[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: 26CFR1.542-2]

[Page 255]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.542-2  Gross income requirement.

    To meet the gross income requirement it is necessary that at least 
80 percent of the total gross income of the corporation for the taxable 
year be personal holding company income as defined in section 543 and 
Sec. Sec. 1.543-1 and 1.543-2. For the definition of gross income see 
section 61 and Sec. Sec. 1.61-1 through 1.61-14. Under such provisions 
gross income is not necessarily synonymous with gross receipts. Further, 
in the case of transactions in stocks and securities and in commodities 
transactions, gross income for personal holding company tax purposes 
shall include only the excess of gains over losses from such 
transactions. See section 543(b), paragraph (b) (5) and (6) of Sec. 
1.543-1 and Sec. 1.543-2. For determining the character of the amount 
includible in gross income under section 951(a), see paragraph (a) of 
Sec. 1.951-1.

[T.D. 6500, 25 FR 11737, Nov. 26, 1960, as amended by T.D. 6795, 30 FR 
934, Jan. 29, 1965]