26 U.S.C. § 597: Treatment of transactions in which Federal financial assistance provided

§ 1.597-1 Definitions.§ 1.597-2 Taxation of FFA.§ 1.597-3 Other rules.§ 1.597-4 Bridge Banks and Agency Control.§ 1.597-5 Taxable Transfers.§ 1.597-6 Limitation on collection of federal income tax.§ 1.597-7 Effective/applicability dates.§ 1.597-8 Transitional rules for Federal financial assistance.

Amended 1986, 1988, 1989

1989 Pub. L. 101-73 Pub. L. 101–73, § 1401(b)(1), repealed amendment made by Pub. L. 99–514, § 904(b)(1), see 1986 Amendment note below.
1989 Pub. L. 101-73 Pub. L. 101–73, § 1401(a)(3)(A), amended section generally, substituting present provisions for former provisions which contained section catchline that read “FSLIC or FDIC financial assistance” and which provided: in subsec. (a) for an exclusion from gross income; in subsec. (b) for no reduction in basis of assets; in subsec. (c) for a reduction of tax attributes by 50 percent of amounts excludable under subsection (a); and in subsec. (d) for a definition of “domestic building and loan association”.
1988 Pub. L. 100-647 Pub. L. 100–647, § 4012(b)(2)(D)(i), substituted “FSLIC or FDIC” for “FSLIC” in section catchline.
1986 Pub. L. 99-514 Pub. L. 99–514, § 904(b)(1), (c)(2)(A), as amended by Pub. L. 100–647, title IV, § 4012(a)(2), which (applicable to transfers after Dec. 31, 1989, in taxable years ending after such date, with exceptions) directed repeal of this section, was repealed by Pub. L. 101–73, § 1401(b)(1), (c)(4), eff. Oct. 22, 1986, and I.R.C. of 1986 applicable as if the amendments made by such section had not been enacted.

Cases: Washington Mutual Inc. ex rel. H.F. Ahmanson & Co. v. United States, 636 F.3d 1207 (9th Cir. 2011); Citigroup, Inc. v. United States (Fed. Cl. 2018)

Forms: Form 1120

Final rules 1

(a) General rule The treatment for purposes of this chapter of any transaction in which Federal financial assistance is provided with respect to a bank or domestic building and loan association shall be determined under regulations prescribed by the Secretary.

Amended 1988

1988 Pub. L. 100-647 Pub. L. 100–647, § 4012(b)(2)(A), inserted at end “Gross income of a bank does not include any amount of money or other property received from the Federal Deposit Insurance Corporation pursuant to sections 13(c), 15(c)(1), and 15(c)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1821(f) and 1823(c)(1) and (c)(2)), regardless of whether any note or other instrument is issued in exchange therefor.”

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(b) Principles used in prescribing regulations

Amended 1988

1988 Pub. L. 100-647 Pub. L. 100–647, § 4012(b)(2)(C), substituted “association or bank” for “association”.

(1) Treatment of taxable asset acquisitions In the case of any acquisition of assets to which section 381(a) does not apply, the regulations prescribed under subsection (a) shall—

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(A) provide that Federal financial assistance shall be properly taken into account by the institution from which the assets were acquired, and

(B) provide the proper method of allocating basis among the assets so acquired (including rights to receive Federal financial assistance).

(2) Other transactions In the case of any transaction not described in paragraph (1), the regulations prescribed under subsection (a) shall provide for the proper treatment of Federal financial assistance and appropriate adjustments to basis or other tax attributes in connection with such assistance.

Amended 1989

1989 Pub. L. 101-239 Pub. L. 101–239 substituted “in connection with such assistance” for “to reflect such treatment”.

(3) Denial of double benefit No regulations prescribed under this section shall permit the utilization of any deduction (or other tax benefit) if such amount was in effect reimbursed by nontaxable Federal financial assistance.

Amended 1988, 1990

1990 Pub. L. 101-508 Pub. L. 101–508 substituted “For purposes of” for “The purposes of”.
1988 Pub. L. 100-647 Pub. L. 100–647, § 4012(c)(1), added subsec. (c).

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(1) any money or other property provided with respect to a domestic building and loan association by the Federal Savings and Loan Insurance Corporation or the Resolution Trust Corporation pursuant to section 406(f) of the National Housing Act (or under any other similar provision of law), and

Amended 2018

2018 Pub. L. 115-141 Pub. L. 115–141 struck out “or section 21A of the Federal Home Loan Bank Act” after “National Housing Act”.

(2) any money or other property provided with respect to a bank or domestic building and loan association by the Federal Deposit Insurance Corporation pursuant to section 11(f) or 13(c) of the Federal Deposit Insurance Act (or under any other similar provision of law),

regardless of whether any note or other instrument is issued in exchange therefor.

(d) Domestic building and loan association For purposes of this section, the term “domestic building and loan association” has the meaning given such term by section 7701(a)(19) without regard to subparagraph (C) thereof.

Amended 1988

1988 Pub. L. 100-647 Pub. L. 100–647, § 4012(b)(2)(B), which directed amendment of section 597(b), as amended by section 4012(c)(1) of Pub. L. 100–647, by adding at the end thereof subsec. (d), was executed by adding subsec. (d) at the end of section 597, as amended by section 4012(c)(1) of Pub. L. 100–647, as the probable intent of Congress.