
      • Tax Shelter Transactions
      • Donor Advised Funds
    • QUALIFIED PENSION, ETC., PLANS
    • QUALIFIED INVESTMENT ENTITIES
    • PROVISIONS RELATING TO EXPATRIATED ENTITIES
    • GOLDEN PARACHUTE PAYMENTS
    • CERTAIN GROUP HEALTH PLANS
    • MAINTENANCE OF MINIMUM ESSENTIAL COVERAGE
    • COSMETIC SERVICES
    • FOREIGN PROCUREMENT
  • Alcohol, Tobacco, and Certain Other Excise Taxes
    • DISTILLED SPIRITS, WINES, AND BEER
      • Gallonage and Occupational Taxes
        • GALLONAGE TAXES
          • Distilled Spirits
          • Repealed
          • Wines
          • Beer
          • General Provisions
        • MISCELLANEOUS PROVISIONS
          • Manufacturers of Stills
          • Nonbeverage Domestic Drawback Claimants
          • Recordkeeping and Registration by Dealers
          • Other Provisions
      • Qualification Requirements for Distilled Spirits Plants
      • Operation of Distilled Spirits Plants
        • GENERAL PROVISIONS
        • OPERATIONS ON BONDED PREMISES
          • General
          • Production
          • Storage
          • Denaturation
        • REPEALED
      • Industrial Use of Distilled Spirits
      • General Provisions Relating to Distilled Spirits
        • RETURN OF MATERIALS USED IN THE MANUFACTURE OR RECOVERY OF DISTILLED SPIRITS
        • REGULATION OF TRAFFIC IN CONTAINERS OF DISTILLED SPIRITS
        • MISCELLANEOUS PROVISIONS
      • Bonded and Taxpaid Wine Premises
        • ESTABLISHMENT
        • OPERATIONS
        • CELLAR TREATMENT AND CLASSIFICATION OF WINE
        • GENERAL
      • Breweries
        • ESTABLISHMENT
        • OPERATIONS
      • Miscellaneous Plants and Warehouses
        • VINEGAR PLANTS
        • VOLATILE FRUIT-FLAVOR CONCENTRATE PLANTS
        • REPEALED
      • Miscellaneous General Provisions
      • Penalties, Seizures, and Forfeitures Relating to Liquors
        • PENALTY, SEIZURE, AND FORFEITURE PROVISIONS APPLICABLE TO DISTILLING, RECTIFYING, AND DISTILLED AND RECTIFIED PRODUCTS
        • PENALTY AND FORFEITURE PROVISIONS APPLICABLE TO WINE AND WINE PRODUCTION
        • PENALTY, SEIZURE, AND FORFEITURE PROVISIONS APPLICABLE TO BEER AND BREWING
        • PENALTY, SEIZURE, AND FORFEITURE PROVISIONS COMMON TO LIQUORS
        • REPEALED
    • TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES
      • Definitions; Rate and Payment of Tax; Exemption From Tax; and Refund and Drawback of Tax
      • Qualification Requirements for Manufacturers and Importers of Tobacco Products and Cigarette Papers and Tubes, and Export Warehouse Proprietors
      • Operations by Manufacturers and Importers of Tobacco Products and Cigarette Papers and Tubes and Export Warehouse Proprietors
      • Occupational Tax
      • Records of Manufacturers and Importers of Tobacco Products and Cigarette Papers and Tubes, and Export Warehouse Proprietors
      • General Provisions
      • Penalties and Forfeitures
    • MACHINE GUNS, DESTRUCTIVE DEVICES, AND CERTAIN OTHER FIREARMS
      • Taxes
        • SPECIAL TAXES
        • TAX ON TRANSFERRING FIREARMS
        • TAX ON MAKING FIREARMS
      • General Provisions and Exemptions
        • GENERAL PROVISIONS
        • EXEMPTIONS
      • Prohibited Acts
      • Penalties and Forfeitures
    • GREENMAIL
    • STRUCTURED SETTLEMENT FACTORING TRANSACTIONS
  • Procedure and Administration
    • INFORMATION AND RETURNS
      • Returns and Records
        • RECORDS, STATEMENTS, AND SPECIAL RETURNS
        • TAX RETURNS OR STATEMENTS
          • General Requirement
          • Income Tax Returns
          • Estate and Gift Tax Returns
          • Miscellaneous Provisions
        • INFORMATION RETURNS
          • Information Concerning Persons Subject to Special Provisions
          • Information Concerning Transactions With Other Persons
          • Information Regarding Wages Paid Employees
          • Information Regarding Health Insurance Coverage
          • Registration of and Information Concerning Pension, Etc., Plans
          • Information Concerning Tax Return Preparers
        • SIGNING AND VERIFYING OF RETURNS AND OTHER DOCUMENTS
        • TIME FOR FILING RETURNS AND OTHER DOCUMENTS
