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Internal Revenue Code, § 591. Deduction For Dividends Paid On Deposits

I.R.C. § 591(a) In General
In the case of mutual savings banks, cooperative banks, domestic building and loan associations, and other savings institutions chartered and supervised as savings and loan or similar associations under Federal or State law, there shall be allowed as deductions in computing taxable income amounts paid to, or credited to the accounts of, depositors or holders of accounts as dividends or interest on their deposits or withdrawable accounts, if such amounts paid or credited are withdrawable on demand subject only to customary notice of intention to withdraw.
I.R.C. § 591(b) Mutual Savings Bank To Include Certain Banks With Capital Stock
For purposes of this part, the term “mutual savings bank” includes any bank—
I.R.C. § 591(b)(1)
which has capital stock represented by shares, and
I.R.C. § 591(b)(2)
which is subject to, and operates under, Federal or State laws relating to mutual savings bank.
(Aug. 16, 1954, ch. 736, 68A Stat. 204; Oct. 16, 1962, Pub. L. 87-834, 6(f), 76 Stat. 984; Aug. 13, 1981, Pub. L. 97-34, title II, 245(a), 95 Stat. 255.)
BACKGROUND NOTES
Amendments to Part
1986—Pub. L. 99-514, title IX, 904(b)(2), (c)(2)(A), Oct. 22, 1986, 100 Stat. 2385, as amended by Pub. L. 100-647, title IV, 4012(a)(2), Nov. 10, 1988, 102 Stat. 3656, provided that, applicable to transfers after Dec. 31, 1989, in taxable years ending after that date, the analysis is amended by striking out item 597.
1981--Pub. L. 97-34, title II, 244(b), Aug. 13, 1981, 95 Stat. 255, added item 597.
1976--Pub. L. 94-455, title XIX, 1901(b)(19), Oct. 4, 1976, 90 Stat. 1796, struck out item 592 “Deduction for repayment of certain loans”.
1969--Pub. L. 91-172, title IV, 434(b)(2), Dec. 30, 1969, 83 Stat. 625, added item 596.
1962--Pub. L. 87-834, 6(d), Oct. 16, 1962, 76 Stat. 984, substituted “Reserves for losses on loans” for “Additions to reserve for bad debts” in item 593, and added item 595.
AMENDMENTS
1981--Pub. L. 97-34 designated existing provisions as subsec. (a), inserted heading “In general”, and added subsec. (b).
1962--Pub. L. 87-834 included other savings institutions chartered and supervised as savings and loan or similar associations under Federal or State law, and authorized amounts paid as interest as a deduction.
EFFECTIVE DATE OF 1981 AMENDMENT
Section 246(d) of Pub. L. 97-34 provided that: “The amendments made by section 245 [amending sections 591 and 593 of this title] shall apply with respect to taxable years ending after the date of the enactment of this Act [Aug. 13, 1981].”
[592. Repealed. Pub. L. 94-455, title XIX, 1901(a)(83), Oct. 4, 1976, 90 Stat. 1778]
Section, act Aug. 16, 1954, ch. 736, 68A Stat. 205, authorized a deduction by mutual savings banks for repayment of loans made before Sept. 1, 1951, by the United States or any agency or instrumentality thereof, or any mutual fund established under the authority of the laws of any State.
Effective Date of Repeal
Repeal effective with respect to taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94-455, set out as an Effective Date of 1976 Amendment note under section 2 of this title.