-CITE-
26 USC CHAPTER 44 - QUALIFIED INVESTMENT ENTITIES 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle D - Miscellaneous Excise Taxes
CHAPTER 44 - QUALIFIED INVESTMENT ENTITIES
-HEAD-
CHAPTER 44 - QUALIFIED INVESTMENT ENTITIES
-MISC1-
Sec.
4981. Excise tax on undistributed income of real estate
investment trusts.
4982. Excise tax on undistributed income of regulated
investment companies.
AMENDMENTS
1986 - Pub. L. 99-514, title VI, Sec. 651(c), Oct. 22, 1986, 100
Stat. 2297, substituted: "QUALIFIED INVESTMENT ENTITIES" for "REAL
ESTATE INVESTMENT TRUSTS" as chapter heading, substituted "Excise
tax on undistributed income of real estate investment trusts" for
"Excise tax based on certain real estate investment trust taxable
income not distributed during the taxable year" in item 4981, and
added item 4982.
1976 - Pub. L. 94-455, title XVI, Sec. 1605(a), Oct. 4, 1976, 90
Stat. 1754, added chapter heading and section analysis.
-SECREF-
CHAPTER REFERRED TO IN OTHER SECTIONS
This chapter is referred to in sections 275, 6103, 6161, 6211,
6212, 6213, 6214, 6405, 6501, 6512, 6862, 6871, 7422 of this title.
-End-
-CITE-
26 USC Sec. 4981 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle D - Miscellaneous Excise Taxes
CHAPTER 44 - QUALIFIED INVESTMENT ENTITIES
-HEAD-
Sec. 4981. Excise tax on undistributed income of real estate
investment trusts
-STATUTE-
(a) Imposition of tax
There is hereby imposed a tax on every real estate investment
trust for each calendar year equal to 4 percent of the excess (if
any) of -
(1) the required distribution for such calendar year, over
(2) the distributed amount for such calendar year.
(b) Required distribution
For purposes of this section -
(1) In general
The term "required distribution" means, with respect to any
calendar year, the sum of -
(A) 85 percent of the real estate investment trust's ordinary
income for such calendar year, plus
(B) 95 percent of the real estate investment trust's capital
gain net income for such calendar year.
(2) Increase by prior year shortfall
The amount determined under paragraph (1) for any calendar year
shall be increased by the excess (if any) of -
(A) the grossed up required distribution for the preceding
calendar year, over
(B) the distributed amount for such preceding calendar year.
(3) Grossed up required distribution
The grossed up required distribution for any calendar year is
the required distribution for such year determined -
(A) with the application of paragraph (2) to such taxable
year, and
(B) by substituting "100 percent" for each percentage set
forth in paragraph (1).
(c) Distributed amount
For purposes of this section -
(1) In general
The term "distributed amount" means, with respect to any
calendar year, the sum of -
(A) the deduction for dividends paid (as defined in section
561) during such calendar year (but computed without regard to
that portion of such deduction which is attributable to the
amount excluded under section 857(b)(2)(D)), and
(B) any amount on which tax is imposed under subsection
(b)(1) or (b)(3)(A) of section 857 for any taxable year ending
in such calendar year.
(2) Increase by prior year overdistribution
The amount determined under paragraph (1) for any calendar year
shall be increased by the excess (if any) of -
(A) the distributed amount for the preceding calendar year
(determined with the application of this paragraph to such
preceding calendar year), over
(B) the grossed up required distribution for such preceding
calendar year.
(3) Determination of dividends paid
The amount of the dividends paid during any calendar year shall
be determined without regard to the provisions of section 858.
(d) Time for payment of tax
The tax imposed by this section for any calendar year shall be
paid on or before March 15 of the following calendar year.
(e) Definitions and special rules
For purposes of this section -
(1) Ordinary income
The term "ordinary income" means the real estate investment
trust taxable income (as defined in section 857(b)(2)) determined
-
(A) without regard to subparagraph (B) of section 857(b)(2),
(B) by not taking into account any gain or loss from the sale
or exchange of a capital asset, and
(C) by treating the calendar year as the trust's taxable
year.
