General rule
Special rules
Section 303 redemption needs
The term “section 303 redemption needs” means, with respect to the taxable year of the corporation in which a shareholder of the corporation died or any taxable year thereafter, the amount needed (or reasonably anticipated to be needed) to make a redemption of stock included in the gross estate of the decedent (but not in excess of the maximum amount of stock to which section 303(a) may apply).
Excess business holdings redemption needs
Obligations incurred to make redemptions
In applying paragraphs (1) and (2), the discharge of any obligation incurred to make a redemption described in such paragraphs shall be treated as the making of such redemption.
Product liability loss reserves
The accumulation of reasonable amounts for the payment of reasonably anticipated product liability losses (as defined in section 172(f) (as in effect before the date of enactment of the Tax Cuts and Jobs Act)), as determined under regulations prescribed by the Secretary, shall be treated as accumulated for the reasonably anticipated needs of the business.
No inference as to prior taxable years
The application of this part to any taxable year before the first taxable year specified in paragraph (1) shall be made without regard to the fact that distributions in redemption coming within the terms of such paragraphs were subsequently made.
Aug. 16, 1954, ch. 73668A Stat. 182Pub. L. 91–172, title IX, § 906(a)83 Stat. 714Pub. L. 94–455, title XIX, § 1901(a)(75)90 Stat. 1777Pub. L. 95–600, title III, § 371(c)92 Stat. 2859Pub. L. 104–188, title I, § 1704(t)(33)110 Stat. 1889Pub. L. 115–97, title I, § 13302(c)(2)(B)131 Stat. 2123(, ; , , ; , , ; , , ; , , ; , , .)
Editorial Notes
References in Text
Pub. L. 115–97, title I, § 13302(c)(2)(A)131 Stat. 2122Section 172(f), referred to in subsec. (b)(4), was repealed by , , .
Pub. L. 115–97Pub. L. 115–97Pub. L. 115–97The date of the enactment of the Tax Cuts and Jobs Act, referred to in subsec. (b)(4), probably means the date of enactment of title I of , which was approved . Prior versions of the bill that was enacted into law as included such Short Title, but it was not enacted as part of title I of .
Amendments
Pub. L. 115–972017—Subsec. (b)(4). inserted “(as in effect before the date of enactment of the Tax Cuts and Jobs Act)” after “as defined in section 172(f)”.
Pub. L. 104–1881996—Subsec. (b)(4). substituted “section 172(f)” for “section 172(i)”.
Pub. L. 95–6001978—Subsec. (b)(4), (5). added par. (4) and redesignated former par. (4) as (5).
Pub. L. 94–455, § 1901(a)(75)(A)1976—Subsec. (b)(2). , struck out “with respect to taxable years of the corporation ending after ” after “ ‘redemption needs’ means”.
Pub. L. 94–455, § 1901(a)(75)(B)Subsec. (b)(4). , struck out “or (2)” after “paragraph (1)”.
Pub. L. 91–1721969— designated existing provisions as subsec. (a)(1) and added subsecs. (a)(2), (3) and (b).
Statutory Notes and Related Subsidiaries
Effective Date of 2017 Amendment
Pub. L. 115–97section 13302(e) of Pub. L. 115–97section 172 of this titleAmendment by applicable to net operating losses arising in taxable years beginning after , see , set out as a note under .
Effective Date of 1978 Amendment
Pub. L. 95–600section 371(d) of Pub. L. 95–600section 172 of this titleAmendment by applicable with respect to taxable years beginning after , see , set out as a note under .
Effective Date of 1976 Amendment
Pub. L. 94–455section 1901(d) of Pub. L. 94–455section 2 of this titleAmendment by applicable with respect to taxable years beginning after , see , set out as a note under .
Effective Date of 1969 Amendment
Pub. L. 91–172, title IX, § 906(b)83 Stat. 715Pub. L. 99–514, § 2100 Stat. 2095