Statute code

United States IRC sections

Seeded section records for United States IRC.

Country

United States

Code

IRC

Sections

Section 1

Tax imposed

Section 1 imposes the federal income tax on individuals, estates, and trusts using graduated rates that vary by filing status. Section 1(j), added by the Tax Cuts and Jobs Act, sets out the bracket structure currently in effect for tax years 2018 through 2025. Inflation adjustments under Section 1(f) modify bracket thresholds annually.

Section 11(b)

Tax imposed

A tax is hereby imposed for each taxable year on the taxable income of every corporation. In the current text of subsection (b), the amount of the tax is 21 percent of taxable income.

Section 61(a)

Gross income defined

Except as otherwise provided, gross income means all income from whatever source derived, including compensation for services, business income, gains from dealings in property, interest, rents, royalties, dividends, annuities, pensions, and distributive shares of partnership gross income.

Section 63

Taxable income defined

Section 63 defines taxable income as gross income reduced by allowable deductions. Subsection (c) defines the standard deduction. The Tax Cuts and Jobs Act roughly doubled the standard deduction effective 2018 through 2025.

Section 66

Treatment of community income

Section 66 governs the federal income tax treatment of community income earned by spouses in community-property states. Subsection (c) provides an innocent-spouse-style relief from joint liability where one spouse did not know the income was earned by the other.

Section 109

Improvements by lessee on lessor's property

Section 109 excludes from the lessor's gross income the value of improvements made by a lessee on the lessor's property that revert to the lessor upon termination of the lease. Section 1019 prevents the lessor from increasing basis by the excluded amount.

Section 162(a)

Trade or business expenses

There shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, including reasonable compensation, certain travel, and certain rentals or payments for property use.

Section 163(j)

Interest

Section 163 allows a deduction for interest expense subject to several limitations. Section 163(j), substantially revised by the Tax Cuts and Jobs Act, limits business-interest deductions to the sum of business-interest income, 30 percent of adjusted taxable income (calculated without depreciation through 2021), and floor-plan financing interest, with carryforward of disallowed amounts.

Section 164(b)

Taxes

Section 164 allows individuals to deduct certain state, local, and foreign taxes. Section 164(b)(6), added by the Tax Cuts and Jobs Act, caps the aggregate state and local tax deduction for individuals at $10,000 ($5,000 for married filing separately) for tax years 2018 through 2025.

Section 165(c)

Losses

Section 165 allows a deduction for losses sustained during the tax year that are not compensated by insurance or otherwise. Section 165(c) restricts personal losses to those incurred in a trade or business, transactions entered into for profit, and casualty or theft losses (with the TCJA further limiting personal casualty losses to federally declared disaster areas for 2018 through 2025).

Section 167

Depreciation

Section 167 generally allows depreciation deductions for property used in a trade or business or held for the production of income. Most modern depreciation is computed under the modified accelerated cost recovery system in Section 168 rather than the older Section 167 facts-and-circumstances approach.

Section 168(k)

Accelerated cost recovery system

Section 168 establishes the modified accelerated cost recovery system (MACRS) using statutory recovery periods and conventions. Section 168(k) allows additional first-year (bonus) depreciation, set at 100 percent under TCJA and phasing down from 80 percent in 2023 to 0 percent in 2027 absent further legislation.

Section 170

Charitable, etc., contributions and gifts

Section 170 allows itemized deductions for contributions to qualifying charitable organizations subject to percentage-of-AGI limitations. Cash contributions to public charities are generally deductible up to 60 percent of AGI; contributions of capital-gain property up to 30 percent of AGI; private foundation contributions subject to lower limits.

Section 172(a)

Net operating loss deduction

Section 172 allows a deduction for net operating losses (NOLs) carried to other tax years. TCJA repealed the two-year carryback for NOLs generated in 2018 and later and limited the deduction to 80 percent of pre-deduction taxable income for those NOLs. The CARES Act temporarily restored a five-year carryback for NOLs arising in 2018 through 2020.

Section 179

Election to expense certain depreciable business assets

Section 179 allows businesses to elect to expense the cost of qualifying property up to an annual dollar limit, subject to a taxable-income limit and phase-out for total property placed in service above a threshold. The 2024 limit is $1,160,000 with phase-out beginning at $2,890,000.