(2) Capital gain net income
(A) In general
The term "capital gain net income" has the meaning given such
term by section 1222(9) (determined by treating the calendar
year as the trust's taxable year).
(B) Reduction for net ordinary loss
The amount determined under subparagraph (A) shall be reduced
by the amount of the trust's net ordinary loss for the taxable
year.
(C) Net ordinary loss
For purposes of this paragraph, the net ordinary loss for the
calendar year is the amount which would be net operating loss
of the trust for the calendar year if the amount of such loss
were determined in the same manner as ordinary income is
determined under paragraph (1).
(3) Treatment of deficiency distributions
In the case of any deficiency dividend (as defined in section
860(f)) -
(A) such dividend shall be taken into account when paid
without regard to section 860, and
(B) any income giving rise to the adjustment shall be treated
as arising when the dividend is paid.
-SOURCE-
(Added Pub. L. 94-455, title XVI, Sec. 1605(a), Oct. 4, 1976, 90
Stat. 1754; amended Pub. L. 99-514, title VI, Sec. 668(a), Oct. 22,
1986, 100 Stat. 2306; Pub. L. 100-647, title I, Sec. 1006(s)(1),
(3), Nov. 10, 1988, 102 Stat. 3418.)
-MISC1-
AMENDMENTS
1988 - Subsec. (c)(1)(A). Pub. L. 100-647, Sec. 1006(s)(3),
inserted "(but computed without regard to that portion of such
deduction which is attributable to the amount excluded under
section 857(b)(2)(D)" after "such calendar year".
Subsec. (e)(2). Pub. L. 100-647, Sec. 1006(s)(1), amended par.
(2) generally, designating existing provisions as subpar. (A) and
adding subpars. (B) and (C).
1986 - Pub. L. 99-514 substituted "Excise tax on undistributed
income of real estate investment trusts" for "Excise tax based on
certain real estate investment trust taxable income not distributed
during the taxable year" as section catchline and amended text
generally. Prior to amendment text read as follows: "Effective with
respect to taxable years beginning after December 31, 1979, there
is hereby imposed on each real estate investment trust for the
taxable year a tax equal to 3 percent of the amount (if any) by
which 75 percent of the real estate investment trust taxable income
(as defined in section 857(b)(2), but determined without regard to
section 857(b)(2)(B), and by excluding any net capital gain for the
taxable year) exceeds the amount of the dividends paid deduction
(as defined in section 561, but computed without regard to capital
gains dividends as defined in section 857(b)(3)(C) and without
regard to any dividend paid after the close of the taxable year)
for the taxable year. For purposes of the preceding sentence, the
determination of the real estate investment trust taxable income
shall be made by taking into account only the amount and character
of the items of income and deduction as reported by such trust in
its return for the taxable year."
EFFECTIVE DATE OF 1988 AMENDMENT
Amendment by Pub. L. 100-647 effective, except as otherwise
provided, as if included in the provision of the Tax Reform Act of
1986, Pub. L. 99-514, to which such amendment relates, see section
1019(a) of Pub. L. 100-647, set out as a note under section 1 of
this title.
EFFECTIVE DATE OF 1986 AMENDMENT
Amendment by Pub. L. 99-514 applicable to calendar years
beginning after Dec. 31, 1986, see section 669(b) of Pub. L.
99-514, set out as a note under section 856 of this title.
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in section 857 of this title.
-End-
-CITE-
26 USC Sec. 4982 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle D - Miscellaneous Excise Taxes
CHAPTER 44 - QUALIFIED INVESTMENT ENTITIES
-HEAD-
Sec. 4982. Excise tax on undistributed income of regulated
investment companies
-STATUTE-
(a) Imposition of tax
There is hereby imposed a tax on every regulated investment
company for each calendar year equal to 4 percent of the excess (if
any) of -
(1) the required distribution for such calendar year, over
(2) the distributed amount for such calendar year.
(b) Required distribution
For purposes of this section -
(1) In general
The term "required distribution" means, with respect to any
calendar year, the sum of -
(A) 98 percent of the regulated investment company's ordinary
income for such calendar year, plus
(B) 98 percent of the regulated investment company's capital
gain net income for the 1-year period ending on October 31 of
such calendar year.
