# 26 U.S.C. § 597: Treatment of transactions in which Federal financial assistance provided Source: OLRC release point 119-134 . Cite pinpoints as 26 U.S.C. § 597(a)(1). ## § 597(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. ## § 597(b) Principles used in prescribing regulations **§ 597(b)(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— **§ 597(b)(1)(A)** provide that Federal financial assistance shall be properly taken into account by the institution from which the assets were acquired, and **§ 597(b)(1)(B)** provide the proper method of allocating basis among the assets so acquired (including rights to receive Federal financial assistance). **§ 597(b)(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. **§ 597(b)(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. ## § 597(c) Federal financial assistance For purposes of this section, the term “Federal financial assistance” means— **§ 597(c)(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 **§ 597(c)(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. ## § 597(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. ## Regulations - [Treas. Reg. § 1.597-1](/26/reg/1.597-1.md): Definitions. (interprets § 597) - [Treas. Reg. § 1.597-2](/26/reg/1.597-2.md): Taxation of FFA. (interprets § 597) - [Treas. Reg. § 1.597-3](/26/reg/1.597-3.md): Other rules. (interprets § 597) - [Treas. Reg. § 1.597-4](/26/reg/1.597-4.md): Bridge Banks and Agency Control. (interprets § 597) - [Treas. Reg. § 1.597-5](/26/reg/1.597-5.md): Taxable Transfers. (interprets § 597) - [Treas. Reg. § 1.597-6](/26/reg/1.597-6.md): Limitation on collection of federal income tax. (interprets § 597) - [Treas. Reg. § 1.597-7](/26/reg/1.597-7.md): Effective/applicability dates. (interprets § 597) - [Treas. Reg. § 1.597-8](/26/reg/1.597-8.md): Transitional rules for Federal financial assistance. (interprets § 597) ## Forms named in the regulations - [Form 1120](https://www.irs.gov/pub/irs-pdf/f1120.pdf) ## Final rules - [82 FR 48618](https://www.federalregister.gov/documents/2017/10/19/2017-21129/treatment-of-transactions-in-which-federal-financial-assistance-is-provided) (2017): Treatment of Transactions in Which Federal Financial Assistance Is Provided ## Leading cases - [Washington Mutual Inc. ex rel. H.F. Ahmanson & Co. v. United States, 636 F.3d 1207 (9th Cir. 2011)](https://www.courtlistener.com/opinion/8619464/washington-mutual-inc-ex-rel-hf-ahmanson-co-v-united-states/) - [Citigroup, Inc. v. United States (Fed. Cl. 2018)](https://www.courtlistener.com/opinion/4547015/citigroup-inc-v-united-states/) ## Connections Cites: § 381 Carryovers in certain corporate acquisitions; § 7701 Definitions Cited by: § 593 Reserves for losses on loans ## Amendments - 1981-08-13: [Pub. L. 97-34](/26/act/97-34.md), 95 Stat. 255 - 1986-10-22: [Pub. L. 99-514](/26/act/99-514.md), 100 Stat. 2385 - 1988-11-10: [Pub. L. 100-647](/26/act/100-647.md), 102 Stat. 3657 - 1989-08-09: [Pub. L. 101-73](/26/act/101-73.md), 103 Stat. 548 - 1989-12-19: [Pub. L. 101-239](/26/act/101-239.md), 103 Stat. 2429 - 1990-11-05: [Pub. L. 101-508](/26/act/101-508.md), 104 Stat. 1388 - 2018-03-23: [Pub. L. 115-141](/26/act/115-141.md), 132 Stat. 1203