---
kind: "section"
citation: "26 U.S.C. § 997"
title: "26"
title_heading: "Internal Revenue Code"
number: "997"
heading: "Special subchapter C rules"
release: "119-102"
url: "https://uscodex.org/usc/26/997"
units:
  - "Subtitle A — Income Taxes"
  - "Chapter 1 — Normal Taxes and Surtaxes"
  - "Subchapter N — Tax Based on Income From Sources Within or Without the United States"
  - "Part IV — Domestic International Sales Corporations"
  - "Subpart B — Treatment of Distributions to Shareholders"
---

# §997. Special subchapter C rules


For purposes of applying the provisions of subchapter C of [chapter 1](/usc/26/chstA-ch1.md), any distribution in [property](/usc/26/614.md?p=a) to a [corporation](/usc/26/7701.md?p=a-3) by a [DISC](/usc/26/992.md?p=a-1) or [former DISC](/usc/26/992.md?p=a-3) which is made out of previously taxed income or accumulated [DISC](/usc/26/992.md?p=a-1) income shall—

- (1) be treated as a distribution in the same amount as if such [distribution of property](/usc/26/316.md?p=b-2-B) were made to an individual, and
- (2) have a basis, in the hands of the recipient [corporation](/usc/26/7701.md?p=a-3), equal to the amount determined under [paragraph (1)](#1).

## Source credit

(Added Pub. L. 92–178, title V, § 501, Dec. 10, 1971, 85 Stat. 549.)