[Code of Federal Regulations]
[Title 26, Volume 7]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.535-1]

[Page 245-246]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.535-1  Definition.

    (a) The accumulated earnings tax is imposed by section 531 on the 
accumulated taxable income. Accumulated taxable income is the taxable 
income of the corporation with the adjustments prescribed by section 
535(b) and Sec. 1.535-2, minus the sum of the dividends paid deduction 
and the accumulated earnings credit. See section 561 and the regulations 
thereunder, relating to the definition of the deduction for dividends 
paid, and section 535(c) and Sec. 1.535-3, relating to the accumulated 
earnings credit.
    (b) In the case of a foreign corporation, whether resident or 
nonresident, which files or causes to be filed a return, the accumulated 
taxable income shall be the taxable income from sources within the 
United States with the adjustments prescribed by section 535(b) and 
Sec. 1.535-2 minus the sum of the dividends paid deduction and the 
accumulated earnings credit. In the case of a foreign corporation which 
files no return, the accumulated taxable income shall be the gross 
income from sources

[[Page 246]]

within the United States without allowance of any deductions (including 
the accumulated earnings credit).

[T.D. 6500, 25 FR 11737, Nov. 26, 1960, as amended by T.D. 7244, 37 FR 
28897, Dec. 30, 1972]