Internal Revenue Code:Sec. 277. Deductions incurred by certain membership organizations in transactions with members

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Location in Internal Revenue Code

     TITLE 26 - INTERNAL REVENUE CODE
      Subtitle A - Income Taxes
       CHAPTER 1 - NORMAL TAXES AND SURTAXES
        Subchapter B - Computation of Taxable Income
         PART IX - ITEMS NOT DEDUCTIBLE
       

Statute

    Sec. 277. Deductions incurred by certain membership organizations
        in transactions with members
 
    (a) General rule
      In the case of a social club or other membership organization
    which is operated primarily to furnish services or goods to members
    and which is not exempt from taxation, deductions for the taxable
    year attributable to furnishing services, insurance, goods, or
    other items of value to members shall be allowed only to the extent
    of income derived during such year from members or transactions
    with members (including income derived during such year from
    institutes and trade shows which are primarily for the education of
    members).  If for any taxable year such deductions exceed such
    income, the excess shall be treated as a deduction attributable to
    furnishing services, insurance, goods, or other items of value to
    members paid or incurred in the succeeding taxable year.  The
    deductions provided by sections 243, 244, and 245 (relating to
    dividends received by corporations) shall not be allowed to any
    organization to which this section applies for the taxable year.
    (b) Exceptions
      Subsection (a) shall not apply to any organization -
        (1) which for the taxable year is subject to taxation under
      subchapter H or L,
        (2) which has made an election before October 9, 1969, under
      section 456(c) or which is affiliated with such an organization,
        (3) which for each day of any taxable year is a national
      securities exchange subject to regulation under the Securities
      Exchange Act of 1934 or a contract market subject to regulation
      under the Commodity Exchange Act, or
        (4) which is engaged primarily in the gathering and
      distribution of news to its members for publication.
 

Sources

    (Added Pub. L. 91-172, title I, Sec. 121(b)(3)(A), Dec. 30, 1969,
    83 Stat. 540; amended Pub. L. 94-568, Sec. 1(c), Oct. 20, 1976, 90
    Stat. 2697; Pub. L. 99-514, title XVI, Sec. 1604(a), Oct. 22, 1986,
    100 Stat. 2769.)
 

References in Text

                             REFERENCES IN TEXT
      The Securities Exchange Act of 1934, referred to in subsec.
    (b)(3), is act June 6, 1934, ch. 404, 48 Stat. 881, as amended,
    which is classified principally to chapter 2B (Sec. 78a et seq.) of
    Title 15, Commerce and Trade. For complete classification of this
    Act to the Code, see section 78a of Title 15 and Tables.
      The Commodity Exchange Act, referred to in subsec. (b)(3), is act
    Sept. 21, 1922, ch. 369, 42 Stat. 998, as amended, which is
    classified generally to chapter 1 (Sec. 1 et seq.) of Title 7,
    Agriculture. For complete classification of this Act to the Code,
    see section 1 of Title 7 and Tables.
 

Miscellaneous

                                 AMENDMENTS
      1986 - Subsec. (b)(4). Pub. L. 99-514 added par. (4).
      1976 - Subsec. (a). Pub. L. 94-568 provided that the deductions
    provided by sections 243, 244, and 245 (relating to dividends
    received by corporations) shall not be allowed to any organization
    to which this section applies for the taxable year.
                      EFFECTIVE DATE OF 1986 AMENDMENT
      Section 1604(b) of Pub. L. 99-514 provided that: ''The amendment
    made by this section (amending this section) shall apply to taxable
    years beginning after the date of the enactment of this Act (Oct.
    22, 1986).''
                      EFFECTIVE DATE OF 1976 AMENDMENT
      Amendment by Pub. L. 94-568 applicable to taxable years beginning
    after Oct. 20, 1976, see section 1(d) of Pub. L. 94-568, set out as
    a note under section 501 of this title.
                               EFFECTIVE DATE
      Section applicable to taxable years beginning after Dec. 31,
    1970, see section 121(g) of Pub. L. 91-172, set out as an Effective
    Date of 1969 Amendment note under section 511 of this title.
 

References

                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 404 of this title.