Internal Revenue Code · 26 U.S.C.
§ 541. Imposition of personal holding company tax
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. § 541
At a glance
Read from the text, the source credit and the official notes. Not part of the law.
- Status
- In force
- Enacted
- February 26, 1964 by Pub. L. 88–272
- Last amended
- January 2, 2013 by Pub. L. 112–240
- Amendments
- 7 dated changes in the source credit
- Length
- 170 words · about 1 min to read
- Cross-references
- cites 2; cited by 11 Code sections and 17 other regulations
- Regulations
- 1 issued under this section
In addition to other taxes imposed by this chapter, there is hereby imposed for each taxable year on the undistributed personal holding company income (as defined in section 545) of every personal holding company (as defined in section 542) a personal holding company tax equal to 20 percent of the undistributed personal holding company income.
(Aug. 16, 1954, ch. 736, 68A Stat. 182; Pub. L. 88–272, title II, § 225(a), Feb. 26, 1964, 78 Stat. 79; Pub. L. 97–34, title I, § 101(d)(2), Aug. 13, 1981, 95 Stat. 184; Pub. L. 99–514, title I, § 104(b)(8), Oct. 22, 1986, 100 Stat. 2105; Pub. L. 101–508, title XI, § 11802(f)(1), Nov. 5, 1990, 104 Stat. 1388–530; Pub. L. 103–66, title XIII, §§ 13201(b)(2), 13202(b), Aug. 10, 1993, 107 Stat. 459, 461; Pub. L. 107–16, title I, § 101(c)(5), June 7, 2001, 115 Stat. 43; Pub. L. 108–27, title III, § 302(e)(6), May 28, 2003, 117 Stat. 764; Pub. L. 112–240, title I, § 102(c)(1)(B), Jan. 2, 2013, 126 Stat. 2319.)
Regulations under this section
Treasury regulations (26 CFR) issued under § 541
Cross-references
Computed from the citations in the text of Title 26 and 26 CFR.
This section cites 2 other sections
Cited by 11 Code sections
- § 26(b)(2)(G) Limitation based on tax liability; definition of tax liability
- § 111(d) Recovery of tax benefit items
- § 137(c)(2) Adoption assistance programs
- § 535(b)(1) Accumulated taxable income
- § 542(c)(8) Definition of personal holding company
- § 545(b)(1) Undistributed personal holding company income
- § 546 Income not placed on annual basis
- § 547(a) Deduction for deficiency dividends
- § 563(b) Rules relating to dividends paid after close of taxable year
- § 882(c)(2) Tax on income of foreign corporations connected with United States business
- § 992(e)(2) Requirements of a domestic international sales corporation
Cited in 17 regulations not issued under it
- § 1.11-1 Tax on corporations.
- § 1.50A-1 Determination of amount.
- § 1.111-1 Recovery of certain items previously deducted or credited.
- § 1.381(c)(17)-1 Deficiency dividend of personal holding company.
- § 1.468A-4 Treatment of nuclear decommissioning fund.
- § 1.468B-2 Taxation of qualified settlement funds and related administrative requirements.
- § 1.535-2 Adjustments to taxable income.
- § 1.545-2 Adjustments to taxable income.
- § 1.545-3 Special adjustment to taxable income.
- § 1.547-1 General rule.
- § 1.547-2 Requirements for deficiency dividends.
- § 1.563-2 Personal holding company tax.
- § 1.881-1 Manner of taxing foreign corporations.
- § 1.992-4 Coordination with personal holding company provisions in case of certain produced film rents.
- § 1.1201-1 Alternative tax.
- § 1.1502-2 Computation of tax liability.
- § 1.1502-3 Consolidated tax credits.
Amendment history
From the source credit and the official notes, newest first.