        • EXTENSION OF TIME FOR FILING RETURNS
        • PLACE FOR FILING RETURNS OR OTHER DOCUMENTS
        • DESIGNATION OF INCOME TAX PAYMENTS TO PRESIDENTIAL ELECTION CAMPAIGN FUND
      • Miscellaneous Provisions
    • TIME AND PLACE FOR PAYING TAX
      • Place and Due Date for Payment of Tax
      • Extensions of Time for Payment
    • ASSESSMENT
      • In General
      • Deficiency Procedures in the Case of Income, Estate, Gift, and Certain Excise Taxes
      • Tax Treatment of Partnership Items
      • Treatment of Electing Large Partnerships
        • TREATMENT OF PARTNERSHIP ITEMS AND ADJUSTMENTS
        • PARTNERSHIP LEVEL ADJUSTMENTS
          • Adjustments by Secretary
          • Claims for Adjustments by Partnership
        • DEFINITIONS AND SPECIAL RULES
    • COLLECTION
      • General Provisions
      • Receipt of Payment
      • Lien for Taxes
        • DUE PROCESS FOR LIENS
        • LIENS
      • Seizure of Property for Collection of Taxes
        • DUE PROCESS FOR COLLECTIONS
        • LEVY
      • Repealed
    • ABATEMENTS, CREDITS, AND REFUNDS
      • Procedure in General
      • Rules of Special Application
    • LIMITATIONS
      • Limitations on Assessment and Collection
      • Limitations on Credit or Refund
      • Mitigation of Effect of Period of Limitations
      • Periods of Limitation in Judicial Proceedings
    • INTEREST
      • Interest on Underpayments
      • Interest on Overpayments
      • Determination of Interest Rate; Compounding of Interest
      • Notice Requirements
    • ADDITIONS TO THE TAX, ADDITIONAL AMOUNTS, AND ASSESSABLE PENALTIES
      • Additions to the Tax and Additional Amounts
        • GENERAL PROVISIONS
        • ACCURACY-RELATED AND FRAUD PENALTIES
        • APPLICABLE RULES
      • Assessable Penalties
        • GENERAL PROVISIONS
        • FAILURE TO COMPLY WITH CERTAIN INFORMATION REPORTING REQUIREMENTS
      • Procedural Requirements
    • GENERAL PROVISIONS RELATING TO STAMPS
    • JEOPARDY, RECEIVERSHIPS, ETC.
      • Jeopardy
        • TERMINATION OF TAXABLE YEAR
        • JEOPARDY ASSESSMENTS
        • SPECIAL RULES WITH RESPECT TO CERTAIN CASH
      • Receiverships, Etc.
    • TRANSFEREES AND FIDUCIARIES
    • LICENSING AND REGISTRATION
      • Licensing
      • Registration
    • BONDS
    • CLOSING AGREEMENTS AND COMPROMISES
    • CRIMES, OTHER OFFENSES, AND FORFEITURES
      • Crimes
        • GENERAL PROVISIONS
        • PENALTIES APPLICABLE TO CERTAIN TAXES
      • Other Offenses
      • Forfeitures
        • PROPERTY SUBJECT TO FORFEITURE
        • PROVISIONS COMMON TO FORFEITURES
      • Miscellaneous Penalty and Forfeiture Provisions
    • JUDICIAL PROCEEDINGS
      • Civil Actions by the United States
      • Proceedings by Taxpayers and Third Parties
      • The Tax Court
        • ORGANIZATION AND JURISDICTION
        • PROCEDURE
        • MISCELLANEOUS PROVISIONS
        • DECLARATORY JUDGMENTS
      • Court Review of Tax Court Decisions
      • Burden of Proof
    • MISCELLANEOUS PROVISIONS
    • DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE
      • Examination and Inspection
      • General Powers and Duties
      • Repealed
      • Possessions
    • DEFINITIONS
    • GENERAL RULES
      • Application of Internal Revenue Laws
      • Effective Date and Related Provisions
      • Provisions Affecting More Than One Subtitle
  • The Joint Committee on Taxation
    • ORGANIZATION AND MEMBERSHIP OF THE JOINT COMMITTEE
    • POWERS AND DUTIES OF THE JOINT COMMITTEE
  • Financing of Presidential Election Campaigns
    • PRESIDENTIAL ELECTION CAMPAIGN FUND
    • PRESIDENTIAL PRIMARY MATCHING PAYMENT ACCOUNT
  • Trust Fund Code
    • TRUST FUND CODE
      • Establishment of Trust Funds
      • General Provisions
  • Coal Industry Health Benefits
    • COAL INDUSTRY HEALTH BENEFITS
      • Definitions of General Applicability
      • Combined Benefit Fund
        • ESTABLISHMENT AND BENEFITS
        • FINANCING
  • Group Health Plan Requirements
    • GROUP HEALTH PLAN REQUIREMENTS
      • Requirements Relating to Portability, Access, and Renewability
      • Other Requirements
      • General Provisions
  • Version 2010-02-01

