---
kind: "section"
citation: "26 U.S.C. § 247"
title: "26"
title_heading: "Internal Revenue Code"
number: "247"
heading: "Contributions to Alaska Native Settlement Trusts"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/26/247"
units:
  - "Subtitle A — Income Taxes"
  - "Chapter 1 — Normal Taxes and Surtaxes"
  - "Subchapter B — Computation of Taxable Income"
  - "Part VIII — Special Deductions for Corporations"
---

# §247. Contributions to Alaska Native Settlement Trusts

- (a) **In general—** In the case of a Native Corporation, there shall be allowed a deduction for any contributions made by such Native Corporation to a Settlement Trust (regardless of whether an election under [section 646](/usc/26/646.md) is in effect for such Settlement Trust) for which the Native Corporation has made an annual election under [subsection (e)](#e).
- (b) **Amount of deduction—** The amount of the deduction under [subsection (a)](#a) shall be equal to—
  - (1) in the case of a [cash](/usc/26/856.md?p=c-5-K) contribution (regardless of the method of payment, including currency, coins, money order, or check), the amount of such contribution, or
  - (2) in the case of a contribution not described in [paragraph (1)](#b-1), the lesser of—
    - (A) the Native Corporation’s adjusted basis in the [property](/usc/26/317.md?p=a) contributed, or
    - (B) the fair market [value](/usc/26/851.md?p=c-4) of the [property](/usc/26/317.md?p=a) contributed.
- (c) **Limitation and carryover—**
  - (1) **In general—** Subject to [paragraph (2)](#c-2), the deduction allowed under [subsection (a)](#a) for any taxable year shall not exceed the [taxable income](/usc/26/63.md?p=a) (as determined without regard to such deduction) of the Native Corporation for the taxable year in which the contribution was made.
  - (2) **Carryover—** If the aggregate amount of contributions described in [subsection (a)](#a) for any taxable year exceeds the limitation under [paragraph (1)](#c-1), such excess shall be treated as a contribution described in [subsection (a)](#a) in each of the 15 succeeding years in order of time.
- (d) **Definitions—** For purposes of this section, the terms “Native Corporation” and “Settlement Trust” have the same meaning given such terms under [section 646(h)](/usc/26/646.md?p=h).
- (e) **Manner of making election—**
  - (1) **In general—** For each taxable year, a Native Corporation may elect to have this section apply for such taxable year on the income tax return or an amendment or supplement to the return of the Native Corporation, with such election to have effect solely for such taxable year.
  - (2) **Revocation—** Any election made by a Native Corporation pursuant to this subsection may be revoked pursuant to a timely filed amendment or supplement to the income tax return of such Native Corporation.
- (f) **Additional rules—**
  - (1) **Earnings and profits—** Notwithstanding [section 646(d)(2)](/usc/26/646.md?p=d-2), in the case of a Native Corporation which claims a deduction under this section for any taxable year, the earnings and profits of such Native Corporation for such taxable year shall be reduced by the amount of such deduction.
  - (2) **Gain or loss—** No gain or loss shall be recognized by the Native Corporation with respect to a contribution of [property](/usc/26/317.md?p=a) for which a deduction is allowed under this section.
  - (3) **Income—** Subject to [subsection (g)](#g), a Settlement Trust shall include in income the amount of any deduction allowed under this section in the taxable year in which the Settlement Trust actually receives such contribution.
  - (4) **Period—** The holding period under [section 1223](/usc/26/1223.md) of the Settlement Trust shall include the period the [property](/usc/26/317.md?p=a) was held by the Native Corporation.
  - (5) **Basis—** The basis that a Settlement Trust has for which a deduction is allowed under this section shall be equal to the lesser of—
    - (A) the adjusted basis of the Native Corporation in such [property](/usc/26/317.md?p=a) immediately before such contribution, or
    - (B) the fair market [value](/usc/26/851.md?p=c-4) of the [property](/usc/26/317.md?p=a) immediately before such contribution.
  - (6) **Prohibition—** No deduction shall be allowed under this section with respect to any contributions made to a Settlement Trust which are in violation of subsection [(a)(2)](/usc/26/39.md?p=a-2) or [(c)(2)](/usc/26/39.md) of section 39 of the Alaska Native Claims Settlement Act ([43 U.S.C. 1629e](/usc/43/1629e.md)).
- (g) **Election by Settlement Trust to defer income recognition—**
  - (1) **In general—** In the case of a contribution which consists of [property](/usc/26/317.md?p=a) other than [cash](/usc/26/856.md?p=c-5-K), a Settlement Trust may elect to defer recognition of any income related to such [property](/usc/26/317.md?p=a) until the [sale or exchange](/usc/26/864.md?p=c-8-D) of such [property](/usc/26/317.md?p=a), in whole or in part, by the Settlement Trust.
  - (2) **Treatment—** In the case of [property](/usc/26/317.md?p=a) described in [paragraph (1)](#g-1), any income or gain realized on the [sale or exchange](/usc/26/864.md?p=c-8-D) of such [property](/usc/26/317.md?p=a) shall be treated as—
    - (A) for such amount of the income or gain as is equal to or less than the amount of income which would be included in income at the time of contribution under [subsection (f)(3)](#f-3) but for the [taxpayer](/usc/26/1313.md?p=b)’s election under this subsection, ordinary income, and
    - (B) for any amounts of the income or gain which are in excess of the amount of income which would be included in income at the time of contribution under [subsection (f)(3)](#f-3) but for the [taxpayer](/usc/26/1313.md?p=b)’s election under this subsection, having the same character as if this subsection did not apply.
  - (3) **Election—**
    - (A) **In general—** For each taxable year, a Settlement Trust may elect to apply this subsection for any [property](/usc/26/317.md?p=a) described in [paragraph (1)](#g-1) which was contributed during such year. Any [property](/usc/26/317.md?p=a) to which the election applies shall be identified and described with reasonable particularity on the income tax return or an amendment or supplement to the return of the Settlement Trust, with such election to have effect solely for such taxable year.
    - (B) **Revocation—** Any election made by a Settlement Trust pursuant to this subsection may be revoked pursuant to a timely filed amendment or supplement to the income tax return of such Settlement Trust.
    - (C) **Certain dispositions—**
      - (i) **In general—** In the case of any [property](/usc/26/317.md?p=a) for which an election is in effect under this subsection and which is disposed of within the first taxable year subsequent to the taxable year in which such [property](/usc/26/317.md?p=a) was contributed to the Settlement Trust—
        - (I) this section shall be applied as if the election under this subsection had not been made,
        - (II) any income or gain which would have been included in the year of contribution under [subsection (f)(3)](#f-3) but for the [taxpayer](/usc/26/1313.md?p=b)’s election under this subsection shall be included in income for the taxable year of such contribution, and
        - (III) the Settlement Trust shall pay any increase in tax resulting from such inclusion, including any applicable [interest](/usc/26/856.md?p=f-1), and increased by 10 percent of the amount of such increase with [interest](/usc/26/856.md?p=f-1).
      - (ii) **Assessment—** Notwithstanding [section 6501(a)](/usc/26/6501.md?p=a), any amount described in [subclause (III)](#g-3-C-i-III) of clause (i) may be assessed, or a proceeding in court with respect to such amount may be initiated without assessment, within 4 years after the date on which the return making the election under this subsection for such [property](/usc/26/317.md?p=a) was filed.

