
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: 26USC561]

 
                     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 IV--DEDUCTION FOR DIVIDENDS PAID
 
Sec. 561. Definition of deduction for dividends paid


(a) General rule

    The deduction for dividends paid shall be the sum of--
        (1) the dividends paid during the taxable year,
        (2) the consent dividends for the taxable year (determined under 
    section 565), and
        (3) in the case of a personal holding company, the dividend 
    carryover described in section 564.

(b) Special rules applicable

    In determining the deduction for dividends paid, the rules provided 
in section 562 (relating to rules applicable in determining dividends 
eligible for dividends paid deduction) and section 563 (relating to 
dividends paid after the close of the taxable year) shall be applicable.

(Aug. 16, 1954, ch. 736, 68A Stat. 198; Pub. L. 87-403, Sec. 3(f), Feb. 
2, 1962, 76 Stat. 8; Pub. L. 94-455, title XIX, Sec. 1901(b)(32)(H), 
Oct. 4, 1976, 90 Stat. 1800.)


                               Amendments

    1976--Subsec. (b). Pub. L. 94-455 redesignated existing provisions 
of par. (1) as subsec. (b) and struck out par. (2) relating to special 
adjustment on disposition of antitrust stock as a dividend.
    1962--Subsec. (b). Pub. L. 87-403 designated existing provisions as 
par. (1) and added par. (2).


                    Effective Date of 1976 Amendment

    Amendment by Pub. L. 94-455 applicable with respect to taxable years 
beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94-455, 
set out as a note under section 2 of this title.


                    Effective Date of 1962 Amendment

    Amendment by Pub. L. 87-403 applicable only with respect to 
distributions made after Feb. 2, 1962, see section 3(g) of Pub. L. 87-
403, set out as a note under section 312 of this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 162, 535, 545, 547, 556, 
564, 565, 852, 857, 860, 4981, 4982 of this title.