Subtitle A

Income Taxes

A - CHAPTER 1

NORMAL TAXES AND SURTAXES

A.1 - Subchapter A

Determination of Tax Liability

A.1.A - PART I

TAX ON INDIVIDUALS

Tax imposed

(a) Married individuals filing joint returns and surviving spouses There is hereby imposed on the taxable income of—

  • (1) every married individual (as defined in section 7703) who makes a single return jointly with his spouse under section 6013, and

  • (2) every surviving spouse (as defined in section 2 (a)),

    a tax determined in accordance with the following table:

    If taxable income is: The tax is: Not over $36,900 15% of taxable income. Over $36,900 but not over $89,150 $5,535, plus 28% of the excess over $36,900. Over $89,150 but not over $140,000 $20,165, plus 31% of the excess over $89,150. Over $140,000 but not over $250,000 $35,928.50, plus 36% of the excess over $140,000. Over $250,000 $75,528.50, plus 39.6% of the excess over $250,000.

(b) Heads of households There is hereby imposed on the taxable income of every head of a household (as defined in section 2 (b)) a tax determined in accordance with the following table:

If taxable income is: The tax is: Not over $29,600 15% of taxable income. Over $29,600 but not over $76,400 $4,440, plus 28% of the excess over $29,600. Over $76,400 but not over $127,500 $17,544, plus 31% of the excess over $76,400. Over $127,500 but not over $250,000 $33,385, plus 36% of the excess over $127,500. Over $250,000 $77,485, plus 39.6% of the excess over $250,000.

(c) Unmarried individuals (other than surviving spouses and heads of households) There is hereby imposed on the taxable income of every individual (other than a surviving spouse as defined in section 2 (a) or the head of a household as defined in section 2 (b)) who is not a married individual (as defined in section 7703) a tax determined in accordance with the following table:

If taxable income is: The tax is: Not over $22,100 15% of taxable income. Over $22,100 but not over $53,500 $3,315, plus 28% of the excess over $22,100. Over $53,500 but not over $115,000 $12,107, plus 31% of the excess over $53,500. Over $115,000 but not over $250,000 $31,172, plus 36% of the excess over $115,000. Over $250,000 $79,772, plus 39.6% of the excess over $250,000.

(d) Married individuals filing separate returns There is hereby imposed on the taxable income of every married individual (as defined in section 7703) who does not make a single return jointly with his spouse under section 6013, a tax determined in accordance with the following table:

If taxable income is: The tax is: Not over $18,450 15% of taxable income. Over $18,450 but not over $44,575 $2,767.50, plus 28% of the excess over $18,450. Over $44,575 but not over $70,000 $10,082.50, plus 31% of the excess over $44,575. Over $70,000 but not over $125,000 $17,964.25, plus 36% of the excess over $70,000. Over $125,000 $37,764.25, plus 39.6% of the excess over $125,000.

(e) Estates and trusts There is hereby imposed on the taxable income of—

  • (1) every estate, and

  • (2) every trust,

    taxable under this subsection a tax determined in accordance with the following table:

    If taxable income is: The tax is: Not over $1,500 15% of taxable income. Over $1,500 but not over $3,500 $225, plus 28% of the excess over $1,500. Over $3,500 but not over $5,500 $785, plus 31% of the excess over $3,500. Over $5,500 but not over $7,500 $1,405, plus 36% of the excess over $5,500. Over $7,500 $2,125, plus 39.6% of the excess over $7,500.

(f) Phaseout of marriage penalty in 15-percent bracket; adjustments in tax tables so that inflation will not result in tax increases
  • (1) In general Not later than December 15 of 1993, and each subsequent calendar year, the Secretary shall prescribe tables which shall apply in lieu of the tables contained in subsections (a), (b), (c), (d), and (e) with respect to taxable years beginning in the succeeding calendar year.

  • (2) Method of prescribing tables The table which under paragraph (1) is to apply in lieu of the table contained in subsection (a), (b), (c), (d), or (e), as the case may be, with respect to taxable years beginning in any calendar year shall be prescribed—

    • (A) except as provided in paragraph (8), by increasing the minimum and maximum dollar amounts for each rate bracket for which a tax is imposed under such table by the cost-of-living adjustment for such calendar year,

    • (B) by not changing the rate applicable to any rate bracket as adjusted under subparagraph (A), and

    • (C) by adjusting the amounts setting forth the tax to the extent necessary to reflect the adjustments in the rate brackets.

  • (3) Cost-of-living adjustment For purposes of paragraph (2), the cost-of-living adjustment for any calendar year is the percentage (if any) by which—

    • (A) the CPI for the preceding calendar year, exceeds

    • (B) the CPI for the calendar year 1992.

  • (4) CPI for any calendar year For purposes of paragraph (3), the CPI for any calendar year is the average of the Consumer Price Index as of the close of the 12-month period ending on August 31 of such calendar year.

  • (5) Consumer Price Index For purposes of paragraph (4), the term "Consumer Price Index" means the last Consumer Price Index for all-urban consumers published by the Department of Labor. For purposes of the preceding sentence, the revision of the Consumer Price Index which is most consistent with the Consumer Price Index for calendar year 1986 shall be used.

  • (6) Rounding
    • (A) In general If any increase determined under paragraph (2)(A), section 63 (c)(4), section 68(b)(2) or section 151 (d)(4) is not a multiple of $50, such increase shall be rounded to the next lowest multiple of $50.

    • (B) Table for married individuals filing separately In the case of a married individual filing a separate return, subparagraph (A) (other than with respect to sections 63 (c)(4) and 151 (d)(4)(A)) shall be applied by substituting "$25" for "$50" each place it appears.

  • (7) Special rule for certain brackets
    • (A) Calendar year 1994 In prescribing the tables under paragraph (1) which apply with respect to taxable years beginning in calendar year 1994, the Secretary shall make no adjustment to the dollar amounts at which the 36 percent rate bracket begins or at which the 39.6 percent rate begins under any table contained in subsection (a), (b), (c), (d), or (e).

    • (B) Later calendar years In prescribing tables under paragraph (1) which apply with respect to taxable years beginning in a calendar year after 1994, the cost-of-living adjustment used in making adjustments to the dollar amounts referred to in subparagraph (A) shall be determined under paragraph (3) by substituting "1993" for "1992".

