[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: 26CFR1.552-2]

[Page 286]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.552-2  Gross income requirement.

    (a) To meet the gross income requirement, it is necessary that 
either of the following percentages of gross income of the corporation 
for the taxable year (including the additions to gross income provided 
in section 555(b) as required by section 555(c)(2)) be foreign personal 
holding company income as defined in section 553:
    (1) 60 percent or more; or
    (2) 50 percent or more if the foreign corporation has been 
classified as a foreign personal holding company for any taxable year 
ending after August 26, 1937, unless:
    (i) A taxable year has intervened since the last taxable year for 
which it was so classified, during no part of which the stock ownership 
requirement specified in section 552(a)(2) exists; or
    (ii) Three consecutive years have intervened since the last taxable 
year for which it was so classified, during each of which its foreign 
personal holding company income was less than 50 percent of its gross 
income.
    (b) In determining whether the foreign personal holding company 
income is equal to the required percentage of the total gross income, 
the determination must not be made upon the basis of gross receipts, 
since gross income is not synonymous with gross receipts. For meaning of 
gross income in this part, see section 555 and Sec. 1.555-1.