Section 195

Start-up expenditures

Section 195 allows a deduction of up to $5,000 of start-up expenditures, phased out for total start-up costs above $50,000, with the remainder amortized over 180 months starting in the month business begins. The deduction is elective; without the election, all start-up costs must be capitalized.

Section 199A

Qualified business income deduction

Section 199A allows non-corporate taxpayers a deduction of up to 20 percent of qualified business income from pass-through entities, subject to wage and basis limits above the taxable-income threshold and exclusions for certain specified service trades or businesses. The deduction is scheduled to sunset after 2025.

Section 263

Capital expenditures

Section 263 generally disallows current deductions for amounts paid for new buildings or for permanent improvements or betterments made to increase the value of property. Such amounts must be capitalized and recovered through depreciation or amortization.

Section 263A

Capitalization and inclusion in inventory costs of certain expenses (UNICAP)

Section 263A (UNICAP) generally requires producers and resellers above a gross-receipts threshold to capitalize direct and certain indirect costs related to property produced or held for resale. The TCJA raised the gross-receipts threshold for the small-business exception to $25 million (indexed), simplifying UNICAP for many smaller taxpayers.

Section 274

Disallowance of certain entertainment, etc., expenses

Section 274 disallows deductions for various entertainment, meals, gift, and listed-property expenses unless strict substantiation requirements are met. TCJA generally eliminated the deduction for business-entertainment expenses for 2018 and later.

Section 280A

Disallowance of certain expenses in connection with business use of home

Section 280A generally disallows deductions related to a dwelling unit used by the taxpayer as a residence. Exceptions permit limited deductions for the regular and exclusive business use of a portion of the home, with specific principal-place-of-business rules clarified by Commissioner v. Soliman (1993).

Section 301

Distributions of property

Section 301 governs the tax treatment of distributions of property by a corporation to a shareholder. Distributions out of earnings and profits are taxable as dividends; in excess of E&P, they reduce stock basis; further excess gives rise to gain.

Section 331

Gain or loss to shareholders in corporate liquidations

Section 331 generally treats amounts received in complete liquidation of a corporation as full payment in exchange for the shareholder's stock. The shareholder recognizes capital gain or loss measured by the difference between the amount received and the shareholder's basis in the stock.

Section 336

Gain or loss recognized on property distributed in complete liquidation

Section 336 generally requires a liquidating corporation to recognize gain or loss on the distribution of property in complete liquidation as if the property were sold to the distributee at fair market value. Loss-recognition is limited for distributions to related parties under Section 336(d).

Section 351

Transfer to corporation controlled by transferor

Section 351 generally provides nonrecognition treatment when one or more persons transfer property to a corporation solely in exchange for stock, and the transferors are in control (at least 80 percent) of the corporation immediately after the exchange. Boot in addition to stock can trigger partial recognition.

Section 368(a)

Definitions relating to corporate reorganizations

Section 368 defines the various types of tax-free reorganization (A through G) that qualify for nonrecognition under Section 354. Each type has specific statutory and regulatory requirements and continuity-of-interest and continuity-of-business-enterprise judicial doctrines.

Section 401(k)

Cash or deferred arrangements (401(k))

Section 401(k) allows employees to elect to defer current compensation into a qualified retirement plan on a pre-tax (or designated Roth) basis. Elective deferral limits are indexed annually ($23,000 in 2024, $30,500 with catch-up for age 50 and older).

Section 409A

Inclusion in gross income of deferred compensation under nonqualified deferred compensation plans

Section 409A imposes strict timing and election rules on nonqualified deferred compensation plans. Violations result in immediate income inclusion of all deferred amounts plus a 20 percent additional tax and interest at the underpayment rate plus 1 percent.

Section 441

Period for computation of taxable income

Section 441 establishes the annual accounting period (taxable year) used to compute taxable income. Taxpayers generally use the calendar year, but may use a fiscal year if they keep books on that basis, subject to limits in Sections 444 and 706 for certain entities.