  • (8) Elimination of marriage penalty in 15-percent bracket With respect to taxable years beginning after December 31, 2003, in prescribing the tables under paragraph (1)—

    • (A) the maximum taxable income in the 15-percent rate bracket in the table contained in subsection (a) (and the minimum taxable income in the next higher taxable income bracket in such table) shall be 200 percent of the maximum taxable income in the 15-percent rate bracket in the table contained in subsection (c) (after any other adjustment under this subsection), and

    • (B) the comparable taxable income amounts in the table contained in subsection (d) shall be 1/2 of the amounts determined under subparagraph (A).

(g) Certain unearned income of children taxed as if parent's income
  • (1) In general In the case of any child to whom this subsection applies, the tax imposed by this section shall be equal to the greater of—

    • (A) the tax imposed by this section without regard to this subsection, or

    • (B) the sum of—
      • (i) the tax which would be imposed by this section if the taxable income of such child for the taxable year were reduced by the net unearned income of such child, plus

      • (ii) such child's share of the allocable parental tax.

  • (2) Child to whom subsection applies This subsection shall apply to any child for any taxable year if—

    • (A) such child—
      • (i) has not attained age 18 before the close of the taxable year, or

      • (ii)
        • (I) has attained age 18 before the close of the taxable year and meets the age requirements of section 152 (c)(3) (determined without regard to subparagraph (B) thereof), and

        • (II) whose earned income (as defined in section 911 (d)(2)) for such taxable year does not exceed one-half of the amount of the individual's support (within the meaning of section 152 (c)(1)(D) after the application of section 152 (f)(5) (without regard to subparagraph (A) thereof)) for such taxable year,

    • (B) either parent of such child is alive at the close of the taxable year, and

    • (C) such child does not file a joint return for the taxable year.

  • (3) Allocable parental tax For purposes of this subsection—

    • (A) In general The term "allocable parental tax" means the excess of—

      • (i) the tax which would be imposed by this section on the parent's taxable income if such income included the net unearned income of all children of the parent to whom this subsection applies, over

      • (ii) the tax imposed by this section on the parent without regard to this subsection.

        For purposes of clause (i), net unearned income of all children of the parent shall not be taken into account in computing any exclusion, deduction, or credit of the parent.

    • (B) Child's share A child's share of any allocable parental tax of a parent shall be equal to an amount which bears the same ratio to the total allocable parental tax as the child's net unearned income bears to the aggregate net unearned income of all children of such parent to whom this subsection applies.

    • (C) Special rule where parent has different taxable year Except as provided in regulations, if the parent does not have the same taxable year as the child, the allocable parental tax shall be determined on the basis of the taxable year of the parent ending in the child's taxable year.

  • (4) Net unearned income For purposes of this subsection—

    • (A) In general The term "net unearned income" means the excess of—

      • (i) the portion of the adjusted gross income for the taxable year which is not attributable to earned income (as defined in section 911 (d)(2)), over

      • (ii) the sum of—
        • (I) the amount in effect for the taxable year under section 63 (c)(5)(A) (relating to limitation on standard deduction in the case of certain dependents), plus

        • (II) the greater of the amount described in subclause (I) or, if the child itemizes his deductions for the taxable year, the amount of the itemized deductions allowed by this chapter for the taxable year which are directly connected with the production of the portion of adjusted gross income referred to in clause (i).

    • (B) Limitation based on taxable income The amount of the net unearned income for any taxable year shall not exceed the individual's taxable income for such taxable year.

    • (C) Treatment of distributions from qualified disability trusts For purposes of this subsection, in the case of any child who is a beneficiary of a qualified disability trust (as defined in section 642 (b)(2)(C)(ii)), any amount included in the income of such child under sections 652 and 662 during a taxable year shall be considered earned income of such child for such taxable year.

  • (5) Special rules for determining parent to whom subsection applies For purposes of this subsection, the parent whose taxable income shall be taken into account shall be—

    • (A) in the case of parents who are not married (within the meaning of section 7703), the custodial parent (within the meaning of section 152(e)) of the child, and

    • (B) in the case of married individuals filing separately, the individual with the greater taxable income.

  • (6) Providing of parent's TIN The parent of any child to whom this subsection applies for any taxable year shall provide the TIN of such parent to such child and such child shall include such TIN on the child's return of tax imposed by this section for such taxable year.

  • (7) Election to claim certain unearned income of child on parent's return
    • (A) In general If—

      • (i) any child to whom this subsection applies has gross income for the taxable year only from interest and dividends (including Alaska Permanent Fund dividends),

      • (ii) such gross income is more than the amount described in paragraph (4)(A)(ii)(I) and less than 10 times the amount so described,

      • (iii) no estimated tax payments for such year are made in the name and TIN of such child, and no amount has been deducted and withheld under section 3406, and

      • (iv) the parent of such child (as determined under paragraph (5)) elects the application of subparagraph (B),

        such child shall be treated (other than for purposes of this paragraph) as having no gross income for such year and shall not be required to file a return under section 6012.

    • (B) Income included on parent's return In the case of a parent making the election under this paragraph—

      • (i) the gross income of each child to whom such election applies (to the extent the gross income of such child exceeds twice the amount described in paragraph (4)(A)(ii)(I)) shall be included in such parent's gross income for the taxable year,

      • (ii) the tax imposed by this section for such year with respect to such parent shall be the amount equal to the sum of—
        • (I) the amount determined under this section after the application of clause (i), plus

        • (II) for each such child, 10 percent of the lesser of the amount described in paragraph (4)(A)(ii)(I) or the excess of the gross income of such child over the amount so described, and

      • (iii) any interest which is an item of tax preference under section 57(a)(5) of the child shall be treated as an item of tax preference of such parent (and not of such child).

