Treasury Regulations · 26 CFR
§ 1.852-3. Investment company taxable income.
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. § 852
Cite as 26 CFR § 1.852-3
At a glance
Read from the text and its source citation. Not part of the regulation.
- Status
- In the current eCFR
- Source
- T.D. 6500, 25 FR 11402, Nov. 26, 1960; 25 FR 14021, Dec. 21, 1960; T.D. 9989, 89 FR 17606, Mar. 11, 2024, unless otherwise noted.
- Issued under
- 26 U.S.C. § 852
- Length
- 272 words · about 1 min to read
- Cross-references
- cites 9 Code sections and 2 regulations; cited by 3
Section 852(b)(2) requires certain adjustments to be made to convert taxable income of the investment company to investment company taxable income, as follows:
¶(a) The excess, if any, of the net long-term capital gain over the net short-term capital loss shall be excluded;
¶(c) The special deductions provided in part VIII (section 241 and following, except section 248), subchapter B, chapter 1 of the Code, shall not be allowed. Those not allowed are the deduction for partially tax-exempt interest provided by section 242, the deductions for dividends received provided by sections 243, 244, and 245, and the deduction for certain dividends paid provided by section 247. However, the deduction provided by section 248 (relating to organizational expenditures), otherwise allowable in computing taxable income, shall likewise be allowed in computing the investment company taxable income. See section 852(b)(1) and paragraph (a) of § 1.852-2 for treatment of the deduction for partially tax-exempt interest (provided by section 242) for purposes of computing the normal tax under section 11;
¶(d) The deduction for dividends paid (as defined in section 561) shall be allowed, but shall be computed without regard to capital gains dividends (as defined in section 852(b)(3)(C) and paragraph (c) of § 1.852-4); and
Cross-references
Computed from the citations in the text of 26 CFR.
Code sections it cites
- § 852 Taxation of regulated investment companies and their shareholders
- § 172 Net operating loss deduction
- § 241 Allowance of special deductions
- § 248 Organizational expenditures
- § 242 Repealed
- § 243 Dividends received by corporations
- § 11 Tax imposed
- § 561 Definition of deduction for dividends paid
- § 443 Returns for a period of less than 12 months
Regulations it cites
- § 1.852-2 Method of taxation of regulated investment companies.
- § 1.852-4 Method of taxation of shareholders of regulated investment companies.
Cited by 3 other regulations
Where it sits in 26 CFR
- Subchapter A Income tax
- Part 1 Income taxes
- Regulated investment companies and real estate investment trusts
Nearby sections
- § 1.851-6 Investment companies furnishing capital to development corporations.
- § 1.851-7 Certain unit investment trusts.
- § 1.852-1 Taxation of regulated investment companies.
- § 1.852-2 Method of taxation of regulated investment companies.
- § 1.852-3 Investment company taxable income.
- § 1.852-4 Method of taxation of shareholders of regulated investment companies.
- § 1.852-5 Earnings and profits of a regulated investment company.
- § 1.852-6 Records to be kept for purpose of determining whether a corporation claiming to be a regulated investment company is a personal holding company.
- § 1.852-7 Additional information required in returns of shareholders.