- Amended by Pub. L. 112–240
- Amended by Pub. L. 108–27
- Amended by Pub. L. 107–16
- Amended by Pub. L. 103–66
- Amended by Pub. L. 101–508
- Amended by Pub. L. 99–514
- Amended by Pub. L. 97–34
- Enacted by Pub. L. 88–272
Where it sits in the Code
- Subtitle A Income Taxes
- Chapter 1 NORMAL TAXES AND SURTAXES
- Subchapter G Corporations Used to Avoid Income Tax on Shareholders
- Part II PERSONAL HOLDING COMPANIES
Nearby sections
- § 541 Imposition of personal holding company tax
- § 542 Definition of personal holding company
- § 543 Personal holding company income
- § 544 Rules for determining stock ownership
- § 545 Undistributed personal holding company income
Official notes
Show the Law Revision Counsel's notes (amendments, effective dates)
Editorial Notes
Amendments
2013—Pub. L. 112–240 substituted “20 percent” for “15 percent”.
2003—Pub. L. 108–27 substituted “equal to 15 percent of the undistributed personal holding company income.” for “equal to the product of the highest rate of tax under section 1(c) and the undistributed personal holding company income.”
2001—Pub. L. 107–16 substituted “equal to the product of the highest rate of tax under section 1(c) and the undistributed personal holding company income.” for “equal to 39.6 percent of the undistributed personal holding company income.”
1993—Pub. L. 103–66, § 13202(b), substituted “39.6 percent” for “36 percent”.
Pub. L. 103–66, § 13201(b)(2), substituted “36 percent” for “28 percent”.
1990—Pub. L. 101–508 struck out “(38.5 percent in the case of taxable years beginning in 1987)” after “28 percent”.
1986—Pub. L. 99–514 substituted “28 percent (38.5 percent in the case of taxable years beginning in 1987)” for “50 percent”.
1981—Pub. L. 97–34 substituted “50 percent” for “70 percent”.
1964—Pub. L. 88–272 reduced the tax from 75 percent of undistributed income not in excess of $2,000, and 85 percent when in excess of $2,000, to 70 percent.
Statutory Notes and Related Subsidiaries
Effective Date of 2013 Amendment
Amendment by Pub. L. 112–240 applicable to taxable years beginning after Dec. 31, 2012, see section 102(d)(1) of Pub. L. 112–240, set out as a note under section 1 of this title.
Effective Date of 2003 Amendment
Amendment by Pub. L. 108–27 applicable, except as otherwise provided, to taxable years beginning after Dec. 31, 2002, see section 302(f) of Pub. L. 108–27, set out as an Effective and Termination Dates of 2003 Amendment note under section 1 of this title.
Effective Date of 2001 Amendment
Amendment by Pub. L. 107–16 applicable to taxable years beginning after Dec. 31, 2000, see section 101(d) of Pub. L. 107–16, set out as an Effective and Termination Dates of 2001 Amendment note under section 1 of this title.
Effective Date of 1993 Amendment
Amendment by Pub. L. 103–66 applicable to taxable years beginning after Dec. 31, 1992, see sections 13201(c) and 13202(c) of Pub. L. 103–66, set out as notes under section 1 of this title.
Effective Date of 1986 Amendment
Amendment by Pub. L. 99–514 applicable to taxable years beginning after Dec. 31, 1986, see section 151(a) of Pub. L. 99–514, set out as a note under section 1 of this title.
Effective Date of 1981 Amendment
Amendment by Pub. L. 97–34 applicable to taxable years beginning after Dec. 31, 1981, see section 101(f)(1) of Pub. L. 97–34, set out as a note under section 1 of this title.
Effective Date of 1964 Amendment
Amendment by Pub. L. 88–272 applicable to taxable years beginning after Dec. 31, 1963, see section 225(l) of Pub. L. 88–272 set out as a note under section 316 of this title.
Savings Provision
For provisions that nothing in amendment by Pub. L. 101–508 be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to Nov. 5, 1990, for purposes of determining liability for tax for periods ending after Nov. 5, 1990, see section 11821(b) of Pub. L. 101–508, set out as a note under section 45K of this title.