# Pub. L. 87-834: changes to the Internal Revenue Code 1962-10-16, 76 Stat. 962. Source: . ## Legislative history - Bill: [H.R. 10650](https://www.congress.gov/bill/87th-congress/house-bill/10650) ## § 37: Overpayments of tax ## § 46: Amount of credit - Enacted 26 U.S.C. § 46. ## § 47: Rehabilitation credit - Enacted 26 U.S.C. § 47. ## § 48: Energy credit - Enacted 26 U.S.C. § 48. ## § 72: Annuities; certain proceeds of endowment and life insurance contracts - § 72(f): Pub. L. 87–834 inserted sentence providing that par. (2) shall not apply to amounts which were contributed by the employer after Dec. 31, 1962, and which would not have been includible in the gross income of the employee by reason of the application of Section 911 if such amounts had been paid directly to the employee at the time of contribution, and making such sentence inapplicable to amounts which were contributed by the employer, as determined under regulations, to provide pension or annuity credits, to the extent such credits are attributable to services performed before Jan. 1, 1963, and are provided pursuant to pension or annuity plan provisions in existence on Mar. 12, 1962, and on that date applicable to such services. ## § 78: Gross up for deemed paid foreign tax credit - Enacted 26 U.S.C. § 78. ## § 162: Trade or business expenses - § 162(a)(2): Pub. L. 87–834, § 4(b), substituted “(including amounts expended for meals and lodging other than amounts which are lavish or extravagant under the circumstances)” for “including the entire amount expended for meals and lodging)”. - § 162(e), § 162(f): Pub. L. 87–834, § 3(a), added subsec. (e) and redesignated former subsec. (e) as (f). ## § 167: Depreciation - § 167(e): Pub. L. 87–834, § 13(b), designated existing provisions as par. (1) and added par. (2). - § 167(f), § 167(g), § 167(h), § 167(i): Pub. L. 87–834, § 13(c)(1), added subsec. (f) and redesignated former subsecs. (f), (g), and (h) as (g), (h), and (i), respectively. ## § 170: Charitable, etc., contributions and gifts - § 170(e), § 170(f), § 170(g): Pub. L. 87–834 added subsec. (e) and redesignated former subsecs. (e) and (f) as (f) and (g), respectively. ## § 179: Election to expense certain depreciable business assets - § 179(d)(5): Pub. L. 87–834, § 13(c)(2)(A), substituted “section 167(h)” for “section 167(g)”. - § 179(d)(8): Pub. L. 87–834, § 13(c)(2)(B), substituted “section 167(g)” for “section 167(f)”. ## § 216: Deduction of taxes, interest, and business depreciation by cooperative housing corporation tenant-stockholder - § 216: Pub. L. 87–834 substituted “Deduction of taxes, interest, and business depreciation by cooperative housing corporation tenant-stockholders” for “Amounts representing taxes and interest paid to cooperative housing corporation” in section catchline, and added subsec. (c). ## § 245: Dividends received from certain foreign corporations - § 245(b): Pub. L. 87–834 designated existing provisions as subsec. (a), inserted heading, and added subsec. (b). ## § 263: Capital expenditures - § 263(a)(1)(E): Pub. L. 87–834 added subpar. (E). ## § 274: Disallowance of certain entertainment, etc., expenses - Enacted 26 U.S.C. § 274. ## § 301: Distributions of property - § 301(b)(1): Pub. L. 87–834, § 13(f)(2), substituted “subsection (b) or (c) of section 311 or under section 1245(a)” for “subsection (b) or (c) of section 311”. - § 301(b)(1): Pub. L. 87–834, § 5(a), added subpar. (C). - § 301(d): Pub. L. 87–834, § 13(f)(2), substituted “subsection (b) or (c) of section 311 or under section 1245(a)” for “subsection (b) or (c) of section 311”. - § 301(d): Pub. L. 87–834, § 5(b), added par. (3). ## § 312: Effect on earnings and profits - § 312(c): Pub. L. 87–834, § 13(f)(3), included any gain recognized under section 1245(a). - § 312(l): Pub. L. 87–834, § 14(b)(1), added subsec. (l). ## § 318: Constructive ownership of stock - § 318(b)(7): Pub. L. 87–834 added par. (7). ## § 381: Carryovers in certain corporate acquisitions - § 381(c)(23): Pub. L. 87–834 added par. (23). ## § 501: Exemption from tax on corporations, certain trusts, etc. - § 501(c)(15): Pub. L. 87–834 substituted “$150,000” for “$75,000”. ## § 521: Exemption of farmers’ cooperatives from tax - § 521(a): Pub. L. 87–834 substituted “part I of subchapter T (sec. 1381 and following)” for “section 522” in two places. ## § 535: Accumulated taxable income - § 535(b)(1): Pub. L. 87–834 substituted “accrued during the taxable year or deemed to be paid by