(2) Increase by prior year shortfall
The amount determined under paragraph (1) for any calendar year
shall be increased by the excess (if any) of -
(A) the grossed up required distribution for the preceding
calendar year, over
(B) the distributed amount for such preceding calendar year.
(3) Grossed up required distribution
The grossed up required distribution for any calendar year is
the required distribution for such year determined -
(A) with the application of paragraph (2) to such taxable
year, and
(B) by substituting "100 percent" for each percentage set
forth in paragraph (1).
(c) Distributed amount
For purposes of this section -
(1) In general
The term "distributed amount" means, with respect to any
calendar year, the sum of -
(A) the deduction for dividends paid (as defined in section
561) during such calendar year, and
(B) any amount on which tax is imposed under subsection
(b)(1) or (b)(3)(A) of section 852 for any taxable year ending
in such calendar year.
(2) Increase by prior year overdistribution
The amount determined under paragraph (1) for any calendar year
shall be increased by the excess (if any) of -
(A) the distributed amount for the preceding calendar year
(determined with the application of this paragraph to such
preceding calendar year), over
(B) the grossed up required distribution for such preceding
calendar year.
(3) Determination of dividends paid
The amount of the dividends paid during any calendar year shall
be determined without regard to -
(A) the provisions of section 855, and
(B) any exempt-interest dividend as defined in section
852(b)(5).
(d) Time for payment of tax
The tax imposed by this section for any calendar year shall be
paid on or before March 15 of the following calendar year.
(e) Definitions and special rules
For purposes of this section -
(1) Ordinary income
The term "ordinary income" means the investment company taxable
income (as defined in section 852(b)(2)) determined -
(A) without regard to subparagraphs (A) and (D) of section
852(b)(2),
(B) by not taking into account any gain or loss from the sale
or exchange of a capital asset, and
(C) by treating the calendar year as the company's taxable
year.
(2) Capital gain net income
(A) In general
Except as provided in subparagraph (B), the term "capital
gain net income" has the meaning given such term by section
1222(9) (determined by treating the 1-year period ending on
October 31 of any calendar year as the company's taxable year).
(B) Reduction by net ordinary loss for calendar year
The amount determined under subparagraph (A) shall be reduced
(but not below the net capital gain) by the amount of the
company's net ordinary loss for the calendar year.
(C) Definitions
For purposes of this paragraph -
(i) Net capital gain
The term "net capital gain" has the meaning given such term
by section 1222(11) (determined by treating the 1-year period
ending on October 31 of the calendar year as the company's
taxable year).
(ii) Net ordinary loss
The net ordinary loss for the calendar year is the amount
which would be the net operating loss of the company for the
calendar year if the amount of such loss were determined in
the same manner as ordinary income is determined under
paragraph (1).
(3) Treatment of deficiency distributions
In the case of any deficiency dividend (as defined in section
860(f)) -
(A) such dividend shall be taken into account when paid
without regard to section 860, and
(B) any income giving rise to the adjustment shall be treated
as arising when the dividend is paid.
(4) Election to use taxable year in certain cases
(A) In general
If -
(i) the taxable year of the regulated investment company
ends with the month of November or December, and
(ii) such company makes an election under this paragraph,
subsection (b)(1)(B) and paragraph (2) of this subsection shall
be applied by taking into account the company's taxable year in
lieu of the 1-year period ending on October 31 of the calendar
year.
(B) Election revocable only with consent
An election under this paragraph, once made, may be revoked
only with the consent of the Secretary.
(5) Treatment of foreign currency gains and losses after October
31 of calendar year
Any foreign currency gain or loss which is attributable to a
section 988 transaction and which is properly taken into account
for the portion of the calendar year after October 31 shall not
be taken into account in determining the amount of the ordinary
income of the regulated investment company for such calendar year
but shall be taken into account in determining the ordinary
income of the investment company for the following calendar year.
In the case of any company making an election under paragraph
(4), the preceding sentence shall be applied by substituting the
last day of the company's taxable year for October 31.
