Editor's Note:
Pub. L. 108-357, Sec. 413(a)(1), repealed Sec. 552, effective for taxable years of foreign corporations beginning
after December 31, 2004, and to taxable years of United States shareholders with
or within which such taxable years of foreign corporations end.
I.R.C. § 552(a) General Rule —
Editor's Note:
Pub. L. 108-357, Sec. 413(a)(1), repealed Sec. 552, effective for taxable years of foreign corporations beginning
after December 31, 2004, and to taxable years of United States shareholders with or
within which such taxable years of foreign corporations end.
For purposes of this subtitle, the term “foreign personal holding company” means
any foreign corporation if—
I.R.C. § 552(a)(1) Gross Income Requirement —
Editor's Note:
Pub. L. 108-357, Sec. 413(a)(1), repealed Sec. 552, effective for taxable years of foreign corporations beginning
after December 31, 2004, and to taxable years of United States shareholders with or
within which such taxable years of foreign corporations end.
At least 60 percent of its gross income (as defined in section 555(a))
for the taxable year is foreign personal holding company income as defined in section
553;
but if the corporation is a foreign personal holding company with respect to any
taxable year ending after August 26, 1937, then, for each subsequent taxable year,
the minimum percentage shall be 50 percent in lieu of 60 percent, until a taxable
year during the whole of which the stock ownership required by paragraph (2) does
not exist, or until the expiration of three consecutive taxable years in each of
which less than 50 percent of the gross income is foreign personal holding company
income. For purposes of this paragraph, there shall be included in the gross income
the amount includible therein as a
dividend by reason of the application of section 555(c)(2); and
I.R.C. § 552(a)(2) Stock Ownership Requirement —
Editor's Note:
Pub. L. 108-357, Sec. 413(a)(1), repealed Sec. 552, effective for taxable years of foreign corporations beginning
after December 31, 2004, and to taxable years of United States shareholders with or
within which such taxable years of foreign corporations end.
At any time during the taxable year more than 50 percent of—
I.R.C. § 552(a)(2)(A) —
the total combined voting power of all classes of stock of such corporation entitled
to vote, or
I.R.C. § 552(a)(2)(B) —
the total value of the stock of such corporation, is owned (directly or indirectly)
by or for not more than 5 individuals who are citizens or residents of the United
States
(hereinafter in this part referred to as the “United States group”).
I.R.C. § 552(b) Exceptions —
Editor's Note:
Pub. L. 108-357, Sec. 413(a)(1), repealed Sec. 552, effective for taxable years of foreign corporations beginning
after December 31, 2004, and to taxable years of United States shareholders with or
within which such taxable years of foreign corporations end.
The term “foreign personal holding company” does not include—
I.R.C. § 552(b)(1) —
a corporation exempt from tax under subchapter F (sec. 501 and following); and
I.R.C. § 552(b)(2) —
a corporation organized and doing business under the banking and credit laws of
a foreign country if it is established
(annually or at other periodic intervals) to the satisfaction of the Secretary that
such corporation is not formed or availed of for the purpose of evading or avoiding
United States income taxes which would otherwise be imposed upon its shareholders.
If the Secretary is satisfied that such corporation is not so formed or availed of,
he shall issue to such corporation annually or at other periodic intervals a certification
that the corporation is not a foreign personal holding company.
Each United States shareholder of a foreign corporation
which would, except for the provisions of paragraph (2), be a foreign
personal holding company, shall attach to and file with his income tax return for
the taxable year a copy of the certification by the Secretary made pursuant to paragraph
(2). Such copy shall be filed with the taxpayer's return for the taxable year if
he has been a shareholder of such corporation for any part of such year.
I.R.C. § 552(c) Look-Thru For Certain Dividends And Interest
I.R.C. § 552(c)(1) In General —
Editor's Note:
Pub. L. 108-357, Sec. 413(a)(1), repealed Sec. 552, effective for taxable years of foreign corporations beginning
after December 31, 2004, and to taxable years of United States shareholders with or
within which such taxable years of foreign corporations end.
For purposes of this part, any related person dividend or interest shall be treated
as foreign personal holding company income only to the extent such dividend or interest
is attributable (determined under rules similar to the rules of subparagraphs
(C) and (D) of section 904(d)(3))
to income of the related person which would be foreign personal holding company income.
I.R.C. § 552(c)(2) Related Person Dividend Or Interest —
Editor's Note:
Pub. L. 108-357, Sec. 413(a)(1), repealed Sec. 552, effective for taxable years of foreign corporations beginning
after December 31, 2004, and to taxable years of United States shareholders with or
within which such taxable years of foreign corporations end.
For purposes of paragraph (1), the term “related person dividend or interest” means
any dividend or interest which—
I.R.C. § 552(c)(2)(A) —
is described in subparagraph (A) of section 954(c)(3), and
I.R.C. § 552(c)(2)(B) —
is received from a related person which is not a foreign personal holding company
(determined without regard to this subsection).