## Source credit

(Added Pub. L. 115–97, title I, § 13821(b)(1), Dec. 22, 2017, 131 Stat. 2179.)

## Notes

### Editorial Notes

### Prior Provisions

A prior section 247, Aug. 16, 1954, ch. 736, 68A Stat. 75; Pub. L. 94–455, title XIX, § 1901(a)(35), Oct. 4, 1976, 90 Stat. 1770; Pub. L. 95–600, title III, § 301(b)(4), Nov. 6, 1978, 92 Stat. 2820; Pub. L. 101–508, title XI, § 11801(c)(8)(C), Nov. 5, 1990, 104 Stat. 1388–524; Pub. L. 104–188, title I, § 1704(t)(49), Aug. 20, 1996, 110 Stat. 1890; Pub. L. 109–135, title IV, § 402(a)(5), Dec. 21, 2005, 119 Stat. 2610, allowed to public utilities as a deduction a percentage of the amount of the lesser of dividends paid during the taxable year on its preferred stock or taxable income for the taxable year under certain conditions, prior to repeal by Pub. L. 113–295, div. A, title II, § 221(a)(41)(A), Dec. 19, 2014, 128 Stat. 4043.

### Statutory Notes and Related Subsidiaries

### Effective Date

Pub. L. 115–97, title I, § 13821(b)(3), Dec. 22, 2017, 131 Stat. 2181, provided that: In general.—The amendments made by this subsection [enacting this section] shall apply to taxable years for which the period of limitation on refund or credit under section 6511 of the Internal Revenue Code of 1986 has not expired. One-year waiver of statute of limitations.—If the period of limitation on a credit or refund resulting from the amendments made by paragraph (1) expires before the end of the 1-year period beginning on the date of the enactment of this Act [Dec. 22, 2017], refund or credit of such overpayment (to the extent attributable to such amendments) may, nevertheless, be made or allowed if claim therefor is filed before the close of such 1-year period.”