[Code of Federal Regulations] [Title 26, Volume 13] [Revised as of April 1, 2004] From the U.S. Government Printing Office via GPO Access [CITE: 26CFR] [Page 19-20] TITLE 26--INTERNAL REVENUE CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY (CONTINUED) RELATED RULES--Table of Contents Sec. 1.1561-1 Limitations on certain multiple tax benefits in the case of certain controlled corporations. (a) In general. Part II (section 1561 and following), subchapter B, chapter 6 of the Code, provides rules relating to certain controlled corporations. In general, section 1561 provides that the component members of a controled group of corporations on a December 31, for their taxable years which include such December 31, shall be limited for purposes of subtitle A to: (1) One surtax exemption under section 11(d), (2) One $150,000 amount for purposes of computing the accumlated earnings credit under section 535(c) (2) and (3), and (3) One $25,000 amount for purposes of computing the limitation on the small business deduction of life insurance companies under sections 804(a)(4) and 809 (d)(10). [[Page 20]] For certain definitions (including the definition of a ``controlled group of corporations'' and a ``component member'') and special rules for purposes of part II of subchapter B, see section 1563 and the regulations thereunder. (b) Tax avoidance. The provisions of part II, subchapter B, chapter 6 do not delimit or abrogate any principle of law established by judicial decision, or any existing provisions of the code, such as sections 269, 482, and 1551, which have the effect of preventing the avoidance or evasion of income taxes. (c) Special rules. (1) For purposes of sections 1561 and 1563 and the regulations thereunder, the term ``corporation'' includes an electing small business corporation (as defined in section 1371 (b)). However, for the treatment of an electing small business corporation as an excluded member of a controlled group of corporations, see paragraph (b)(2)(ii) of Sec. 1.1563-1. (2) In the case of corporations electing a 52-53-week taxable year under section 441(f)(1), the provisions of sections 1561 and 1563 and the regulations thereunder shall be applied in accordance with the special rule section 441(f)(2)(A). See Sec. 1.441-2. [T.D. 7528, 42 FR 64694, Dec. 28, 1977, as amended by T.D. 8996, 67 FR 35012, May 17, 2002]