# 26 U.S.C. § 898: Taxable year of certain foreign corporations

Source: OLRC release point 119-134 <https://uscode.house.gov/us/usc/119-134/t26/s898>. Cite pinpoints as 26 U.S.C. § 898(a)(1).

## § 898(a) General rule

For purposes of this title, the taxable year of any specified foreign corporation shall be the required year determined under subsection (c).

## § 898(b) Specified foreign corporation

For purposes of this section—

**§ 898(b)(1) In general.** The term “specified foreign corporation” means any foreign corporation—

**§ 898(b)(1)(A)** which is treated as a controlled foreign corporation for any purpose under subpart F of part III of this subchapter, and

**§ 898(b)(1)(B)** with respect to which the ownership requirements of paragraph (2) are met.

**§ 898(b)(2) Ownership requirements.**

**§ 898(b)(2)(A) In general.** The ownership requirements of this paragraph are met with respect to any foreign corporation if a United States shareholder owns, on each testing day, more than 50 percent of—

**§ 898(b)(2)(A)(i)** the total voting power of all classes of stock of such corporation entitled to vote, or

**§ 898(b)(2)(A)(ii)** the total value of all classes of stock of such corporation.

**§ 898(b)(2)(B) Ownership.** For purposes of subparagraph (A), the rules of subsections (a) and (b) of section 958 shall apply in determining ownership.

**§ 898(b)(3) United States shareholder.** The term “United States shareholder” has the meaning given to such term by section 951(b), except that, in the case of a foreign corporation having related person insurance income (as defined in section 953(c)(2)), the Secretary may treat any person as a United States shareholder for purposes of this section if such person is treated as a United States shareholder under section 953(c)(1).

## § 898(c) Determination of required year

**§ 898(c)(1) In general.** The required year is—

**§ 898(c)(1)(A)** the majority U.S. shareholder year, or

**§ 898(c)(1)(B)** if there is no majority U.S. shareholder year, the taxable year prescribed under regulations.

**§ 898(c)(2) Majority U.S. shareholder year.**

**§ 898(c)(2)(A) In general.** For purposes of this subsection, the term “majority U.S. shareholder year” means the taxable year (if any) which, on each testing day, constituted the taxable year of—

**§ 898(c)(2)(A)(i)** each United States shareholder described in subsection (b)(2)(A), and

**§ 898(c)(2)(A)(ii)** each United States shareholder not described in clause (i) whose stock was treated as owned under subsection (b)(2)(B) by any shareholder described in such clause.

**§ 898(c)(2)(B) Testing day.** The testing days shall be—

**§ 898(c)(2)(B)(i)** the first day of the corporation’s taxable year (determined without regard to this section), or

**§ 898(c)(2)(B)(ii)** the days during such representative period as the Secretary may prescribe.

## Proposed regulations (not in force)

- [Prop. Treas. Reg. § 1.898-4](/26/prop/1.898-4_01-13536.md): Special rules. (REG-106917-99, proposed 2001-06-13)
- [Prop. Treas. Reg. § 1.898(c)-1](/26/prop/1.898(c)-1_2026-15614.md): Allocation of foreign income taxes of specified foreign corporations affected by the repeal of section 898(c)(2). (REG-115145-25, proposed 2026-08-03)

## Connections

Cites: § 951 Amounts included in gross income of United States shareholders; § 953 Insurance income; § 958 Rules for determining stock ownership

Cited by: § 6038 Information reporting with respect to certain foreign corporations and partnerships

## Amendments

- 1989-12-19: [Pub. L. 101-239](/26/act/101-239.md), 103 Stat. 2355
- 2004-10-22: [Pub. L. 108-357](/26/act/108-357.md), 118 Stat. 1507
- 2025-07-04: [Pub. L. 119-21](/26/act/119-21.md), 139 Stat. 208