For purposes of the preceding sentence, the term “related person” has the meaning
given such term by section 954(d)(3) (determined by substituting “foreign personal holding company” for “controlled
foreign corporation” each place it appears).
(Aug. 16, 1954, ch. 736, 68A Stat. 195; Oct. 4, 1976,
Pub. L. 94-455, title XIX, 1906(b)(13)(A), 90 Stat. 1834; July 18, 1984, Pub. L. 98-369, div. A, title I, 132(c)(2), 98 Stat. 666; Oct. 22, 1986, Pub. L. 99-514, title XII, 1222(b), title XVIII, 1810(h)(1), 100 Stat. 2557, 2829; Nov. 10, 1988,
Pub. L. 100-647, title I, 1012(bb)(1)(C), 102 Stat. 3533; Repealed by Pub. L. 108-357, title IV. Sec. 413(a)(1), Oct. 22, 2004, 118 Stat. 1418.)
BACKGROUND NOTES
AMENDMENTS
2004 - Sec. 552. Pub. L. 108-357, Sec. 413(a)(1), repealed Sec. 552.
1988--Subsec. (c). Pub. L. 100-647 substituted “Look-thru for certain dividends and interest” for “Certain dividends
and interest not taken into account” in heading and amended text generally. Prior
to amendment, text read as follows: “For purposes of subsection (a)(1)
and section 553(a)(1), gross income and foreign personal holding company income shall
not include any dividends and interest which--
“(1) are described in subparagraph
(A) of section 954(c)(4), and
“(2) are received from a related person which is not a foreign personal holding company
(determined without regard to this subsection).
For purposes of the preceding sentence, the term
‘related person’ has the meaning given such term by section 954(d)(3)
(determined by substituting ‘foreign personal holding company’ for
‘controlled foreign corporation’ each place it appears).”
1986--Subsec. (a)(2). Pub. L. 99-514, 1222(b), amended par. (2) generally. Prior to amendment, par. (2) read as follows:
“At any time during the taxable year more than 50 percent in value of its outstanding
stock is owned, directly or indirectly, by or for not more than five individuals who
are citizens or residents of the United States, hereinafter called
‘United States group’.”
Subsec. (c). Pub. L. 99-514, 1810(h)(1), inserted provision relating to meaning of “related person"
as given by section 954(d)(3).
1984--Subsec. (c). Pub. L. 98-369 added subsec. (c).
1976--Subsec. (b). Pub. L. 94-455 struck out “or his delegate"
after “Secretary” in three places.
EFFECTIVE DATE OF REPEAL
Repeal by Pub. L. 108-357, Sec. 413(a)(1), effective for taxable years of foreign corporations beginning after December
31, 2004, and to taxable years of United States shareholders with or within which
such taxable years of foreign corporations end.
EFFECTIVE DATE OF 1988 AMENDMENT
Amendment by Pub. L. 100-647 applicable to taxable years of foreign corporations beginning after Dec. 31, 1986,
see section 1012(bb)(1)(D) of Pub. L. 100-647, set out as a note under section 551 of this title.
EFFECTIVE DATE OF 1986 AMENDMENT
Section 1222(c) of Pub. L. 99-514 provided that:
“(1) In general.--The amendments made by this section
[amending sections 552 and 957 of this title] shall apply to taxable years of foreign
corporations beginning after December 31, 1986; except that for purposes of applying
sections 951(a)(1)(B) and 956 of the Internal Revenue Code of 1986, such amendments shall take effect on August 16, 1986.
“(2) Transitional rule.--In the case of any corporation treated as a controlled foreign
corporation by reason of the amendments made by this section, property acquired before
August 16, 1986, shall not be taken into account under section 956(b) of the Internal Revenue Code of 1986.
“(3) Special rule for beneficiary of trust.--In the case of an individual--
“(A) who is a beneficiary of a trust which was established on December 7, 1979, under
the laws of a foreign jurisdiction, and
“(B) who was not a citizen or resident of the United States on the date the trust
was established, amounts which are included in the gross income of such beneficiary
under section 951(a) of the Internal Revenue Code of 1986 with respect to stock held by the trust (and treated as distributed to the
trust) shall be treated as the first amounts which are distributed by the trust to
such beneficiary and as amounts to which section 959(a) of such Code applies.”
Amendment by section 1810(h)(1) of Pub. L. 99-514 effective, except as otherwise provided, as if included in the provisions of the
Tax Reform Act of 1984, Pub. L. 98-369, div. A, to which such amendment relates, see section 1881 of Pub. L. 99-514, set out as a note under section 48 of this title.
EFFECTIVE DATE OF 1984 AMENDMENT
Section 132(d)(2)(B) of Pub. L. 98-369 provided that: “The amendment made by paragraph
(2) of subsection (c) [amending this section] shall apply to taxable years of foreign
corporations beginning after March 15, 1984.”
