26 U.S.C. § 1374 — Tax imposed on certain built-in gains
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> Official source: https://uscode.house.gov/quicksearch/get.plx?title=26§ion=1374 — Internal Revenue Code text as published by the U.S. House Office of the Law Revision Counsel, USLM bulk release point 119-102, retrieved 2026-09-09. Cite as: IRC § 1374. **Statutory text only** — editorial notes, amendment history and effective-date notes are omitted; confirm currency for amendments after the release point.
(a) General rule If for any taxable year beginning in the recognition period an S corporation has a net recognized built-in gain, there is hereby imposed a tax (computed under subsection (b)) on the income of such corporation for such taxable year.
(b) Amount of tax › (1) In general The amount of the tax imposed by subsection (a) shall be computed by applying the highest rate of tax specified in section 11(b) to the net recognized built-in gain of the S corporation for the taxable year.
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