26 U.S.C. § 561

Definition of deduction for dividends paid

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(a) General ruleThe deduction for dividends paid shall be the sum of—(1) the dividends paid during the taxable year,(2) the consent dividends for the taxable year (determined under section 565), and(3) in the case of a personal holding company, the dividend carryover described in section 564.(b) Special rules applicable

In determining the deduction for dividends paid, the rules provided in section 562 (relating to rules applicable in determining dividends eligible for dividends paid deduction) and section 563 (relating to dividends paid after the close of the taxable year) shall be applicable.

(Aug. 16, 1954, ch. 736, 68A Stat. 198; Pub. L. 87–403, § 3(f), Feb. 2, 1962, 76 Stat. 8; Pub. L. 94–455, title XIX, § 1901(b)(32)(H), Oct. 4, 1976, 90 Stat. 1800.)Editorial NotesAmendments

1976—Subsec. (b). Pub. L. 94–455 redesignated existing provisions of par. (1) as subsec. (b) and struck out par. (2) relating to special adjustment on disposition of antitrust stock as a dividend.

1962—Subsec. (b). Pub. L. 87–403 designated existing provisions as par. (1) and added par. (2).

Statutory Notes and Related SubsidiariesEffective Date of 1976 Amendment

Amendment by Pub. L. 94–455 applicable with respect to taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94–455, set out as a note under section 2 of this title.

Effective Date of 1962 Amendment

Amendment by Pub. L. 87–403 applicable only with respect to distributions made after Feb. 2, 1962, see section 3(g) of Pub. L. 87–403, set out as a note under section 312 of this title.

Notes of Decisions

Cited in 1 case, 1978–1978 · leading case: Fulman v. United States, 434 U.S. 528 (1978).

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Fulman v. United States, 434 U.S. 528 (1978). · cites it 2× “562-1 (a) (1977), that a personal holding company's distribution of appreciated property to its shareholders results, under §§ 561 and 562 of the Internal Revenue Code of 1954, 26 U. S. C. §§ 561 and 562, in a dividends-paid deduction limited to an amount that is "the adjusted…”

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