Section 446

General rule for methods of accounting

Section 446(a) provides that taxable income is computed under the method of accounting on the basis of which the taxpayer regularly computes their income. Section 446(b) allows the IRS to require a different method if the taxpayer's method does not clearly reflect income.

Section 453

Installment method

Section 453 generally allows recognition of gain on installment sales over the years in which payments are received, rather than entirely in the year of sale. The method does not apply to dealer dispositions or to sales of inventory, marketable securities, or depreciable property to related parties.

Section 461(l)

General rule for taxable year of deduction

Section 461 governs the year for which deductions are taken. Section 461(l), added by TCJA, limits excess business losses for non-corporate taxpayers; disallowed losses carry forward as NOLs.

Section 469

Passive activity losses and credits limited

Section 469 generally limits a non-corporate taxpayer's deduction of passive activity losses and credits to the amount of passive activity income. Disallowed losses carry forward indefinitely and are released on the taxpayer's complete disposition of the activity to an unrelated party.

Section 475

Mark to market accounting method for dealers in securities

Section 475 requires dealers in securities to use a mark-to-market method of accounting for their securities inventory. Section 475(f) permits an election for traders in securities to also use mark-to-market treatment.

Section 482

Allocation of income and deductions among taxpayers

Section 482 authorizes the IRS to distribute, apportion, or allocate gross income, deductions, credits, and allowances between or among related parties to clearly reflect income or prevent tax evasion. The implementing regulations establish the transfer-pricing methodologies and arm's-length-principle framework.

Section 501(c)

Exemption from tax on corporations, certain trusts, etc.

Section 501(a) exempts from federal income tax organizations described in Section 501(c) or 501(d). Section 501(c)(3) is the most common category, covering religious, charitable, scientific, literary, educational, and certain other organizations that meet the operational and organizational tests.

Section 676

Power to revoke (grantor trust)

Section 676 treats the grantor as the owner of any portion of a trust over which the grantor has retained a power to revoke. The grantor is taxed on income, deductions, and credits attributable to that portion under the grantor-trust rules.

Section 691

Recipients of income in respect of decedents (IRD)

Section 691 governs the federal income tax treatment of income earned by a decedent that was not includible in the decedent's final return and is paid to a beneficiary or estate. IRD retains its character in the recipient's hands and does not receive a stepped-up basis under Section 1014.

Section 704(b)

Partner's distributive share

Section 704 governs how partnership items are allocated among partners. Section 704(b) allows partners to allocate items under the partnership agreement provided the allocations have substantial economic effect, and Section 704(c) requires special allocations for contributed property to account for built-in gains and losses.

Section 721

Nonrecognition of gain or loss on contribution

Section 721 generally provides nonrecognition treatment when a partner contributes property to a partnership in exchange for a partnership interest. There are important exceptions for transfers to investment partnerships and for the disguised-sale rules of Section 707(a)(2)(B).

Section 731

Extent of recognition of gain or loss on distribution

Section 731 governs taxation of partnership distributions. Distributions are generally nontaxable up to the partner's outside basis; cash distributions in excess of basis are taxable as capital gain. Special rules apply to distributions of marketable securities under Section 731(c).

Section 754

Manner of electing optional adjustment to basis of partnership property

Section 754 allows a partnership to elect to adjust the basis of partnership property on the transfer of a partnership interest (Section 743(b)) and on distributions (Section 734(b)). The election is binding for all future years unless revoked with IRS consent.

Section 831(b)

Tax on insurance companies other than life insurance companies

Section 831 governs taxation of property and casualty insurance companies. Section 831(b) provides an election for small insurance companies with annual premiums below a threshold to be taxed only on investment income. The IRS has scrutinized abusive micro-captive arrangements designated as transactions of interest.

Section 864

Definitions and special rules

Section 864 contains key definitions and special rules for determining sources of income and whether income is effectively connected with a U.S. trade or business.

Section 882(a)

Tax on income of foreign corporations connected with United States business

A foreign corporation engaged in trade or business within the United States is taxable on its taxable income that is effectively connected with the conduct of a trade or business within the United States.

Section 951

Amounts included in gross income of United States shareholders

Section 951 includes Subpart F income of a controlled foreign corporation in the gross income of its U.S. shareholders. Subpart F income includes specified categories of mobile income such as foreign personal holding company income and foreign base company sales and services income.

