---
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"
date: "2026-07-12"
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/26/317.md?p=a) to a corporation by a DISC or former DISC which is made out of previously taxed income or accumulated DISC 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, 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.)