a domestic corporation under section 902(a)(1) or 960(a)(1)(C) for the taxable year” for “accrued during the taxable year”. ## § 545: Undistributed personal holding company income - § 545(b)(1): Pub. L. 87–834 substituted “accrued during the taxable year or deemed to be paid by a domestic corporation under section 902(a)(1) or 960(a)(1)(C) for the taxable year” for “accrued during the taxable year”. ## § 591: Deduction for dividends paid on deposits - § 591: Pub. L. 87–834 included other savings institutions chartered and supervised as savings and loan or similar associations under Federal or State law, and authorized amounts paid as interest as a deduction. ## § 593: Reserves for losses on loans - § 593: Pub. L. 87–834 amended section generally. Prior to such amendment, section read as follows: ## § 613: Percentage depletion - § 613(a): Pub. L. 87–834 inserted provisions requiring the allowable deductions taken into account with respect to expenses of mining in computing the taxable income from the property to be decreased by an amount equal to so much of any gain which is treated under section 1245 as gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231, and is properly allocable to the property. ## § 642: Special rules for credits and deductions - § 642(e): Pub. L. 87–834 substituted a reference to section 167(h) for a reference to section 167(g). ## § 643: Definitions applicable to subparts A, B, C, and D - § 643(a)(6): Pub. L. 87–834, § 7(a)(1), substituted “Income of foreign trust” for “Foreign income” in heading, designated existing provisions as subpar. (A), and added subpars. (B) and (C). - § 643(d): Pub. L. 87–834, § 7(a)(2), added subsec. (d). ## § 665: Definitions applicable to subpart D - § 665(b): Pub. L. 87–834, § 7(b)(1), substituted “Accumulation distributions of trusts other than certain foreign trusts” for “Accumulation distribution” in heading, and inserted “in the case of a trust (other than a foreign trust created by a United States person),” after “purposes of this subpart,”. - § 665(c), § 665(d), § 665(e): Pub. L. 87–834, § 7(b)(2), added subsec. (c) and redesignated former subsecs. (c) and (d) as (d) and (e), respectively. ## § 666: Accumulation distribution allocated to preceding years - § 666(a): Pub. L. 87–834 inserted “(other than a foreign trust created by a United States person)” after “In the case of a trust”, and inserted sentence making this subsection applicable, in the case of a foreign trust created by a United States person, to the preceding taxable years of the trust without regard to any provision of the preceding sentences of this subsection which would (but for this sentence) limit its application to the 5 preceding taxable years. ## § 751: Unrealized receivables and inventory items - § 751(c): Pub. L. 87–834, § 13(f)(1), defined “unrealized receivables” for purposes of this section and section 731, 736, and 741, as including section 1245 property, but only to the extent of the amount which would be treated as gain to which section 1245(a) would apply if (at the time of the transaction described in this section or section 731, 736, or 741, as the case may be) such property had been sold by the partnership at its fair market value. - § 751(d)(2): Pub. L. 87–834, § 14(b)(2), added subpar. (C), redesignated former subpar. (C) as (D), and substituted “subparagraph (A), (B), or (C)” for “subparagraph (A) or (B)”. ## § 831: Tax on insurance companies other than life insurance companies - § 831: Pub. L. 87–834, § 8(g)(4)(B), substituted “and certain mutual fire or flood insurance companies” for “and mutual fire insurance companies issuing perpetual policies” in section catchline. - § 831(a): Pub. L. 87–834, § 8(e)(1), included flood insurance companies, and substituted provisions authorizing imposition of the tax on those companies whose principal business is the issuance of policies for which the premium deposits are the same, regardless of the length of the term for which the policies are written, if the unabsorbed portion of such premium deposits not required for losses, expenses, or establishment of reserves is returned or credited to the policyholder on cancellation or expiration of the policy for provisions which authorized imposition of tax on those companies which issued policies for which the sole premium charged is a single deposit which (except for such deduction of underwriting costs as may be provided) is refundable on cancellation or expiration