Section 951A

Global intangible low-taxed income (GILTI)

Section 951A includes global intangible low-taxed income (GILTI) in the gross income of U.S. shareholders of a controlled foreign corporation. GILTI generally equals net CFC tested income above a 10-percent return on qualified business asset investment (QBAI). Section 250 provides a partial deduction for corporate U.S. shareholders.

Section 954

Foreign base company income

Section 954 defines foreign base company income (FBCI), the category of Subpart F income consisting of foreign personal holding company income, foreign base company sales income, and foreign base company services income. Several exclusions (high-tax exception, active financing exception) narrow the scope.

Section 965

Treatment of deferred foreign income

Section 965, enacted by TCJA, required U.S. shareholders of certain foreign corporations to include in income their share of post-1986 accumulated deferred foreign earnings as a one-time transition tax. The headline rates were 15.5 percent for cash and equivalents and 8 percent for non-cash assets.

Section 988

Treatment of certain foreign currency transactions

Section 988 governs the U.S. tax treatment of foreign-currency-denominated transactions, generally treating gain or loss as ordinary income. An election under Section 988(a)(1)(B) is available for forward, futures, and option contracts in major currencies traded through regulated futures contracts to obtain Section 1256 capital-gain treatment.

Section 1001

Determination of amount of and recognition of gain or loss

Section 1001 provides the general rule for computing gain or loss on the disposition of property: amount realized minus adjusted basis. Section 1001(c) provides that recognized gain or loss is generally included in income except as otherwise provided in the Code.

Section 1014

Basis of property acquired from a decedent

Section 1014 establishes the so-called stepped-up basis rule for property acquired from a decedent. The basis of inherited property is generally the fair market value on the date of death (or alternate valuation date), eliminating the recipient's unrealized gain attributable to the decedent's holding period.

Section 1031

Exchange of real property held for productive use or investment

Section 1031 provides nonrecognition treatment for exchanges of real property held for productive use in a trade or business or for investment. TCJA eliminated Section 1031 treatment for personal property, leaving only real property exchanges qualifying for like-kind exchange treatment.

Section 1202

Partial exclusion for gain from certain small business stock

Section 1202 allows a non-corporate taxpayer to exclude up to 100 percent of gain on the sale of qualified small business stock held for more than five years, subject to a per-issuer limit equal to the greater of $10 million or 10 times the taxpayer's basis in the stock.

Section 1222

Other terms relating to capital gains and losses

Section 1222 defines various capital-gain and capital-loss concepts, including short-term capital gain, long-term capital gain, and net capital gain. Long-term treatment requires the asset to be held for more than one year.

Section 1341

Computation of tax where taxpayer restores substantial amount held under claim of right

Section 1341 provides a tax computation benefit when a taxpayer who previously included an amount in gross income under a claim of right is later required to return all or part of it. The taxpayer may compute tax in the year of repayment using the more favorable of two methods.

Section 1366

Pass-thru of items to shareholders

Section 1366 passes the items of income, loss, deduction, and credit of an S corporation through to its shareholders pro rata. Shareholder basis under Section 1367 must be tracked to determine the deductibility of losses and the tax-free nature of distributions.

Section 1411

Imposition of tax (net investment income tax)

Section 1411 imposes a 3.8 percent net investment income tax on individuals, estates, and trusts with modified adjusted gross income above $200,000 single / $250,000 joint. The tax applies to the lesser of net investment income or MAGI in excess of the threshold.

Section 1441(a)

Withholding of tax on nonresident aliens

Section 1441 is the core U.S. withholding rule for many payments of U.S.-source fixed or determinable income to nonresident alien individuals and certain foreign partnerships. In the baseline case, the withholding agent must deduct and withhold 30 percent unless an exception, effectively connected income rule, or treaty-backed reduction applies.

Section 1442(a)

Withholding of tax on foreign corporations

Section 1442 applies the chapter 3 withholding regime to foreign corporations receiving U.S.-source fixed or determinable income that is not effectively connected with a U.S. trade or business. In practice, it works alongside section 1441 and the W-8 / Form 1042-S documentation chain.

