[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: 26CFR1.553-1]

[Page 288-289]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.553-1  Foreign personal holding company income.

    Foreign personal holding company income shall consist of the items 
defined under section 543 and Sec. Sec. 1.543-1 and 1.543-2, relating 
to personal holding company income, with the following exceptions:
    (a) The entire amount received as interest, whether or not treated 
as rent, shall be considered to be foreign personal holding company 
income. Thus, the exception in the second sentence of section 543(a)(1) 
and paragraph (b)(2) of Sec. 1.543-1 (relating to interest treated as 
rent under section 543(a)(7) and paragraph (b)(10) of Sec. 1.543-1), is 
inapplicable for the purpose of determining foreign personal holding 
company income. Similarly, section 543(a)(7) and paragraph (b)(10) of 
Sec. 1.543-1 are applied for this purpose without regard to the 
interest described in that section.
    (b)(1) The entire amount received as royalties, whether or not 
mineral, oil, or gas royalties, or copyright royalties, shall be 
considered to be foreign personal holding company income. Thus, 
subparagraphs (A) and (B) of section 543(a)(8) and paragraph (b)(11)(i) 
(a) and (b) of Sec. 1.543-1 (relating to mineral, oil, or gas 
royalties), and subparagraphs (A), (B), and (C) of section 543(a)(9) and 
paragraph (b) (12)(ii) of Sec. 1.543-1 (relating to copyright 
royalties), are inapplicable for the purpose of determining foreign 
personal holding company income.
    (2) In computing foreign personal holding company income, the first 
sentence of paragraph (b)(11)(ii) of Sec. 1.543-1 shall apply to 
overriding royalties received from the sublessee by the operating 
company which originally leased and developed the natural resource

[[Page 289]]

property in respect of which such overriding royalties are paid, and to 
mineral, oil, or gas production payments, only with respect to amounts 
received after September 30, 1958.

[T.D. 6500, 25 FR 11737, Nov. 26, 1960, as amended by T.D. 6739, 29 FR 
7715, June 17, 1964]