
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC555]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                        Subtitle A--Income Taxes
 
                  CHAPTER 1--NORMAL TAXES AND SURTAXES
 
   Subchapter G--Corporations Used to Avoid Income Tax on Shareholders
 
              PART III--FOREIGN PERSONAL HOLDING COMPANIES
 
Sec. 555. Gross income of foreign personal holding companies


(a) General rule

    For purposes of this part, the term ``gross income'' means, with 
respect to a foreign corporation, gross income computed (without regard 
to the provisions of subchapter N (sec. 861 and following)) as if the 
foreign corporation were a domestic corporation which is a personal 
holding company.

(b) Additions to gross income

    In the case of a foreign personal holding company (whether or not a 
United States group, as defined in section 552(a)(2), existed with 
respect to such company on the last day of its taxable year) which was a 
shareholder in another foreign personal holding company on the day in 
the taxable year of the second company which was the last day on which a 
United States group existed with respect to the second company, there 
shall be included, as a dividend, in the gross income of the first 
company, for the taxable year in which or with which the taxable year of 
the second company ends, the amount the first company would have 
received as a dividend if on such last day there had been distributed by 
the second company, and received by the shareholders, an amount which 
bears the same ratio to the undistributed foreign personal holding 
company income of the second company for its taxable year as the portion 
of such taxable year up to and including such last day bears to the 
entire taxable year.

(c) Application of subsection (b)

    The rule provided in subsection (b)--
        (1) shall be applied in the case of a foreign personal holding 
    company for the purpose of determining its undistributed foreign 
    personal holding company income which, or a part of which, is to be 
    included in the gross income of its shareholders, whether United 
    States shareholders or other foreign personal holding companies;
        (2) shall be applied in the case of every foreign corporation 
    with respect to which a United States group exists on some day of 
    its taxable year, for the purpose of determining whether such 
    corporation meets the gross income requirements of section 
    552(a)(1).

(Aug. 16, 1954, ch. 736, 68A Stat. 196.)

                  Section Referred to in Other Sections

    This section is referred to in sections 551, 552, 556, 6035 of this 
title.
