I.R.C. § 962(a) General Rule —
Under regulations prescribed by the Secretary, in the case of a United States shareholder
who is an individual and who elects to have the provisions of this section apply
for the taxable year—
I.R.C. § 962(a)(1) —
the tax imposed under this chapter on amounts which are included in his gross income
under section 951(a) shall
(in lieu of the tax determined under sections 1 and 55)
be an amount equal to the tax which would be imposed under section 11 if such amounts were received by a domestic corporation, and
I.R.C. § 962(a)(2) —
for purposes of applying the provisions of section 960
(relating to foreign tax credit) such amounts shall be treated as if they were received
by a domestic corporation.
I.R.C. § 962(b) Election —
An election to have the provisions of this section apply for any taxable year shall
be made by a United States shareholder at such time and in such manner as the Secretary
shall prescribe by regulations. An election made for any taxable year may not be
revoked except with the consent of the Secretary.
I.R.C. § 962(c) Pro Ration Of Each Section 11 Bracket Amount —
For purposes of applying subsection (a)(1), the amount in each taxable income bracket
in the tax table in section 11(b) shall not exceed an amount which bears the same ratio to such bracket amount as
the amount included in the gross income of the United States shareholder under section
951(a) for the taxable year bears to such shareholder's pro rata share of the earnings
and profits for the taxable year of all controlled foreign corporations with respect
to which such shareholder includes any amount in gross income
under section 951(a).
I.R.C. § 962(d) Special Rule For Actual Distributions —
The earnings and profits of a foreign corporation attributable to amounts which
were included in the gross income of a United States shareholder under section 951(a) and with respect to which an election under this section applied shall, when such
earnings and profits are distributed, notwithstanding the provisions of section 959(a)(1), be included in gross income to the extent that such earnings and profits so distributed
exceed the amount of tax paid under this chapter on the amounts to which such election
applied.
(Added Pub. L. 87-834, 12(a), Oct. 16, 1962, 76 Stat. 1023, and amended Pub. L. 94-12, title III, 303(c)(3), Mar. 29, 1975, 89 Stat. 45; Pub. L. 94-164, 4(d)(1), Dec. 23, 1975, 89 Stat. 975; Pub. L. 94-455, title XIX, 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 95-600, title III, 301(b)(16), Nov. 6, 1978, 92 Stat. 2822; Pub. L. 100-647, title I, 1007(g)(11), Nov. 10, 1988, 102 Stat. 3435; Pub. L. 115-97, title I, Sec. 12001(b)(15), Dec. 22, 2017, 131 Stat. 2054.)
BACKGROUND NOTES
AMENDMENTS
2017—Subsec. (a)(1). Pub. L. 115-97, Sec. 12001(b)(15), amended par. (1) by substituting “section 11” for “sections 11 and 55”.
1988--Subsec. (a)(1). Pub. L. 100-647 substituted “sections 1 and 55” and “sections 11 and 55” for “section 1” and “section
11”, respectively.
1978--Subsec. (c). Pub. L. 95-600 substituted provisions relating to the pro ration of each section 11 bracket amount
for provisions relating to the surtax exemption.
1976--Subsecs. (a), (b). Pub. L. 94-455 struck out “or his delegate"
after “Secretary” wherever appearing.
1975--Subsec. (c). Pub. L. 94-164 substituted “same ratio to the surtax exemption” for “same ratio to $25,000” in subsec.
(c) as such subsec. (c) is in effect for taxable years ending after Dec. 31, 1975.
Pub. L. 94-12 substituted
“$50,000” for “$25,000”.
EFFECTIVE DATE OF 2017 AMENDMENT
Amendment by Pub. L. 115-97, Sec. 12001(b)(15), effective for taxable years beginning after December 31, 2017.
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 1978 AMENDMENT
Amendment by Pub. L. 95-600 applicable to taxable years beginning after Dec. 31, 1978, see section 301(c)
of Pub. L. 95-600, set out as a note under section 11 of this title.
EFFECTIVE AND TERMINATION DATES OF 1975 AMENDMENTS
Amendment by Pub. L. 94-164 applicable to taxable years beginning after Dec. 31, 1975, see section 4(e) of Pub. L. 94-164, set out as a note under section 11 of this title.
Amendment by Pub. L. 94-12 applicable to taxable years ending after Dec. 31, 1974, but to cease to apply for
taxable years ending after Dec. 31, 1975, see section 305(b)(1)
of Pub. L. 94-12, set out as a note under section 11 of this title.
[963. Repealed. Pub. L. 94-12, title VI, 602(a)(1), Mar. 29, 1975, 89 Stat. 58]
Section, added Pub. L. 87-834, 12(a), Oct. 16, 1962, 76 Stat. 1023, and amended Pub. L. 88-272, title I, 123(b), Feb. 26, 1964, 78 Stat. 29; Pub. L. 90-364, title I, 102(b), June 28, 1968, 82 Stat. 255; Pub. L. 91-53, 5(b), Aug. 7, 1969, 83 Stat. 95; Pub. L. 91-172, title VII, 701(b), Dec. 30, 1969, 83 Stat. 659, dealt with the receipt of minimum
distributions by domestic corporations.
Effective Date of Repeal
Repeal effective with respect to taxable years for foreign corporations beginning
after Dec. 31, 1975, and to taxable years of United States shareholders (within the
meaning of section 951(b) of this title) within which or with which such taxable years
of such foreign corporations end, see section 602(f) of Pub. L. 94-12, set out as an Effective Date note under section 955 of this title.
