Title 26, Internal Revenue CodeRelease 119-102
§997 Special Subchapter C Rules
Title 26 › 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 IV — DOMESTIC INTERNATIONAL SALES CORPORATIONS › Subpart B — Treatment of Distributions to Shareholders › § 997
Summary
When a DISC or former DISC gives property to a corporation from taxed or accumulated DISC income, treat that transfer the same way as if the same dollar distribution were made to an individual, and the corporation’s tax basis in the property equals that same amount.
Full Legal Text
Title 26, §997
Internal Revenue Code, Source: USLM XML via OLRC
For purposes of applying the provisions of subchapter C of chapter 1, any distribution in property to a corporation by a DISC or former DISC which is made out of previously taxed income or accumulated DISC income shall—
(1)be treated as a distribution in the same amount as if such distribution of property were made to an individual, and
(2)have a basis, in the hands of the recipient corporation, equal to the amount determined under paragraph (1).
Reference
Citations & Metadata
Citation
26 U.S.C. § 997
Title 26, Internal Revenue Code
Last Updated
Aug 21, 2026
Release point: 119-102