§1620 Taxation

Summary

Money that comes from the Alaska Native Fund and is paid out as dividends to a Regional Corporation, a Village Corporation, or an individual Native must not be taxed by the federal government, the state, or local governments when it is received. The rule does not cover income earned later from investing that money. Getting shares of stock in a Regional or Village Corporation is also not taxed. Getting land or cash to make land trades fair is not taxed when received. If the land is later sold, the gain or loss is figured from the fair market value when the land was given, adjusted as tax law allows (see section 1016 of Title 26). If the land has a mine, well, timber, or similar resource, the tax basis for that part cannot be less than its fair value when it was first commercially developed, adjusted as allowed. Land given under this law that is not developed, leased to others, or is used only for exploration is free from state and local property taxes for 20 years from the time title vests or from the date of an interim conveyance or patent, whichever comes first. Parts of the land that are leased or developed can be taxed. Easements, rights-of-way, and leaseholds can be taxed. Land received in exchange for exempt land usually keeps the same tax protection when exchanged with the federal or state government, a municipality, or another Native Corporation (or with a private party if cash paid in the deal is no more than 25%). Such lands count as public land for some federal highway and other programs and get U.S. wildland fire protection at no cost if they do not produce substantial revenue. Regional and Village stock was excluded from estate tax until January 1, 1992. Resource studies, certain technical services, and the money or equipment used to make them are not counted as taxable income to a Native Corporation (except money paid directly to the Native Corporation or its subsidiary). Native Corporations are treated as doing business from the date they are formed, and land-selection expenses count as normal business expenses. Corporations under this law were not treated as personal holding companies before January 1, 1992. When a corporation gives a homesite to a shareholder under a homesite program, the gift is treated as coming under this law if stock transfer rules still allow it, the lot is limited to single-family use for at least 10 years, is no more than 1.5 acres, and other reasonable covenants are applied. If the shareholder later divides the lot, they must pay the taxes that would have been owed plus simple interest at 6% per year from the date they got the homesite, including any assessments for road, water, or sewage.