26 U.S.C. § 564 : US Code - Section 564: Dividend carryover

Search 26 U.S.C. § 564 : US Code - Section 564: Dividend carryover

(a) General rule
For purposes of computing the dividends paid deduction under
section 561, in the case of a personal holding company the dividend
carryover for any taxable year shall be the dividend carryover to
such taxable year, computed as provided in subsection (b), from the
two preceding taxable years.
(b) Computation of dividend carryover
The dividend carryover to the taxable year shall be determined as
follows:
(1) For each of the 2 preceding taxable years there shall be
determined the taxable income computed with the adjustments
provided in section 545 (whether or not the taxpayer was a
personal holding company for either of such preceding taxable
years), and there shall also be determined for each such year the
deduction for dividends paid during such year as provided in
section 561 (but determined without regard to the dividend
carryover to such year).
(2) There shall be determined for each such taxable year
whether there is an excess of such taxable income over such
deduction for dividends paid or an excess of such deduction for
dividends paid over such taxable income, and the amount of each
such excess.
(3) If there is an excess of such deductions for dividends paid
over such taxable income for the first preceding taxable year,
such excess shall be allowed as a dividend carryover to the
taxable year.
(4) If there is an excess of such deduction for dividends paid
over such taxable income for the second preceding taxable year,
such excess shall be reduced by the amount determined in
paragraph (5), and the remainder of such excess shall be allowed
as a dividend carryover to the taxable year.
(5) The amount of the reduction specified in paragraph (4)
shall be the amount of the excess of the taxable income, if any,
for the first preceding taxable year over such deduction for
dividends paid, if any, for the first preceding taxable year.