(6) Treatment of gain recognized under section 1296
For purposes of determining a regulated investment company's
ordinary income -
(A) notwithstanding paragraph (1)(C), section 1296 shall be
applied as if such company's taxable year ended on October 31,
and
(B) any ordinary gain or loss from an actual disposition of
stock in a passive foreign investment company during the
portion of the calendar year after October 31 shall be taken
into account in determining such regulated investment company's
ordinary income for the following calendar year.
In the case of a company making an election under paragraph (4),
the preceding sentence shall be applied by substituting the last
day of the company's taxable year for October 31.
(f) Exception for certain regulated investment companies
This section shall not apply to any regulated investment company
for any calendar year if at all times during such calendar year
each shareholder in such company was either -
(1) a trust described in section 401(a) and exempt from tax
under section 501(a), or
(2) a segregated asset account of a life insurance company held
in connection with variable contracts (as defined in section
817(d)).
For purposes of the preceding sentence, any shares attributable to
an investment in the regulated investment company (not exceeding
$250,000) made in connection with the organization of such company
shall not be taken into account.
-SOURCE-
(Added Pub. L. 99-514, title VI, Sec. 651(a), Oct. 22, 1986, 100
Stat. 2294; amended Pub. L. 100-203, title X, Sec. 10104(b)(1),
Dec. 22, 1987, 101 Stat. 1330-387; Pub. L. 100-647, title I, Sec.
1006(l)(2), (5), (6), Nov. 10, 1988, 102 Stat. 3413, 3414; Pub. L.
101-239, title VII, Sec. 7204(a)(1), Dec. 19, 1989, 103 Stat. 2334;
Pub. L. 105-34, title XI, Sec. 1122(c)(1), Aug. 5, 1997, 111 Stat.
976.)
-MISC1-
AMENDMENTS
1997 - Subsec. (e)(6). Pub. L. 105-34 added par. (6).
1989 - Subsec. (b)(1)(A). Pub. L. 101-239 substituted "98
percent" for "97 percent".
1988 - Subsec. (e)(2). Pub. L. 100-647, Sec. 1006(l)(2), amended
par. (2) generally. Prior to amendment, par. (2) read as follows:
"The term 'capital gain net income' has the meaning given to such
term by section 1222(9) (determined by treating the 1-year period
ending on October 31 of any calendar year as the company's taxable
year)."
Subsec. (e)(5). Pub. L. 100-647, Sec. 1006(l)(5), added par. (5).
Subsec. (f). Pub. L. 100-647, Sec. 1006(l)(6), added subsec. (f).
1987 - Subsec. (b)(1)(B). Pub. L. 100-203 substituted "98
percent" for "90 percent".
EFFECTIVE DATE OF 1997 AMENDMENT
Amendment by Pub. L. 105-34 applicable to taxable years of United
States persons beginning after Dec. 31, 1997, and to taxable years
of foreign corporations ending with or within such taxable years of
United States persons, see section 1124 of Pub. L. 105-34, set out
as a note under section 532 of this title.
EFFECTIVE DATE OF 1989 AMENDMENT
Section 7204(a)(2) of Pub. L. 101-239 provided that: "The
amendment made by paragraph (1) [amending this section] shall apply
to calendar years ending after July 10, 1989."
EFFECTIVE DATE OF 1988 AMENDMENT
Amendment by Pub. L. 100-647 effective, except as otherwise
provided, as if included in the provision of the Tax Reform Act of
1986, Pub. L. 99-514, to which such amendment relates, see section
1019(a) of Pub. L. 100-647, set out as a note under section 1 of
this title.
EFFECTIVE DATE OF 1987 AMENDMENT
Section 10104(b)(2) of Pub. L. 100-203 provided that: "The
amendment made by paragraph (1) [amending this section] shall take
effect as if included in the amendments made by section 651 of the
Tax Reform Act of 1986 [section 651 of Pub. L. 99-514, see
Effective Date note below]."
EFFECTIVE DATE
Section 651(d) of Pub. L. 99-514 provided that: "The amendments
made by this section [enacting this section and amending sections
852 and 855 of this title] shall apply to calendar years beginning
after December 31, 1986."