Section 1446(a)

Withholding of tax on foreign partners' share of effectively connected income

Section 1446 requires partnerships with effectively connected taxable income allocable to foreign partners to pay withholding tax under rules prescribed by the Secretary. It also includes the modern withholding framework for certain dispositions of partnership interests under subsection (f).

Section 2031

Definition of gross estate

Section 2031(a) defines the gross estate for federal estate tax purposes as the value of all property owned by the decedent at death. Section 2031(b) provides special rules for valuing stock and securities, and the regulations under Section 20.2031-1 give the general fair-market-value standard.

Section 2032

Alternate valuation

Section 2032 allows an executor to elect to value the gross estate as of the date six months after the decedent's death (alternate valuation date) instead of the date of death. The election is available only if it decreases the value of the gross estate AND decreases the federal estate-tax liability.

Section 3121

Definitions (FICA - Social Security and Medicare)

Section 3121 provides the definitions used for Federal Insurance Contributions Act (FICA) purposes, including the definitions of 'wages' and 'employment.' The student exception in Section 3121(b)(10) excludes services performed in the employ of a school by a student enrolled and regularly attending classes.

Section 3401(a)

Definitions (wages)

Section 3401(a) defines wages for federal income-tax withholding purposes. The definition is broad and includes most cash and non-cash payments by employers, with specific exclusions for de minimis fringe benefits and certain pre-tax retirement plan contributions.

Section 3406

Backup withholding

Section 3406 requires backup withholding at 24 percent (post-TCJA rate) on reportable payments when a payee fails to provide a TIN, provides an incorrect TIN, or has been notified of underreporting.

Section 6011

General requirement of return, statement, or list

Section 6011 imposes the general requirement to file federal tax returns. Section 6011(a) requires returns 'when required' by IRS regulations; section 6011(e) authorizes IRS to require electronic filing in specified circumstances.

Section 6038A

Information with respect to certain foreign-owned corporations

This section requires specified reporting corporations to furnish information with respect to related parties and transactions and to maintain records as the Secretary may prescribe.

Section 6114

Treaty-based return positions

Section 6114 requires disclosure when a taxpayer takes the position that a U.S. treaty overrules or otherwise modifies an internal revenue law of the United States. In practical terms, this is the Code hook behind Form 8833 and many treaty-disclosure questions faced by cross-border taxpayers.

Section 6330

Notice and opportunity for hearing before levy (Collection Due Process)

Section 6330 provides procedural rights to taxpayers before the IRS levies on property to collect tax. A taxpayer may request a Collection Due Process hearing and petition the Tax Court for review within 30 days of the determination. The Supreme Court held the 30-day deadline is non-jurisdictional and subject to equitable tolling in Boechler v. Commissioner (2022).

Section 6501

Limitations on assessment and collection

Section 6501 generally requires the IRS to assess tax within three years after the return is filed. Section 6501(e)(1) extends the period to six years for substantial omissions of income; the Supreme Court held in United States v. Home Concrete & Supply LLC (2012) that an overstatement of basis is not an omission for purposes of this rule.

Section 6662

Imposition of accuracy-related penalty on underpayments

Section 6662 imposes a 20 percent accuracy-related penalty on underpayments attributable to negligence, substantial understatement, substantial valuation misstatement, or transfer-pricing adjustments. Section 6662(h) raises the penalty to 40 percent in gross-valuation-misstatement cases.

Section 7421

Prohibition of suits to restrain assessment or collection (Anti-Injunction Act)

Section 7421(a), the Anti-Injunction Act, bars suits to restrain the assessment or collection of any tax. Limited exceptions exist for certain pre-enforcement proceedings authorized elsewhere in the Code, and the Supreme Court has clarified the scope of the AIA in CIC Services v. IRS (2021).

Section 7701(a)

Definitions

Section 7701 is the Internal Revenue Code's general definitions section. For cross-border planning, the most practical parts are the rules defining when a corporation is domestic or foreign and the broader meaning assigned to key tax terms throughout the Code.

Important disclaimer

This library is for general tax education only. Always verify filing obligations, due dates, and tax consequences against the cited primary source or with a qualified tax professional.