# 26 U.S.C. § 591: Deduction for dividends paid on deposits

Source: OLRC release point 119-134 <https://uscode.house.gov/us/usc/119-134/t26/s591>. Cite pinpoints as 26 U.S.C. § 591(a)(1).

## § 591(a) In general

In the case of mutual savings banks, cooperative banks, domestic building and loan associations, and other savings institutions chartered and supervised as savings and loan or similar associations under Federal or State law, there shall be allowed as deductions in computing taxable income amounts paid to, or credited to the accounts of, depositors or holders of accounts as dividends or interest on their deposits or withdrawable accounts, if such amounts paid or credited are withdrawable on demand subject only to customary notice of intention to withdraw.

## § 591(b) Mutual savings bank to include certain banks with capital stock

For purposes of this part, the term “mutual savings bank” includes any bank—

**§ 591(b)(1)** which has capital stock represented by shares, and

**§ 591(b)(2)** which is subject to, and operates under, Federal or State laws relating to mutual savings bank.

## Regulations

- [Treas. Reg. § 1.591-1](/26/reg/1.591-1.md): Deduction for dividends paid on deposits. (interprets § 591)

## Leading cases

- [Hudson City Sav. Bank v. Commissioner, 53 T.C. 70 (1969)](https://www.courtlistener.com/opinion/4702811/hudson-city-sav-bank-v-commissioner/)
- [Midwest Sav. Asso. v. Commissioner, 75 T.C. 262 (1980)](https://www.courtlistener.com/opinion/4705270/midwest-sav-asso-v-commissioner/)
- [Southern California Sav. & Loan Ass'n v. Commissioner, 95 T.C. 35 (1990)](https://www.courtlistener.com/opinion/4707084/southern-california-sav-loan-assn-v-commissioner/)

## Connections

Cites: none

Cited by: § 1 Tax imposed; § 165 Losses; § 243 Dividends received by corporations; § 465 Deductions limited to amount at risk; § 501 Exemption from tax on corporations, certain trusts, etc.; § 582 Bad debts, losses, and gains with respect to securities held by financial institutions; § 593 Reserves for losses on loans; § 871 Tax on nonresident alien individuals

Derived from: 1939 § 23(r)

## Amendments

- 1954-08-16: [Act Aug. 16, 1954, ch. 736](/26/act/1954-ch736.md), 68A Stat. 204
- 1962-10-16: [Pub. L. 87-834](/26/act/87-834.md), 76 Stat. 984
- 1981-08-13: [Pub. L. 97-34](/26/act/97-34.md), 95 Stat. 255