of the policy. - § 831(c), § 831(d): Pub. L. 87–834, § 8(f), added subsec. (c) and redesignated former subsec. (c) as (d). ## § 832: Insurance company taxable income - § 832(b)(1)(C): Pub. L. 87–834, § 8(e)(3), (5), substituted “section 831(a)(3)(A)” for “section 831(a)”. - § 832(b)(1)(D): Pub. L. 87–834, § 8(e)(5), added subpar. (D). - § 832(b)(4): Pub. L. 87–834, § 8(e)(2), inserted provisions defining unearned premiums of mutual fire or flood insurance companies, and which require premiums paid by the subscriber of a mutual flood insurance company to be treated, for purposes of computing the taxable income of such subscriber, in the same manner as premiums paid by a policyholder to a mutual fire insurance company referred to in par. (3) of section 831(a) of this title. - § 832(c)(11): Pub. L. 87–834, § 8(e)(4), substituted “section 831(a)(3)(A)” for “section 831(a)”, and inserted definition of “dividends and similar distributions”. ## § 834: Determination of taxable investment income - § 834: Pub. L. 87–834, § 8(b)(1), substituted “Determination of taxable investment income” for “Determination of mutual insurance company taxable income” in section catchline. - § 834(a): Pub. L. 87–834, § 8(b)(1), defined “taxable investment income” and “investment loss” for purposes of this part, and struck out provisions which defined “mutual insurance company taxable income” for purposes of section 821 of this title, which provisions are now contained in section 821(b) of this title. - § 834(c): Pub. L. 87–834, § 8(b)(2), (3), substituted “taxable investment income” for “mutual insurance company taxable income” in opening provisions and in pars. (2) and (6)(A), and inserted sentence in par. (7) providing that in applying section 246(b) (relating to limitations on aggregate amount of deductions for dividends received) for purposes of par. (7), reference in such section to “taxable income” shall be treated as a reference to “taxable investment income”. - § 834(e): Pub. L. 87–834, § 8(b)(2), substituted “taxable investment income” for “mutual insurance company taxable income”. - § 834: Pub. L. 87–834, § 8(b)(4), added subsec. (f). Provisions of subsec. (f) were formerly contained in section 823 of this title. ## § 835: Election by reciprocal - Enacted 26 U.S.C. § 835. ## § 841: Credit for foreign taxes - § 841: Pub. L. 87–834 added par. (2) and redesignated former par. (2) as (3). ## § 861: Income from sources within the United States - § 861(a)(2)(B): Pub. L. 87–834 substituted “to the extent exceeding the amount which is 100/85ths of the amount of the deduction allowable under section 245 in respect of such dividends” for “to the extent exceeding the amount of the deduction allowable under section 245 in respect of such dividends.” ## § 901: Taxes of foreign countries and of possessions of United States - § 901(a): Pub. L. 87–834, § 12(b)(1), substituted “sections 902 and 960” for “section 902”. - § 901(d): Pub. L. 87–834, § 9(d)(3), added par. (4). ## § 904: Limitation on credit - § 904(f): Pub. L. 87–834, § 10(a), added subsec. (f). Former subsec. (f) redesignated (g). - § 904(g): Pub. L. 87–834, §§ 10(a), 12(b)(2), redesignated former subsec. (f) as (g), designated existing provisions as par. (2), and added par. (1). ## § 911: Citizens or residents of the United States living abroad - § 911(a): Pub. L. 87–834 substituted “which constitute earned income attributable to services performed during such uninterrupted period” for “if such amounts constitute earned income (as defined in subsection (b)) attributable to such period” in par. (1), and “which constitute earned income attributable to services performed during such 18-month period” for “if such amounts constitute earned income (as defined in subsection (b)) attributable to such period” in par. (2), inserted provisions in pars. (1) and (2) requiring the amount excluded under such paragraphs to be computed by applying the special rules contained in subsec. (c), and eliminated provisions from par. (2) which limited the amount excluded under such paragraph to not more than $20,000 if the 18-month period includes the entire taxable year, and to not more than an amount which bears the same ratio to $20,000 as the number of days in the part of the taxable year within the 18-month period bears to the total number of days in such year if the 18-month period does not include the entire taxable year. - § 911(c), § 911(d): Pub. L. 87–834 added subsec. (c) and redesignated