{"identifier":"/us/usc/t26/s898","title":26,"num":"\u00a7\u202f898.","heading":"Taxable year of certain foreign corporations","text":"\u00a7\u202f898.\nTaxable year of certain foreign corporations\n(a)\nGeneral rule\nFor purposes of this title, the taxable year of any specified foreign corporation shall be the required year determined under subsection (c).\n(b)\nSpecified foreign corporation\nFor purposes of this section\u2014\n(1)\nIn general\nThe term \u201cspecified foreign corporation\u201d means any foreign corporation\u2014\n(A) which is treated as a controlled foreign corporation for any purpose under subpart F of part III of this subchapter, and\n(B) with respect to which the ownership requirements of paragraph (2) are met.\n(2)\nOwnership requirements\n(A)\nIn general\nThe ownership requirements of this paragraph are met with respect to any foreign corporation if a United States shareholder owns, on each testing day, more than 50 percent of\u2014\n(i) the total voting power of all classes of stock of such corporation entitled to vote, or\n(ii) the total value of all classes of stock of such corporation.\n(B)\nOwnership\nFor purposes of subparagraph (A), the rules of subsections (a) and (b) of section 958 shall apply in determining ownership.\n(3)\nUnited States shareholder\nThe term \u201cUnited States shareholder\u201d has the meaning given to such term by section 951(b), except that, in the case of a foreign corporation having related person insurance income (as defined in section 953(c)(2)), the Secretary may treat any person as a United States shareholder for purposes of this section if such person is treated as a United States shareholder under section 953(c)(1).\n(c)\nDetermination of required year\n(1)\nIn general\nThe required year is\u2014\n(A) the majority U.S. shareholder year, or\n(B) if there is no majority U.S. shareholder year, the taxable year prescribed under regulations.\n(2)\nMajority U.S. shareholder year\n(A)\nIn general\nFor purposes of this subsection, the term \u201cmajority U.S. shareholder year\u201d means the taxable year (if any) which, on each testing day, constituted the taxable year of\u2014\n(i) each United States shareholder described in subsection (b)(2)(A), and\n(ii) each United States shareholder not described in clause (i) whose stock was treated as owned under subsection (b)(2)(B) by any shareholder described in such clause.\n(B)\nTesting day\nThe testing days shall be\u2014\n(i) the first day of the corporation\u2019s taxable year (determined without regard to this section), or\n(ii) the days during such representative period as the Secretary may prescribe.","url":"https://projectusc.org/usc/t26/s898.html","content":[{"t":"sec","id":"/us/usc/t26/s898","children":[{"t":"num","text":"\u00a7\u202f898."},{"t":"heading","text":"Taxable year of certain foreign corporations"},{"t":"subsec","id":"/us/usc/t26/s898/a","children":[{"t":"num","text":"(a)"},{"t":"heading","text":"General rule"},{"t":"content","children":[{"t":"p","text":"For purposes of this title, the taxable year of any specified foreign corporation shall be the required year determined under subsection (c).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s898/b","children":[{"t":"num","text":"(b)"},{"t":"heading","text":"Specified foreign corporation"},{"t":"chapeau","text":"For purposes of this section\u2014"},{"t":"para","id":"/us/usc/t26/s898/b/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"The term \u201cspecified foreign corporation\u201d means any foreign corporation\u2014"},{"t":"subpara","id":"/us/usc/t26/s898/b/1/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" which is treated as a controlled foreign corporation for any purpose under subpart F of part III of this subchapter, and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s898/b/1/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" with respect to which the ownership requirements of paragraph (2) are met.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s898/b/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Ownership requirements"},{"t":"subpara","id":"/us/usc/t26/s898/b/2/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"The ownership requirements of this paragraph are met with respect to any foreign corporation if a United States shareholder owns, on each testing day, more than 50 percent of\u2014"},{"t":"clause","id":"/us/usc/t26/s898/b/2/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" the total voting power of all classes of stock of such corporation entitled to vote, or","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s898/b/2/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" the total value of all classes of stock of such corporation.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s898/b/2/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Ownership"},{"t":"content","children":[{"t":"p","text":"For purposes of subparagraph (A), the rules of subsections (a) and (b) of section 958 shall apply in determining ownership.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s898/b/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"United States shareholder"},{"t":"content","children":[{"t":"p","text":"The term \u201cUnited States shareholder\u201d has the meaning given to such term by section 951(b), except that, in the case of a foreign corporation having related person insurance income (as defined in section 953(c)(2)), the Secretary may treat any person as a United States shareholder for purposes of this section if such person is treated as a United States shareholder under section 953(c)(1).","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s898/c","children":[{"t":"num","text":"(c)"},{"t":"heading","text":"Determination of required year"},{"t":"para","id":"/us/usc/t26/s898/c/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"The required year is\u2014"},{"t":"subpara","id":"/us/usc/t26/s898/c/1/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" the majority U.S. shareholder year, or","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s898/c/1/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" if there is no majority U.S. shareholder year, the taxable year prescribed under regulations.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s898/c/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Majority U.S. shareholder year"},{"t":"subpara","id":"/us/usc/t26/s898/c/2/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"For purposes of this subsection, the term \u201cmajority U.S. shareholder year\u201d means the taxable year (if any) which, on each testing day, constituted the taxable year of\u2014"},{"t":"clause","id":"/us/usc/t26/s898/c/2/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" each United States shareholder described in subsection (b)(2)(A), and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s898/c/2/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" each United States shareholder not described in clause (i) whose stock was treated as owned under subsection (b)(2)(B) by any shareholder described in such clause.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s898/c/2/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Testing day"},{"t":"chapeau","text":"The testing days shall be\u2014"},{"t":"clause","id":"/us/usc/t26/s898/c/2/B/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" the first day of the corporation\u2019s taxable year (determined without regard to this section), or","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s898/c/2/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" the days during such representative period as the Secretary may prescribe.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"text","text":"\n"},{"t":"text","text":"\n"}]}]}