Sec. 1383. Computation of tax where cooperative redeems
nonqualified written notices of allocation or nonqualified
per-unit retain certificates
TITLE 26,
Subtitle A,
CHAPTER 1,
Subchapter T,
PART I,
Sec. 1383
STATUTE
- (a)
- General rule
If, under section 1382(b)(2) or (4), or (c)(2)(B), a deduction is
allowable to an organization for the taxable year for amounts paid
in redemption of nonqualified written notices of allocation or
non-qualified per-unit retain certificates, then the tax imposed by
this chapter on such organization for the taxable year shall be the
lesser of the following:
- (1)
- the tax for the taxable year computed with such deduction;
or
- (2)
- an amount equal to -
- (A)
- the tax for the taxable year computed without such
deduction, minus
- (B)
- the decrease in tax under this chapter for any prior
taxable year (or years) which would result solely from treating
such nonqualified written notices of allocation or nonqualified
per-unit retain certificates as qualified written notices of
allocation or qualified per-unit retain certificates (as the
case may be).
- (b)
- Special rules
- (1)
- If the decrease in tax ascertained under subsection (a)(2)(B)
exceeds the tax for the taxable year (computed without the
deduction described in subsection (a)) such excess shall be
considered to be a payment of tax on the last day prescribed by law
for the payment of tax for the taxable year, and shall be refunded
or credited in the same manner as if it were an overpayment for
such taxable year.
- (2)
- For purposes of determining the decrease in tax under
subsection (a)(2)(B), the stated dollar amount of any nonqualified
written notice of allocation or nonqualified per-unit retain
certificate which is to be treated under such subsection as a
qualified written notice of allocation or qualified per-unit retain
certificate (as the case may be) shall be the amount paid in
redemption of such written notice of allocation or per-unit retain
certificate which is allowable as a deduction under section
1382(b)(2) or (4), or (c)(2)(B) for the taxable year.
- (3)
- If the tax imposed by this chapter for the taxable year is
the amount determined under subsection (a)(2), then the deduction
described in subsection (a) shall not be taken into account for any
purpose of this subtitle other than for purposes of this section.
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AMENDMENTS
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