former subsec. (c) as (d). ## § 951: Amounts included in gross income of United States shareholders - Enacted 26 U.S.C. § 951. ## § 952: Subpart F income defined - Enacted 26 U.S.C. § 952. ## § 953: Insurance income - Enacted 26 U.S.C. § 953. ## § 954: Foreign base company income - Enacted 26 U.S.C. § 954. ## § 956: Investment of earnings in United States property - Enacted 26 U.S.C. § 956. ## § 957: Controlled foreign corporations; United States persons - Enacted 26 U.S.C. § 957. ## § 958: Rules for determining stock ownership - Enacted 26 U.S.C. § 958. ## § 959: Exclusion from gross income of previously taxed earnings and profits - Enacted 26 U.S.C. § 959. ## § 960: Deemed paid credit for subpart F inclusions - Enacted 26 U.S.C. § 960. ## § 961: Adjustments to basis of stock in controlled foreign corporations and of other property - Enacted 26 U.S.C. § 961. ## § 962: Election by individuals to be subject to tax at corporate rates - Enacted 26 U.S.C. § 962. ## § 964: Miscellaneous provisions - Enacted 26 U.S.C. § 964. ## § 970: Reduction of subpart F income of export trade corporations - Enacted 26 U.S.C. § 970. ## § 971: Definitions - Enacted 26 U.S.C. § 971. ## § 1016: Adjustments to basis - § 1016(a)(3)(D): Pub. L. 87–834, § 8(g)(2), added subpar. (D). - § 1016(a)(19): Pub. L. 87–834, § 2(f), added par. (19). - § 1016(a)(20): Pub. L. 87–834, § 12(b)(4), added par. (20). ## § 1223: Holding period of property - § 1223(10), § 1223(11): Pub. L. 87–834 added par. (10) and redesignated former par. (10) as (11). ## § 1245: Gain from dispositions of certain depreciable property - Enacted 26 U.S.C. § 1245. ## § 1248: Gain from certain sales or exchanges of stock in certain foreign corporations - Enacted 26 U.S.C. § 1248. ## § 1249: Gain from certain sales or exchanges of patents, etc., to foreign corporations - Enacted 26 U.S.C. § 1249. ## § 1381: Organizations to which part applies - Enacted 26 U.S.C. § 1381. ## § 1382: Taxable income of cooperatives - Enacted 26 U.S.C. § 1382. ## § 1383: Computation of tax where cooperative redeems nonqualified written notices of allocation or nonqualified per-unit retain certificates - Enacted 26 U.S.C. § 1383. ## § 1385: Amounts includible in patron’s gross income - Enacted 26 U.S.C. § 1385. ## § 1388: Definitions; special rules - Enacted 26 U.S.C. § 1388. ## § 2031: Definition of gross estate - § 2031(a): Pub. L. 87–834 struck out provisions which excepted real property situated outside the United States. ## § 2033: Property in which the decedent had an interest - § 2033: Pub. L. 87–834 struck out provisions which excepted real property situated outside of the United States. ## § 2034: Dower or curtesy interests - § 2034: Pub. L. 87–834 struck out provisions which excepted real property situated outside of the United States. ## § 2035: Adjustments for certain gifts made within 3 years of decedent’s death - § 2035(a): Pub. L. 87–834 struck out provisions which excepted real property situated outside of the United States. ## § 2036: Transfers with retained life estate - § 2036(a): Pub. L. 87–834 struck out provisions which excepted real property situated outside of the United States. ## § 2037: Transfers taking effect at death - § 2037(a): Pub. L. 87–834 struck out provisions which excepted real property situated outside of the United States. ## § 2038: Revocable transfers - § 2038(a): Pub. L. 87–834 struck out provisions which excepted real property situated outside of the United States. ## § 2040: Joint interests - § 2040: Pub. L. 87–834 struck out provisions which excepted real property outside of the United States. ## § 2041: Powers of appointment - § 2041(a): Pub. L. 87–834 struck out provisions which excepted real property situated outside of the United States. ## § 6038: Information reporting with respect to certain foreign corporations and partnerships - § 6038(a)(1): Pub. L. 87–834, among other changes, substituted in introductory provisions “Every United States person shall furnish” for “A domestic corporation shall furnish”, in subpar. (D)(i) “such person” for “any foreign corporation controlled by the domestic corporation”, in subpar. (D)(ii) “any other corporation which such person controls” for “any foreign subsidiary of a foreign corporation controlled by the domestic corporation”, in subpar. (D)(iii) “any United States person owning, at the time the transaction takes place, 10 percent or more of the value of any class of stock outstanding of such foreign