    • (C) Regulations The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this paragraph.

(h) Maximum capital gains rate
  • (1) In general If a taxpayer has a net capital gain for any taxable year, the tax imposed by this section for such taxable year shall not exceed the sum of—

    • (A) a tax computed at the rates and in the same manner as if this subsection had not been enacted on the greater of—
      • (i) taxable income reduced by the net capital gain; or

      • (ii) the lesser of—
        • (I) the amount of taxable income taxed at a rate below 25 percent; or

        • (II) taxable income reduced by the adjusted net capital gain;

    • (B) 5 percent (0 percent in the case of taxable years beginning after 2007) of so much of the adjusted net capital gain (or, if less, taxable income) as does not exceed the excess (if any) of—
      • (i) the amount of taxable income which would (without regard to this paragraph) be taxed at a rate below 25 percent, over

      • (ii) the taxable income reduced by the adjusted net capital gain;

    • (C) 15 percent of the adjusted net capital gain (or, if less, taxable income) in excess of the amount on which a tax is determined under subparagraph (B);

    • (D) 25 percent of the excess (if any) of—
      • (i) the unrecaptured section 1250 gain (or, if less, the net capital gain (determined without regard to paragraph (11))), over

      • (ii) the excess (if any) of—
        • (I) the sum of the amount on which tax is determined under subparagraph (A) plus the net capital gain, over

        • (II) taxable income; and

    • (E) 28 percent of the amount of taxable income in excess of the sum of the amounts on which tax is determined under the preceding subparagraphs of this paragraph.

  • (2) Net capital gain taken into account as investment income For purposes of this subsection, the net capital gain for any taxable year shall be reduced (but not below zero) by the amount which the taxpayer takes into account as investment income under section 163 (d)(4)(B)(iii).

  • (3) Adjusted net capital gain For purposes of this subsection, the term "adjusted net capital gain" means the sum of—

    • (A) net capital gain (determined without regard to paragraph (11)) reduced (but not below zero) by the sum of—
      • (i) unrecaptured section 1250 gain, and

      • (ii) 28-percent rate gain, plus

    • (B) qualified dividend income (as defined in paragraph (11)).

  • (4) 28-percent rate gain For purposes of this subsection, the term "28-percent rate gain" means the excess (if any) of—

    • (A) the sum of—
      • (i) collectibles gain; and

      • (ii) section 1202 gain, over

    • (B) the sum of—
      • (i) collectibles loss;

      • (ii) the net short-term capital loss; and

      • (iii) the amount of long-term capital loss carried under section 1212 (b)(1)(B) to the taxable year.

  • (5) Collectibles gain and loss For purposes of this subsection—

    • (A) In general The terms "collectibles gain" and "collectibles loss" mean gain or loss (respectively) from the sale or exchange of a collectible (as defined in section 408 (m) without regard to paragraph (3) thereof) which is a capital asset held for more than 1 year but only to the extent such gain is taken into account in computing gross income and such loss is taken into account in computing taxable income.

    • (B) Partnerships, etc. For purposes of subparagraph (A), any gain from the sale of an interest in a partnership, S corporation, or trust which is attributable to unrealized appreciation in the value of collectibles shall be treated as gain from the sale or exchange of a collectible. Rules similar to the rules of section 751 shall apply for purposes of the preceding sentence.

  • (6) Unrecaptured section 1250 gain For purposes of this subsection—

    • (A) In general The term "unrecaptured section 1250 gain" means the excess (if any) of—

      • (i) the amount of long-term capital gain (not otherwise treated as ordinary income) which would be treated as ordinary income if section 1250 (b)(1) included all depreciation and the applicable percentage under section 1250 (a) were 100 percent, over

      • (ii) the excess (if any) of—
        • (I) the amount described in paragraph (4)(B); over

        • (II) the amount described in paragraph (4)(A).

    • (B) Limitation with respect to section 1231 property The amount described in subparagraph (A)(i) from sales, exchanges, and conversions described in section 1231 (a)(3)(A) for any taxable year shall not exceed the net section 1231 gain (as defined in section 1231 (c)(3)) for such year.

  • (7) Section 1202 gain For purposes of this subsection, the term "section 1202 gain" means the excess of—

    • (A) the gain which would be excluded from gross income under section 1202 but for the percentage limitation in section 1202 (a), over

    • (B) the gain excluded from gross income under section 1202.

  • (8) Coordination with recapture of net ordinary losses under section 1231 If any amount is treated as ordinary income under section 1231 (c), such amount shall be allocated among the separate categories of net section 1231 gain (as defined in section 1231 (c)(3)) in such manner as the Secretary may by forms or regulations prescribe.

  • (9) Regulations The Secretary may prescribe such regulations as are appropriate (including regulations requiring reporting) to apply this subsection in the case of sales and exchanges by pass-thru entities and of interests in such entities.

  • (10) Pass-thru entity defined For purposes of this subsection, the term "pass-thru entity" means—

    • (A) a regulated investment company;

    • (B) a real estate investment trust;

    • (C) an S corporation;

    • (D) a partnership;

    • (E) an estate or trust;

    • (F) a common trust fund; and

    • (G) a qualified electing fund (as defined in section 1295).

