U.S. Code > Title 26 Internal Revenue Code > Subtitle A—Income Taxes (§§ 1—1564) > CHAPTER 6—CONSOLIDATED RETURNS (§§ 1501—1564) > Subchapter B—Related Rules (§§ 1551—1564) > PART II—CERTAIN CONTROLLED CORPORATIONS (§§ 1561—1564) > § 1561. Limitations on certain multiple tax benefits in the case of certain controlled corporations

§ 1561. Limitations on certain multiple tax benefits in the case of certain controlled corporations

(a) General rule
The component members of a controlled group of corporations on a December 31 shall, for their taxable years which include such December 31, be limited for purposes of this subtitle to—
(1) amounts in each taxable income bracket in the tax table in section 11 (b)(1) which do not aggregate more than the maximum amount in such bracket to which a corporation which is not a component member of a controlled group is entitled,
(2) one $250,000 ($150,000 if any component member is a corporation described in section 535 (c)(2)(B)) amount for purposes of computing the accumulated earnings credit under section 535 (c)(2) and (3),
(3) one $40,000 exemption amount for purposes of computing the amount of the minimum tax, and
(4) one $2,000,000 amount for purposes of computing the tax imposed by section 59A.
The amounts specified in paragraph (1), the amount specified in paragraph (3), and the amount specified in paragraph (4) shall be divided equally among the component members of such group on such December 31 unless all of such component members consent (at such time and in such manner as the Secretary shall by regulations prescribe) to an apportionment plan providing for an unequal allocation of such amounts. The amounts specified in paragraph (2) shall be divided equally among the component members of such group on such December 31 unless the Secretary prescribes regulations permitting an unequal allocation of such amounts. Notwithstanding paragraph (1), in applying the last 2 sentences of section 11 (b)(1) to such component members, the taxable income of all such component members shall be taken into account and any increase in tax under such last 2 sentences shall be divided among such component members in the same manner as amounts under paragraph (1). In applying section 55 (d)(3), the alternative minimum taxable income of all component members shall be taken into account and any decrease in the exemption amount shall be allocated to the component members in the same manner as under paragraph (3).
(b) Certain short taxable years
If a corporation has a short taxable year which does not include a December 31 and is a component member of a controlled group of corporations with respect to such taxable year, then for purposes of this subtitle—
(1) the amount in each taxable income bracket in the tax table in section 11 (b), and
(2) the amount to be used in computing the accumulated earnings credit under section 535 (c)(2) and (3),
of such corporation for such taxable year shall be the amount specified in subsection (a)(1) or (2), as the case may be, divided by the number of corporations which are component members of such group on the last day of such taxable year. For purposes of the preceding sentence, section 1563 (b) shall be applied as if such last day were substituted for December 31.