# 26 U.S.C. § 542: Definition of personal holding company

> Federal · Statutes · In force

URL: https://www.frixlaw.com/law-library/statutes/usc_t26_s542

## Section

- **Citation:** 26 U.S.C. § 542
- **Heading:** Definition of personal holding company
- **Jurisdiction:** Federal
- **Kind:** Statutes
- **Status:** In force
- **Text as of:** September 16, 2026
- **Source:** Publisher's official text
- **Location:** Title 26—INTERNAL REVENUE CODE > Subtitle A—Income Taxes > CHAPTER 1—NORMAL TAXES AND SURTAXES > Subchapter G—Corporations Used to Avoid Income Tax on Shareholders > PART II—PERSONAL HOLDING COMPANIES

## Text

At least 60 percent of its adjusted ordinary gross income (as defined in section 543(b)(2)) for the taxable year is personal holding company income (as defined in section 543(a)), and

( Aug. 16, 1954, ch. 736 , 68A Stat. 182 ; ch. 871, § 3, Aug. 12, 1955 , 69 Stat. 718 ; Pub. L. 86–376, § 3(a) , Sept. 23, 1959 , 73 Stat. 700 ; Pub. L. 87–768, § 1 , Oct. 9, 1962 , 76 Stat. 766 ; Pub. L. 88–272, title II, § 225(b) , (c), (k)(1), Feb. 26, 1964 , 78 Stat. 79 , 93; Pub. L. 89–809, title I, § 104(h)(1) , Nov. 13, 1966 , 80 Stat. 1559 ; Pub. L. 91–172, title I, § 101(j)(16) , Dec. 30, 1969 , 83 Stat. 528 ; Pub. L. 93–480, § 3(a) , Oct. 26, 1974 , 88 Stat. 1454 ; Pub. L. 94–455, title XIX, § 1901(a)(76) , Oct. 4, 1976 , 90 Stat. 1777 ; Pub. L. 96–589, § 5(a) , Dec. 24, 1980 , 94 Stat. 3405 ; Pub. L. 97–248, title II, § 293(a) –(c), Sept. 3, 1982 , 96 Stat. 575 ; Pub. L. 98–369, div. A, title II, § 211(b)(7) , July 18, 1984 , 98 Stat. 755 ; Pub. L. 99–514, title XII, § 1235(f)(2) , Oct. 22, 1986 , 100 Stat. 2575 ; Pub. L. 105–34, title XI, § 1122(d)(1) , Aug. 5, 1997 , 111 Stat. 977 ; Pub. L. 108–357, title IV, § 413(b)(1) , Oct. 22, 2004 , 118 Stat. 1506 ; Pub. L. 115–141, div. U, title IV, § 401(a)(132) , (133), Mar. 23, 2018 , 132 Stat. 1190 .)

## Nearby sections

- [26 U.S.C. § 531 Imposition of accumulated earnings tax](https://www.frixlaw.com/law-library/statutes/usc_t26_s531.md)
- [26 U.S.C. § 532 Corporations subject to accumulated earnings tax](https://www.frixlaw.com/law-library/statutes/usc_t26_s532.md)
- [26 U.S.C. § 533 Evidence of purpose to avoid income tax](https://www.frixlaw.com/law-library/statutes/usc_t26_s533.md)
- [26 U.S.C. § 534 Burden of proof](https://www.frixlaw.com/law-library/statutes/usc_t26_s534.md)
- [26 U.S.C. § 535 Accumulated taxable income](https://www.frixlaw.com/law-library/statutes/usc_t26_s535.md)
- [26 U.S.C. § 536 Income not placed on annual basis](https://www.frixlaw.com/law-library/statutes/usc_t26_s536.md)
- [26 U.S.C. § 537 Reasonable needs of the business](https://www.frixlaw.com/law-library/statutes/usc_t26_s537.md)
- [26 U.S.C. § 541 Imposition of personal holding company tax](https://www.frixlaw.com/law-library/statutes/usc_t26_s541.md)
- [26 U.S.C. § 542 Definition of personal holding company](https://www.frixlaw.com/law-library/statutes/usc_t26_s542.md)
- [26 U.S.C. § 543 Personal holding company income](https://www.frixlaw.com/law-library/statutes/usc_t26_s543.md)
- [26 U.S.C. § 544 Rules for determining stock ownership](https://www.frixlaw.com/law-library/statutes/usc_t26_s544.md)
- [26 U.S.C. § 545 Undistributed personal holding company income](https://www.frixlaw.com/law-library/statutes/usc_t26_s545.md)
- [26 U.S.C. § 546 Income not placed on annual basis](https://www.frixlaw.com/law-library/statutes/usc_t26_s546.md)
- [26 U.S.C. § 547 Deduction for deficiency dividends](https://www.frixlaw.com/law-library/statutes/usc_t26_s547.md)

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Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/usc_t26_s542. Check the current official text before relying on it. Not legal advice.