  • (11) Dividends taxed as net capital gain
    • (A) In general For purposes of this subsection, the term "net capital gain" means net capital gain (determined without regard to this paragraph) increased by qualified dividend income.

    • (B) Qualified dividend income For purposes of this paragraph—

      • (i) In general The term "qualified dividend income" means dividends received during the taxable year from—
        • (I) domestic corporations, and

        • (II) qualified foreign corporations.

      • (ii) Certain dividends excluded Such term shall not include—
        • (I) any dividend from a corporation which for the taxable year of the corporation in which the distribution is made, or the preceding taxable year, is a corporation exempt from tax under section 501 or 521,

        • (II) any amount allowed as a deduction under section 591 (relating to deduction for dividends paid by mutual savings banks, etc.), and

        • (III) any dividend described in section 404 (k).

      • (iii) Coordination with section 246 (c) Such term shall not include any dividend on any share of stock—
        • (I) with respect to which the holding period requirements of section 246 (c) are not met (determined by substituting in section 246 (c) "60 days" for "45 days" each place it appears and by substituting "121-day period" for "91-day period"), or

        • (II) 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.

    • (C) Qualified foreign corporations
      • (i) In general Except as otherwise provided in this paragraph, the term "qualified foreign corporation" means any foreign corporation if—
        • (I) such corporation is incorporated in a possession of the United States, or

        • (II) such corporation is eligible for benefits of a comprehensive income tax treaty with the United States which the Secretary determines is satisfactory for purposes of this paragraph and which includes an exchange of information program.

      • (ii) Dividends on stock readily tradable on United States securities market A foreign corporation not otherwise treated as a qualified foreign corporation under clause (i) shall be so treated with respect to any dividend paid by such corporation if the stock with respect to which such dividend is paid is readily tradable on an established securities market in the United States.

      • (iii) Exclusion of dividends of certain foreign corporations Such term shall not include any foreign corporation which for the taxable year of the corporation in which the dividend was paid, or the preceding taxable year, is a passive foreign investment company (as defined in section 1297).

      • (iv) Coordination with foreign tax credit limitation Rules similar to the rules of section 904 (b)(2)(B) shall apply with respect to the dividend rate differential under this paragraph.

    • (D) Special rules
      • (i) Amounts taken into account as investment income Qualified dividend income shall not include any amount which the taxpayer takes into account as investment income under section 163 (d)(4)(B).

      • (ii) Extraordinary dividends If a taxpayer to whom this section applies receives, with respect to any share of stock, qualified dividend income from 1 or more dividends which are extraordinary dividends (within the meaning of section 1059 (c)), any loss on the sale or exchange of such share shall, to the extent of such dividends, be treated as long-term capital loss.

      • (iii) Treatment of dividends from regulated investment companies and real estate investment trusts A dividend received from a regulated investment company or a real estate investment trust shall be subject to the limitations prescribed in sections 854 and 857.

(i) Rate reductions after 2000
  • (1) 10-percent rate bracket
    • (A) In general In the case of taxable years beginning after December 31, 2000—

      • (i) the rate of tax under subsections (a), (b), (c), and (d) on taxable income not over the initial bracket amount shall be 10 percent, and

      • (ii) the 15 percent rate of tax shall apply only to taxable income over the initial bracket amount but not over the maximum dollar amount for the 15-percent rate bracket.

    • (B) Initial bracket amount For purposes of this paragraph, the initial bracket amount is—

      • (i) $14,000 in the case of subsection (a),

      • (ii) $10,000 in the case of subsection (b), and

      • (iii) 1/2 the amount applicable under clause (i) (after adjustment, if any, under subparagraph (C)) in the case of subsections (c) and (d).

    • (C) Inflation adjustment In prescribing the tables under subsection (f) which apply with respect to taxable years beginning in calendar years after 2003—

      • (i) the cost-of-living adjustment shall be determined under subsection (f)(3) by substituting "2002" for "1992" in subparagraph (B) thereof, and

      • (ii) the adjustments under clause (i) shall not apply to the amount referred to in subparagraph (B)(iii).

        If any amount after adjustment under the preceding sentence is not a multiple of $50, such amount shall be rounded to the next lowest multiple of $50.

  • (2) Reductions in rates after June 30, 2001 In the case of taxable years beginning in a calendar year after 2000, the corresponding percentage specified for such calendar year in the following table shall be substituted for the otherwise applicable tax rate in the tables under subsections (a), (b), (c), (d), and (e).

    In the case of taxable years beginning during calendar year: The corresponding percentages shall be substituted for the following percentages: 28% 31% 36% 39.6% 200127.5%30.5%35.5%39.1% 200227.0%30.0%35.0%38.6% 2003 and thereafter 25.0%28.0%33.0%35.0%

  • (3) Adjustment of tables The Secretary shall adjust the tables prescribed under subsection (f) to carry out this subsection.





    Definitions and special rules

    (a) Definition of surviving spouse
    • (1) In general For purposes of section 1, the term "surviving spouse" means a taxpayer—

      • (A) whose spouse died during either of his two taxable years immediately preceding the taxable year, and

      • (B) who maintains as his home a household which constitutes for the taxable year the principal place of abode (as a member of such household) of a dependent
        • (i) who (within the meaning of section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof) is a son, stepson, daughter, or stepdaughter of the taxpayer, and

        • (ii) with respect to whom the taxpayer is entitled to a deduction for the taxable year under section 151.