corporation” for “the domestic corporation or any shareholder of the domestic corporation owning at the time the transaction takes place 10 percent or more of the value of any class of stock outstanding of the domestic corporation”, and in subpar. (E) “each United States person who is a shareholder” for “each citizen or resident of the United States and each domestic corporation who is a shareholder”, and struck out provisions throughout the subsection which related to foreign subsidiaries. - § 6038(a)(2): Pub. L. 87–834 substituted provisions requiring the information to be furnished for the annual accounting period ending with or within the United States person’s taxable year for provisions which required such information to be furnished for the annual accounting period ending with or within the domestic corporation’s taxable year, and struck out provisions which related to the furnishing of information in the case of foreign subsidiaries. - § 6038(a)(3): Pub. L. 87–834 struck out provisions which related to foreign subsidiaries. - § 6038(b): Pub. L. 87–834, among other changes, substituted “If a United States person fails to furnish” for “If a domestic corporation fails to furnish” in the opening provisions, inserted provisions relating to reduction of taxes in applying sections 901 and 960 of this title, to the maximum amount of reduction under par. (1) for each failure to furnish information with respect to a foreign corporation required under subsec. (a)(1), and making the reduction provided by subsec. (b) inapplicable, in applying subsecs. (a) and (b) of section 902 and subsec. (a) of section 960, for purposes of determining the amount of accumulated profits in excess of income, war profits, and excess profits taxes, and eliminated provisions which related to the furnishing of information with respect to foreign subsidiaries. - § 6038(c): Pub. L. 87–834 substituted provisions empowering the Secretary to provide for the furnishing of information by only one person where two or more persons would be required to furnish information under subsec. (a) with respect to the same foreign corporation for the same period for provisions which required a domestic corporation if at any time during its taxable year owned more than 50 percent of the voting stock of a foreign corporation to be deemed to be in control of such foreign corporation, and in the case of a foreign corporation if at any time during its annual accounting period owned more than 50 percent of the voting stock of another foreign corporation, that such other corporation shall be considered a foreign subsidiary of the corporation owning such stock. The provisions relating to control are now contained in subsec. (d) of this section. - § 6038(d): Pub. L. 87–834 added par. (1) which was formerly covered in part by subsec. (c) of this section, designated existing provisions as par. (2), and eliminated from par. (2) provisions which related to the annual accounting period of a foreign subsidiary. - § 6038(e): Pub. L. 87–834 designated existing provisions as par. (1) and added par. (2). ## § 6041: Information at source - § 6041(a): Pub. L. 87–834, § 19(f)(1), substituted “(other than payments to which section 6042(a)(1), 6044(a)(1), or 6049(a)(1) applies, and other than payments with respect to which a statement is required under the authority of section 6042(a)(2), 6044(a)(2), 6045, 6049(a)(2), or 6049(a)(3))” for “other than payments described in section 6042(1) or section 6045)”. - § 6041(c): Pub. L. 87–834, § 19(f)(2), repealed subsec. (c) which related to returns of payments of interest by corporations. ## § 6042: Returns regarding payments of dividends and corporate earnings and profits - § 6042: Pub. L. 87–834 substituted “Returns regarding payments of dividends and corporate earnings and profits” for “Returns regarding corporate dividends, earnings, and profits” in section catchline, added subsecs. (a) to (c), designated existing provisions of section as subsec. (d), and substituted in par. (1) of subsec. (d) “furnish to the Secretary or his delegate a statement stating the name and address of each shareholder, and the number of shares owned by each shareholder” for “Make a return of its payments of dividends, stating the name and address of, the number of shares owned by, and the amount of dividends paid to, each shareholder.” ## § 6044: Returns regarding payments of patronage dividends - § 6044: Pub. L. 87–834 substituted “Returns