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Includible Corporation: Key Insights into Its Legal Definition
Definition & Meaning
An includible corporation refers to any corporation that is not exempt from federal income tax. According to the Internal Revenue Code, this term specifically excludes certain types of corporations, such as those exempt under section 501, insurance companies taxed under section 801, foreign corporations, and others. In essence, an includible corporation is subject to the rules and regulations governing corporate income tax in the United States.
Table of content
Legal Use & context
The term "includible corporation" is primarily used in tax law, particularly in the context of consolidated tax returns. It is important for corporations that are part of a group filing taxes together, as it determines which entities must report their income and losses. Understanding this term is essential for businesses looking to comply with tax regulations and for tax professionals assisting clients in navigating corporate tax obligations.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
For instance, a domestic manufacturing corporation that does not qualify for any tax exemptions is considered an includible corporation. Conversely, a nonprofit organization recognized under section 501 would not be includible as it is exempt from federal income tax.
Relevant laws & statutes
The primary statute governing includible corporations is found in the Internal Revenue Code, specifically:
26 USCS § 1504 - Definitions related to consolidated returns.
26 USCS § 501 - Exempt organizations.
26 USCS § 801 - Taxation of insurance companies.
Comparison with related terms
Term
Definition
Exempt Corporation
A corporation that is not subject to federal income tax under specific sections of the Internal Revenue Code.
S Corporation
A special type of corporation that passes income directly to shareholders to avoid double taxation.
Foreign Corporation
A corporation that is incorporated outside the United States and is not subject to U.S. federal income tax in the same manner as domestic corporations.
Common misunderstandings
What to do if this term applies to you
If you are operating a corporation and are unsure whether it qualifies as an includible corporation, it is advisable to consult with a tax professional. They can help you determine your corporation's tax obligations and ensure compliance with federal tax laws. Additionally, users can explore US Legal Forms' ready-to-use legal form templates for assistance with tax filings and corporate governance.
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