          For purposes of this paragraph, an individual shall be considered as maintaining a household only if over half of the cost of maintaining the household during the taxable year is furnished by such individual.

    • (2) Limitations Notwithstanding paragraph (1), for purposes of section 1 a taxpayer shall not be considered to be a surviving spouse—

      • (A) if the taxpayer has remarried at any time before the close of the taxable year, or

      • (B) unless, for the taxpayer's taxable year during which his spouse died, a joint return could have been made under the provisions of section 6013 (without regard to subsection (a)(3) thereof).

    • (3) Special rule where deceased spouse was in missing status If an individual was in a missing status (within the meaning of section 6013 (f)(3)) as a result of service in a combat zone (as determined for purposes of section 112) and if such individual remains in such status until the date referred to in subparagraph (A) or (B), then, for purposes of paragraph (1)(A), the date on which such individual died shall be treated as the earlier of the date determined under subparagraph (A) or the date determined under subparagraph (B):

      • (A) the date on which the determination is made under section 556 of title 37 of the United States Code or under section 5566 of title 5 of such Code (whichever is applicable) that such individual died while in such missing status, or

      • (B) except in the case of the combat zone designated for purposes of the Vietnam conflict, the date which is 2 years after the date designated under section 112 as the date of termination of combatant activities in that zone.

    (b) Definition of head of household
    • (1) In general For purposes of this subtitle, an individual shall be considered a head of a household if, and only if, such individual is not married at the close of his taxable year, is not a surviving spouse (as defined in subsection (a)), and either—

      • (A) maintains as his home a household which constitutes for more than one-half of such taxable year the principal place of abode, as a member of such household, of—
        • (i) a qualifying child of the individual (as defined in section 152 (c), determined without regard to section 152 (e)), but not if such child—
          • (I) is married at the close of the taxpayer's taxable year, and

          • (II) is not a dependent of such individual by reason of section 152 (b)(2) or 152 (b)(3), or both, or

        • (ii) any other person who is a dependent of the taxpayer, if the taxpayer is entitled to a deduction for the taxable year for such person under section 151, or

      • (B) maintains a household which constitutes for such taxable year the principal place of abode of the father or mother of the taxpayer, if the taxpayer is entitled to a deduction for the taxable year for such father or mother under section 151.

        For purposes of this paragraph, an individual shall be considered as maintaining a household only if over half of the cost of maintaining the household during the taxable year is furnished by such individual.

    • (2) Determination of status For purposes of this subsection—

      • (A) an individual who is legally separated from his spouse under a decree of divorce or of separate maintenance shall not be considered as married;

      • (B) a taxpayer shall be considered as not married at the close of his taxable year if at any time during the taxable year his spouse is a nonresident alien; and

      • (C) a taxpayer shall be considered as married at the close of his taxable year if his spouse (other than a spouse described in subparagraph (B)) died during the taxable year.

    • (3) Limitations Notwithstanding paragraph (1), for purposes of this subtitle a taxpayer shall not be considered to be a head of a household—

      • (A) if at any time during the taxable year he is a nonresident alien; or

      • (B) by reason of an individual who would not be a dependent for the taxable year but for—
        • (i) subparagraph (H) of section 152 (d)(2), or

        • (ii) paragraph (3) of section 152 (d).

    (c) Certain married individuals living apart For purposes of this part, an individual shall be treated as not married at the close of the taxable year if such individual is so treated under the provisions of section 7703 (b).

    (d) Nonresident aliens In the case of a nonresident alien individual, the taxes imposed by sections 1 and 55 shall apply only as provided by section 871 or 877.

    (e) Cross reference For definition of taxable income, see section 63.



    Tax tables for individuals

    (a) Imposition of tax table tax
    • (1) In general In lieu of the tax imposed by section 1, there is hereby imposed for each taxable year on the taxable income of every individual—

      • (A) who does not itemize his deductions for the taxable year, and

      • (B) whose taxable income for such taxable year does not exceed the ceiling amount,

        a tax determined under tables, applicable to such taxable year, which shall be prescribed by the Secretary and which shall be in such form as he determines appropriate. In the table so prescribed, the amounts of the tax shall be computed on the basis of the rates prescribed by section 1.

    • (2) Ceiling amount defined For purposes of paragraph (1), the term "ceiling amount" means, with respect to any taxpayer, the amount (not less than $20,000) determined by the Secretary for the tax rate category in which such taxpayer falls.

    • (3) Authority to prescribe tables for taxpayers who itemize deductions The Secretary may provide that this section shall apply also for any taxable year to individuals who itemize their deductions. Any tables prescribed under the preceding sentence shall be on the basis of taxable income.

    (b) Section inapplicable to certain individuals This section shall not apply to—

    • (1) an individual making a return under section 443 (a)(1) for a period of less than 12 months on account of a change in annual accounting period, and

    • (2) an estate or trust.

    (c) Tax treated as imposed by section 1 For purposes of this title, the tax imposed by this section shall be treated as tax imposed by section 1.

    (d) Taxable income Whenever it is necessary to determine the taxable income of an individual to whom this section applies, the taxable income shall be determined under section 63.

    (e) Cross reference For computation of tax by Secretary, see section 6014.



