370
INTERNAL REVENUE CODE OF 1954
(1) Stock possessing at least 80 percent of the voting power of all classes of stock and at least 80 percent of each class of the nonvoting stock of each of the includible corporations (except the common parent corporation) is owned directly by one or more of the other includible corporations; and (2) The common parent corporation owns directly stock possessing at least 80 percent of the voting power of all classes of stock and at least 80 percent of each class of the nonvoting stock of at least one of the other includible corporations. As used in this subsection, the term "stock" does not include nonvoting stock which is limited and preferred as to dividends. (b) DEFINITION OF "INCLUDIBLE CORPORATION".—As used in this chapter, the term "includible corporation" means any corporation except— (1) Corporations exempt from taxation under section 501. (2) Insurance companies subject to taxation under section 802 or 821. (3) Foreign corporations. (4) Corporations entitled to the benefits of section 931, by reason of receiving a large percentage of their income from sources within possessions of the United States. (5) Corporations organized under the China Trade Act, 1922. (6) Regulated investment companies subject to tax under subchapter M of chapter 1. (7) Unincorporated business enterprises subject to tax as corporations under section 1361. (c) INCLUDIBLE INSURANCE COMPANIES.—Despite the provisions of paragraph (2) of subsection (b), two or more domestic insurance companies each of which is subject to taxation under the same section of this subtitle shall be considered as includible corporations for the purpose of the application of subsection (a) to such insurance companies alone. (d) SUBSIDIARY FORMED TO COMPLY W I T H FOREIGN L A W, — I n the
case of a domestic corporation owning or controlling, directly or indirectly, 100 percent of the capital stock (exclusive of directors' qualifying shares) of a corporation organized under the laws of a contiguous foreign country and maintained solely for the purpose of complying with the laws of such country as to title and operation of property, such foreign corporation may, at the option of the domestic corporation, be treated for the purpose of this subtitle as a domestic corporation. SEC. 1505. CROSS REFERENCES. (1) For suspension of running of statute of limitations when notice in respect of a deficiency is mailed to one corporation, see section 6503 (a)(1). (2) For allocation of income and deductions of related trades or businesses, see section 482.
§ 1504(a)(1)
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