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HOMETAX NOTES RESEARCHFEDERALINTERNAL REVENUE CODE OF 1986

Sec. 926 Distributions to shareholders

  • Internal Revenue Code of 1986
  • SUBTITLE A -- INCOME TAXES
  • Chapter 1 -- Normal Taxes and Surtaxes
  • Subchapter N -- Tax Based on Income from Sources Within or Without the United States
  • Part III -- Income from sources without the United States
  • Subpart C -- Taxation of foreign sales corporations - Repealed

(a) Distributions made first out of foreign trade income. For purposes of this title, any distribution to a shareholder of a FSC by such FSC which is made out of earnings and profits shall be treated as made--

(1) first, out of earnings and profits attributable to foreign trade income, to the extent thereof, and

(2) then, out of any other earnings and profits.

(b) Distributions by FSC to nonresident aliens and foreign corporations treated as United States connected. For purposes of this title, any distribution by a FSC which is made out of earnings and profits attributable to foreign trade income to any shareholder of such corporation which is a foreign corporation or a nonresident alien individual shall be treated as a distribution--

(1) which is effectively connected with the conduct of a trade or business conducted through a permanent establishment of such shareholder within the United States, and

(2) of income which is derived from sources within the United States.

(c) FSC includes former FSC. For purposes of this section, the term "FSC" includes a former FSC.

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