    Repealed

    Section, acts Aug. 16, 1954, ch. 736, 68A Stat. 10; Feb. 26, 1964, Pub. L. 88-272, title II, § 232(f)(1), title III, § 301(b)(1), (3), 78 Stat. 111, 140; Dec. 30, 1969, Pub. L. 91-172, title VIII, § 802(c)(1)-(3), 83 Stat. 677, 678; Dec. 10, 1971, Pub. L. 92-178, title III, § 301(b), 85 Stat. 520, related to rules for optional tax.



    Cross references relating to tax on individuals

    (a) Other rates of tax on individuals, etc.
    • (1) For rates of tax on nonresident aliens, see section 871.

    • (2) For doubling of tax on citizens of certain foreign countries, see section 891.

    • (3) For rate of withholding in the case of nonresident aliens, see section 1441.

    • (4) For alternative minimum tax, see section 55.

    (b) Special limitations on tax
    • (1) For limitation on tax in case of income of members of Armed Forces, astronauts, and victims of certain terrorist attacks on death, see section 692.

    • (2) For computation of tax where taxpayer restores substantial amount held under claim of right, see section 1341.





      A.1.A - PART II

      TAX ON CORPORATIONS

      Tax imposed

      (a) Corporations in general A tax is hereby imposed for each taxable year on the taxable income of every corporation.

      (b) Amount of tax
      • (1) In general The amount of the tax imposed by subsection (a) shall be the sum of—

        • (A) 15 percent of so much of the taxable income as does not exceed $50,000,

        • (B) 25 percent of so much of the taxable income as exceeds $50,000 but does not exceed $75,000,

        • (C) 34 percent of so much of the taxable income as exceeds $75,000 but does not exceed $10,000,000, and

        • (D) 35 percent of so much of the taxable income as exceeds $10,000,000.

          In the case of a corporation which has taxable income in excess of $100,000 for any taxable year, the amount of tax determined under the preceding sentence for such taxable year shall be increased by the lesser of (i) 5 percent of such excess, or (ii) $11,750. In the case of a corporation which has taxable income in excess of $15,000,000, the amount of the tax determined under the foregoing provisions of this paragraph shall be increased by an additional amount equal to the lesser of (i) 3 percent of such excess, or (ii) $100,000.

      • (2) Certain personal service corporations not eligible for graduated rates Notwithstanding paragraph (1), the amount of the tax imposed by subsection (a) on the taxable income of a qualified personal service corporation (as defined in section 448 (d)(2)) shall be equal to 35 percent of the taxable income.

      (c) Exceptions Subsection (a) shall not apply to a corporation subject to a tax imposed by—

      • (1) section 594 (relating to mutual savings banks conducting life insurance business),

      • (2) subchapter L (sec. 801 and following, relating to insurance companies), or

      • (3) subchapter M (sec. 851 and following, relating to regulated investment companies and real estate investment trusts).

      (d) Foreign corporations In the case of a foreign corporation, the taxes imposed by subsection (a) and section 55 shall apply only as provided by section 882.



      Cross references relating to tax on corporations

      (1) For tax on the unrelated business income of certain charitable and other corporations exempt from tax under this chapter, see section 511.

      (2) For accumulated earnings tax and personal holding company tax, see parts I and II of subchapter G (sec. 531 and following).

      (3) For doubling of tax on corporations of certain foreign countries, see section 891.

      (4) For alternative tax in case of capital gains, see section 1201 (a).

      (5) For rate of withholding in case of foreign corporations, see section 1442.

      (6) For limitation on benefits of graduated rate schedule provided in section 11 (b), see section 1551.

      (7) For alternative minimum tax, see section 55.



      A.1.A - PART III

      CHANGES IN RATES DURING A TAXABLE YEAR

      Effect of changes

      (a) General rule If any rate of tax imposed by this chapter changes, and if the taxable year includes the effective date of the change (unless that date is the first day of the taxable year), then—

      • (1) tentative taxes shall be computed by applying the rate for the period before the effective date of the change, and the rate for the period on and after such date, to the taxable income for the entire taxable year; and

      • (2) the tax for such taxable year shall be the sum of that proportion of each tentative tax which the number of days in each period bears to the number of days in the entire taxable year.

      (b) Repeal of tax For purposes of subsection (a)—

      • (1) if a tax is repealed, the repeal shall be considered a change of rate; and

      • (2) the rate for the period after the repeal shall be zero.

      (c) Effective date of change For purposes of subsections (a) and (b)—

      • (1) if the rate changes for taxable years "beginning after" or "ending after" a certain date, the following day shall be considered the effective date of the change; and

      • (2) if a rate changes for taxable years "beginning on or after" a certain date, that date shall be considered the effective date of the change.

      (d) Section not to apply to inflation adjustments This section shall not apply to any change in rates under subsection (f) of section 1 (relating to adjustments in tax tables so that inflation will not result in tax increases).

      (e) References to highest rate If the change referred to in subsection (a) involves a change in the highest rate of tax imposed by section 1 or 11 (b), any reference in this chapter to such highest rate (other than in a provision imposing a tax by reference to such rate) shall be treated as a reference to the weighted average of the highest rates before and after the change determined on the basis of the respective portions of the taxable year before the date of the change and on or after the date of the change.

      (f) Rate reductions enacted by Economic Growth and Tax Relief Reconciliation Act of 2001 This section shall not apply to any change in rates under subsection (i) of section 1 (relating to rate reductions after 2000).



      A.1.A - PART IV

      CREDITS AGAINST TAX