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in section 852 of this title.
-End-
-CITE-
26 USC [CHAPTER 45 - REPEALED] 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle D - Miscellaneous Excise Taxes
[CHAPTER 45 - REPEALED]
-HEAD-
[CHAPTER 45 - REPEALED]
-End-
-CITE-
26 USC Secs. 4986 to 4990 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle D - Miscellaneous Excise Taxes
[CHAPTER 45 - REPEALED]
-HEAD-
[Secs. 4986 to 4990. Repealed. Pub. L. 100-418, title I, Sec.
1941(a), Aug. 23, 1988, 102 Stat. 1322]
-MISC1-
Section 4986, added Pub. L. 96-223, title I, Sec. 101(a)(1), Apr.
2, 1980, 94 Stat. 230, related to imposition of windfall profit tax
on domestic crude oil.
Section 4987, added Pub. L. 96-223, title I, Sec. 101(a)(1), Apr.
2, 1980, 94 Stat. 230; amended Pub. L. 97-34, title VI, Sec.
602(a), Aug. 13, 1981, 95 Stat. 337; Pub. L. 98-369, div. A, title
I, Sec. 25(a), July 18, 1984, 98 Stat. 506, related to amount of
windfall profit tax on domestic crude oil.
Section 4988, added Pub. L. 96-223, title I, Sec. 101(a)(1), Apr.
2, 1980, 94 Stat. 231; amended Pub. L. 97-448, title II, Sec.
201(a), (h)(1)(D), Jan. 12, 1983, 96 Stat. 2391, 2394; Pub. L.
99-514, title XIII, Sec. 1301(j)(4), Oct. 22, 1986, 100 Stat. 2657,
related to windfall profit and removal price.
Section 4989, added Pub. L. 96-223, title I, Sec. 101(a)(1), Apr.
2, 1980, 94 Stat. 233; amended Pub. L. 97-448, title II, Sec.
201(b), Jan. 12, 1983, 96 Stat. 2392, related to adjusted base
price for purposes of windfall profit tax on domestic crude oil.
Section 4990, added Pub. L. 96-223, title I, Sec. 101(a)(1), Apr.
2, 1980, 94 Stat. 234, related to phaseout of windfall profit tax
on domestic crude oil.
EFFECTIVE DATE OF REPEAL
Repeal applicable to crude oil removed from the premises on or
after Aug. 23, 1988, see section 1941(c) of Pub. L. 100-418, set
out as an Effective Date of 1988 Amendment note under section 164
of this title.
ALLOCATION OF NET REVENUES FROM WINDFALL PROFIT TAX TO CERTAIN USES
Pub. L. 96-223, title I, Sec. 102, Apr. 2, 1980, 94 Stat. 255,
provided for Windfall Profit Tax Account in Treasury, specified
uses for amounts in that Account, defined "net revenues", required
President to propose allocation of net revenues, and required
Secretary of the Treasury to make reports to Congress.
-End-
-CITE-
26 USC Secs. 4991 to 4994 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle D - Miscellaneous Excise Taxes
[CHAPTER 45 - REPEALED]
-HEAD-
[Secs. 4991 to 4994. Repealed. Pub. L. 100-418, title I, Sec.
1941(a), Aug. 23, 1988, 102 Stat. 1322]
-MISC1-
Section 4991, added Pub. L. 96-223, title I, Sec. 101(a)(1), Apr.
2, 1980, 94 Stat. 235; amended Pub. L. 97-34, title VI, Secs.
601(b)(1), 603(a), Aug. 13, 1981, 95 Stat. 336, 338; Pub. L.
97-448, title II, Sec. 201(c), Jan. 12, 1983, 96 Stat. 2392; Pub.
L. 99-514, title XVIII, Sec. 1879(h)(1), Oct. 22, 1986, 100 Stat.
2907, related to taxable crude oil and categories of oil.
Section 4992, added Pub. L. 96-223, title I, Sec. 101(a)(1), Apr.
2, 1980, 94 Stat. 236; amended Pub. L. 97-34, title VI, Sec.
