Internal Revenue Code · 26 U.S.C.
§ 111. Recovery of tax benefit items
Official text, no changes From the Office of the Law Revision Counsel, release point 119-121 (current through Public Law 119-121 (October 9, 2026)). Compare it with the official text at uscode.house.gov (external site).
Cite as 26 U.S.C. § 111
At a glance
Read from the text, the source credit and the official notes. Not part of the law.
- Status
- In force
- Enacted
- October 4, 1976 by Pub. L. 94–455
- Last amended
- October 22, 1986 by Pub. L. 99–514
- Amendments
- 3 dated changes in the source credit
- Length
- 4 subsections · 428 words · about 2 min to read
- Cross-references
- cites 3; cited by 3 Code sections and 13 other regulations
- Regulations
- 1 issued under this section
Gross income does not include income attributable to the recovery during the taxable year of any amount deducted in any prior taxable year to the extent such amount did not reduce the amount of tax imposed by this chapter.
Paragraph (1) shall not apply to the extent that the credit allowable for the recovered amount did not reduce the amount of tax imposed by this chapter.
This subsection shall not apply with respect to the credit determined under section 46 and the foreign tax credit.
For purposes of this section, an increase in a carryover which has not expired before the beginning of the taxable year in which the recovery or adjustment takes place shall be treated as reducing tax imposed by this chapter.
(Aug. 16, 1954, ch. 736, 68A Stat. 33; Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 96–589, § 2(c), Dec. 24, 1980, 94 Stat. 3396; Pub. L. 98–369, div. A, title I, § 171(a), July 18, 1984, 98 Stat. 698; Pub. L. 99–514, title XVIII, § 1812(a)(1), (2), Oct. 22, 1986, 100 Stat. 2833.)
Regulations under this section
Treasury regulations (26 CFR) issued under § 111
Cross-references
Computed from the citations in the text of Title 26 and 26 CFR.
This section cites 3 other sections
- § 46 Amount of credit
- § 531 Imposition of accumulated earnings tax
- § 541 Imposition of personal holding company tax
Cited by 3 Code sections
- § 381(c)(12) Carryovers in certain corporate acquisitions
- § 1351(d)(2) Treatment of recoveries of foreign expropriation losses
- § 1398(g)(3) Rules relating to individuals’ title 11 cases
Cited in 13 regulations not issued under it
- § 1.164-6 Apportionment of taxes on real property between seller and purchaser.
- § 1.165-1 Losses.
- § 1.166-8 Losses of guarantors, endorsers, and indemnitors incurred on agreements made before January 1, 1976.
- § 1.166-9 Losses of guarantors, endorsers, and indemnitors incurred, on agreements made after December 31, 1975, in taxable years beginning after such date.
- § 1.381(c)(12)-1 Recovery of bad debts, prior taxes, or delinquency amounts.
- § 1.468B-3 Rules applicable to the transferor.
- § 1.468B-9 Disputed ownership funds.
- § 1.702-1 Income and credits of partner.
- § 1.1016-3 Exhaustion, wear and tear, obsolescence, amortization, and depletion for periods since February 28, 1913.
- § 1.1333-1 Tax adjustment measured by prior benefits.
- § 1.1337-1 Determination of tax benefits from allowable deductions.
- § 1.1411-4 Definition of net investment income.
- § 301.6361-1 Collection and administration of qualified taxes.
Amendment history
From the source credit and the official notes, newest first.
Where it sits in the Code
- Subtitle A Income Taxes
- Chapter 1 NORMAL TAXES AND SURTAXES
- Subchapter B Computation of Taxable Income
- Part III ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME
Nearby sections
- § 107 Rental value of parsonages
- § 108 Income from discharge of indebtedness
- § 109 Improvements by lessee on lessor’s property
- § 110 Qualified lessee construction allowances for short-term leases
- § 111 Recovery of tax benefit items
- § 112 Certain combat zone compensation of members of the Armed Forces
- § 113 Repealed
- § 114 Repealed
- § 115 Income of States, municipalities, etc.
Official notes
Show the Law Revision Counsel's notes (amendments, effective dates)
Editorial Notes
Amendments
1986—Subsec. (a). Pub. L. 99–514, § 1812(a)(1), substituted “did not reduce the amount of tax imposed by this chapter” for “did not reduce income subject to tax”.
Subsec. (c). Pub. L. 99–514, § 1812(a)(2), substituted “reducing tax imposed by this chapter” for “reducing income subject to tax or reducing tax imposed by this chapter, as the case may be”.
1984—Pub. L. 98–369 amended section generally, substituting provisions relating to recovery of tax benefit items for provisions relating to recovery of bad debts, prior taxes, and delinquency amounts.
1980—Subsec. (d). Pub. L. 96–589 added subsec. (d).
1976—Subsec. (b)(4). Pub. L. 94–455 struck out “or his delegate” after “Secretary”.
Statutory Notes and Related Subsidiaries
Effective Date of 1986 Amendment
Amendment by Pub. L. 99–514 effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984, Pub. L. 98–369, div. A, to which such amendment relates, see section 1881 of Pub. L. 99–514, set out as a note under section 48 of this title.
Effective Date of 1984 Amendment
Pub. L. 98–369, div. A, title I, § 171(c), July 18, 1984, 98 Stat. 699, provided that: “The amendments made by this section [amending this section] shall apply to amounts recovered after December 31, 1983, in taxable years ending after such date.”
Effective Date of 1980 Amendment
Amendment by Pub. L. 96–589 applicable to transactions which occur after Dec. 31, 1980, other than transactions which occur in a proceeding in a bankruptcy case or similar judicial proceeding or in a proceeding under Title 11 commencing on or after Dec. 31, 1980, with an exception permitting the debtor to make the amendment applicable to transactions occurring after Sept. 30, 1979, in a specified manner, see section 7(a)(1), (f) of Pub. L. 96–589, set out as a note under section 108 of this title.
Plan Amendments Not Required Until January 1, 1989
For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§ 1101–1147 and 1171–1177] or title XVIII [§§ 1800–1899A] of Pub. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99–514, as amended, set out as a note under section 401 of this title.