regarding payments of patronage dividends” for “Returns regarding patronage dividends” in section catchline and amended text generally. Prior to amendment, text read as follows: ## § 6046: Returns as to organization or reorganization of foreign corporations and as to acquisitions of their stock - § 6046: Pub. L. 87–834 substituted “organization or reorganization of foreign corporations and as to acquisitions of their stock” for “creation or organization, or reorganization, of foreign corporations” in section catchline. - § 6046(a): Pub. L. 87–834 amended subsec. (a) generally. Prior to amendment, subsec. (a) read as follows: - § 6046(b): Pub. L. 87–834 inserted the exception providing that in the case of persons described only in subsec. (a)(1) the information required shall be limited to the names and addresses of persons described in subsec. (a)(2). - § 6046(c): Pub. L. 87–834 substituted provisions requiring, for purposes of subsec. (a), stock owned directly or indirectly by a person (including, in the case of an individual, stock owned by members of his family) to be taken into account for provisions which defined “United States shareholder”. - § 6046(d), § 6046(e), § 6046(f): Pub. L. 87–834 added subsecs. (d) and (e) and redesignated former subsec. (d) as (f) and inserted a reference to section 6679 of this title. ## § 6048: Information with respect to certain foreign trusts - Enacted 26 U.S.C. § 6048. ## § 6049: Returns regarding payments of interest - Enacted 26 U.S.C. § 6049. ## § 6072: Time for filing income tax returns - § 6072(d): Pub. L. 87–834 substituted provisions relating to returns by an exempt cooperative association described in section 1381(a)(1), or by an organization described in section 1381(a)(2) which is under an obligation to pay patronage dividends in an amount equal to at least 50 percent of its net earnings from business done with or for its patrons, or which paid patronage dividends in such an amount out of the net earnings from business done with or for patrons during the most recent taxable year for which it had such net earnings for provisions which related to returns of exempt cooperative associations taxable under the provisions of section 522. ## § 6501: Limitations on assessment and collection - § 6501(j), § 6501(k): Pub. L. 87–834 added subsec. (j) and redesignated former subsec. (j) as (k). ## § 6511: Limitations on credit or refund - § 6511(d)(4): Pub. L. 87–834 added par. (4). ## § 6601: Interest on underpayment, nonpayment, or extensions of time for payment, of tax - § 6601(e): Pub. L. 87–834 designated existing provisions as par. (1) and added par. (2). ## § 6611: Interest on overpayments - § 6611(f): Pub. L. 87–834 designated existing provisions as par. (1) and added par. (2). ## § 6652: Failure to file certain information returns, registration statements, etc. - § 6652(a): Pub. L. 87–834 added subsec. (a). Former subsec. (a) redesignated (b). - § 6652(b): Pub. L. 87–834 redesignated former subsec. (a) as (b), and substituted “section 6042(a)(2) (relating to payments of dividends aggregating less than $10), section 6044(a)(2) (relating to payments of patronage dividends aggregating less than $10), section 6049(a)(2) (relating to payments of interest aggregating less than $10), section 6049(a)(3) (relating to other payments of interest by corporations), or section 6051(d) (relating to information returns with respect to income tax withheld)” for “section 6042(1) (relating to payments of corporate dividends), section 6044 (relating to patronage dividends), or section 6051(d) (relating to information returns with respect to income tax withheld)”. Former subsec. (b) redesignated (c). - § 6652(c): Pub. L. 87–834 redesignated former subsec. (b) as (c). ## § 6677: Failure to file information with respect to certain foreign trusts - Enacted 26 U.S.C. § 6677. ## § 6679: Failure to file returns, etc., with respect to foreign corporations or foreign partnerships - Enacted 26 U.S.C. § 6679. ## § 7701: Definitions - § 7701(a)(19): Pub. L. 87–834, § 6(c), amended par. (19) generally. Prior to such amendment, subsection read as follows: “The term ‘domestic building and loan association’ means a domestic building and loan association, a domestic savings and loan association, and a Federal savings and loan association, substantially all the business of which is confined to making loans to members.” - § 7701(a)(30), § 7701(a)(31): Pub. L. 87–834, § 7(h), added pars. (30), (31).