603(c), Aug. 13, 1981, 95 Stat. 338; Pub. L. 97-354, Sec. 3(b)(2),
Oct. 19, 1982, 96 Stat. 1688; Pub. L. 97-448, title II, Sec.
201(d), Jan. 12, 1983, 96 Stat. 2392, related to independent
producer oil.
Section 4993, added Pub. L. 96-223, title I, Sec. 101(a)(1), Apr.
2, 1980, 94 Stat. 239; amended Pub. L. 97-448, title II, Sec.
201(e), Jan. 12, 1983, 96 Stat. 2392, related to incremental
tertiary oil.
Section 4994, added Pub. L. 96-223, title I, Sec. 101(a)(1), Apr.
2, 1980, 94 Stat. 241; amended Pub. L. 97-34, title VI, Secs.
601(b)(2), 603(b), 604(a)-(c), Aug. 13, 1981, 95 Stat. 337-339;
Pub. L. 97-248, title II, Sec. 291, Sept. 3, 1982, 96 Stat. 572;
Pub. L. 97-448, title I, Sec. 106(a)(2), (4)(B), (b), title II,
Sec. 201(f), Jan. 12, 1983, 96 Stat. 2388, 2390, 2392, related to
definitions and special rules with respect to exempt oil.
EFFECTIVE DATE OF REPEAL
Repeal applicable to crude oil removed from the premises on or
after Aug. 23, 1988, see section 1941(c) of Pub. L. 100-418, set
out as an Effective Date of 1988 Amendment note under section 164
of this title.
-End-
-CITE-
26 USC Secs. 4995 to 4998 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle D - Miscellaneous Excise Taxes
[CHAPTER 45 - REPEALED]
-HEAD-
[Secs. 4995 to 4998. Repealed. Pub. L. 100-418, title I, Sec.
1941(a), Aug. 23, 1988, 102 Stat. 1322]
-MISC1-
Section 4995, added Pub. L. 96-223, title I, Sec. 101(a)(1), Apr.
2, 1980, 94 Stat. 244; amended Pub. L. 97-34, title VI, Sec.
601(b)(3), Aug. 13, 1981, 95 Stat. 337; Pub. L. 97-448, title II,
Sec. 201(g), Jan. 12, 1983, 96 Stat. 2393, related to withholding
and depository requirements bearing on the windfall profit tax.
Section 4996, added Pub. L. 96-223, title I, Sec. 101(a)(1), Apr.
2, 1980, 94 Stat. 247; amended Pub. L. 97-248, title II, Sec.
284(a), Sept. 3, 1982, 96 Stat. 569; Pub. L. 97-354, Sec. 3(b)(1),
Oct. 19, 1982, 96 Stat. 1688; Pub. L. 97-448, title II, Sec.
201(h)(1)(A)-(C), (2), Jan. 12, 1983, 96 Stat. 2393-2395, provided
for other definitions and special rules bearing on the windfall
profit tax.
Section 4997, added Pub. L. 96-223, title I, Sec. 101(a)(1), Apr.
2, 1980, 94 Stat. 249; amended Pub. L. 97-448, title II, Sec.
201(i)(1), Jan. 12, 1983, 96 Stat. 2395, related to records and
information, and regulations, bearing on the windfall profit.
Section 4998, added Pub. L. 96-223, title I, Sec. 101(a)(1), Apr.
2, 1980, 94 Stat. 250, related to cross references.
EFFECTIVE DATE OF REPEAL
Repeal applicable to crude oil removed from the premises on or
after Aug. 23, 1988, see section 1941(c) of Pub. L. 100-418, set
out as an Effective Date of 1988 Amendment note under section 164
of this title.
AMENDMENTS RELATED TO CRUDE OIL WINDFALL PROFIT TAX ACT OF 1980
Pub. L. 100-647, title VI, Sec. 6254, Nov. 10, 1988, 102 Stat.
3753, repealed the reporting requirements of section 4997 of former
chapter 45 of this title and the related regulations thereunder,
effective only for crude oil removed after December 31, 1987, for
which no tax is due or withheld under former chapter 45.
-End-
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