Treasury Regulations · 26 CFR
§ 1.542-2. Gross income requirement.
Regulation text, no changes From the eCFR, current as of October 15, 2026. The eCFR is an authoritative but unofficial editorial compilation of the Code of Federal Regulations; the official text is the annual CFR on govinfo. Compare it with this section on ecfr.gov (external site) or the official annual CFR on govinfo (external site).
Regulation under 26 U.S.C. § 542
Cite as 26 CFR § 1.542-2
At a glance
Read from the text and its source citation. Not part of the regulation.
- Status
- In the current eCFR
- Issued
- November 26, 1960 by T.D. 6500
- Last amended
- January 29, 1965 by T.D. 6795
- Issued under
- 26 U.S.C. § 542
- Length
- 161 words · about 1 min to read
- Cross-references
- cites 3 Code sections and 4 regulations; cited by 3
To meet the gross income requirement it is necessary that at least 80 percent of the total gross income of the corporation for the taxable year be personal holding company income as defined in section 543 and §§ 1.543-1 and 1.543-2. For the definition of gross income see section 61 and §§ 1.61-1 through 1.61-14. Under such provisions gross income is not necessarily synonymous with gross receipts. Further, in the case of transactions in stocks and securities and in commodities transactions, gross income for personal holding company tax purposes shall include only the excess of gains over losses from such transactions. See section 543(b), paragraph (b) (5) and (6) of § 1.543-1 and § 1.543-2. For determining the character of the amount includible in gross income under section 951(a), see paragraph (a) of § 1.951-1.
[T.D. 6500, 25 FR 11737, Nov. 26, 1960, as amended by T.D. 6795, 30 FR 934, Jan. 29, 1965]
Cross-references
Computed from the citations in the text of 26 CFR.
Code sections it cites
- § 543 Personal holding company income
- § 61 Gross income defined
- § 951 Amounts included in gross income of United States shareholders
Regulations it cites
- § 1.543-1 Personal holding company income.
- § 1.61-1 Gross income.
- § 1.543-2 Limitation on gross income and personal holding company income in transactions involving stocks, securities, and commodities.
- § 1.951-1 Amounts included in gross income of United States shareholders.
Cited by 3 other regulations
Amendment history
From the source citation at the end of the section, newest first. T.D. is a Treasury decision; FR is the Federal Register.
- Amended by T.D. 6795 (30 FR 934)
- Issued by T.D. 6500 (25 FR 11737)
Where it sits in 26 CFR
- Subchapter A Income tax
- Part 1 Income taxes
- Personal Holding Companies
Nearby sections
- § 1.541-1 Imposition of tax.
- § 1.542-1 General rule.
- § 1.542-2 Gross income requirement.
- § 1.542-3 Stock ownership requirement.
- § 1.542-4 Corporations filing consolidated returns.
- § 1.543-1 Personal holding company income.
- § 1.543-2 Limitation on gross income and personal holding company income in transactions involving stocks, securities, and commodities.