§581 — Definition of bank
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Statute Text — 26 U.S.C. §581
For purposes of sections 582 and 584, the term “bank” means a bank or trust company incorporated and doing business under the laws of the United States (including laws relating to the District of Columbia) or of any State, a substantial part of the business of which consists of receiving deposits and making loans and discounts, or of exercising fiduciary powers similar to those permitted to national banks under authority of the Comptroller of the Currency, and which is subject by law to supervision and examination by State or Federal authority having supervision over banking institutions. Such term also means a domestic building and loan association.
Treasury Regulations
- Treas. Reg. §Treas. Reg. §1.581-1 Banks
- Treas. Reg. §Treas. Reg. §1.581-1(a) In order to be a bank as defined in section 581, an institution must be a corporation for federal tax purposes.
- Treas. Reg. §Treas. Reg. §1.581-1(b) This section is effective as of January 1, 1997.
- Treas. Reg. §Treas. Reg. §1.581-2 Mutual savings banks, building and loan associations, and cooperative banks
- Treas. Reg. §Treas. Reg. §1.581-2(a) While the general principles for determining the taxable income of a corporation are applicable to a mutual savings bank, a building and loan association, and a cooperative bank not having capital stock represented by shares, there are certain exceptions and special rules governing the computation in the case of such institutions.
- Treas. Reg. §Treas. Reg. §1.581-2(b) For the purpose of computing the net operating loss deduction provided in section 172, any taxable year for which a mutual savings bank, building and loan association, or a cooperative bank not having capital stock represented by shares was exempt from tax shall be disregarded.
- Treas. Reg. §Treas. Reg. §1.581-3 Definition of bank prior to September 28, 1962
31 Citing Cases
Analysis Section 581 provides in relevant part: For purposes ofsections 582 and 584, the term "bank" means a bank or trust company incorporated and doing business under the laws ofthe United States * * * or ofany State, a substantial part of the business ofwhich consists ofreceiving deposits and making loans and discounts, * *
Analysis Section 581 provides in relevant part: For purposes ofsections 582 and 584, the term "bank" means a bank or trust company incorporated and doing business under the laws ofthe United States * * * or ofany State, a substantial part of the business ofwhich consists ofreceiving deposits and making loans and discounts, * *
(the Bank), which qualifies as a bank pursuant to section 581 .
Section 581 provides a broad definition for the term “bank”, while section 585 provides for the reserves for losses on loans to banks. Section 581 provides: SEC. 581. DEFINITION OF BANK. For purposes of sections 582 and 584, the term “bank” means a bank or trust company incorporated and doing business under the laws of the United States (including
ital losses under section 165(g)(1) and (2)(C). Under section 582(a), however, petitioner was entitled to bad debt deductions on account of these losses — deductible in full against ordinary income — if it qualified as a “bank” within the meaning of section 581. The parties have filed cross-motions for partial summary judgment on this question. We conclude that petitioner was not a “bank” within the meaning of section 581 and hence that the losses in question must be treated as capital losses. W
The Commissioner has applied the section 581 definition of "bank" to interpret the phrase "carrying on the banking business" for purposes of section 861(c).
The Commissioner has applied the section 581 definition of "bank" to interpret the phrase "carrying on the banking business" for purposes of section 861(c).
fthese sections. Harborside points out that in many Code sections Congress used the phrase "consists of" but then modified it--as it did in the electricity-related section above --to clarify that it doesn't mean "is composed entirely of." See, e.g., sec. 581 ("a substantial part ofthe business ofwhich consists of"); sec. 181(e)(2)(E) (added by the Consolidated Appropriations Act, 2016, sec. 169(c), 129 Stat. at 3067 ("includes or consists of")). Harborside suggests that Congress could have simil
fthese sections. Harborside points out that in many Code sections Congress used the phrase "consists of" but then modified it--as it did in the electricity-related section above --to clarify that it doesn't mean "is composed entirely of." See, e.g., sec. 581 ("a substantial part ofthe business ofwhich consists of"); sec. 181(e)(2)(E) (added by the Consolidated Appropriations Act, 2016, sec. 169(c), 129 Stat. at 3067 ("includes or consists of")). Harborside suggests that Congress could have simil
fthese sections. Harborside points out that in many Code sections Congress used the phrase "consists of" but then modified it--as it did in the electricity-related section above --to clarify that it doesn't mean "is composed entirely of." See, e.g., sec. 581 ("a substantial part ofthe business ofwhich consists of"); sec. 181(e)(2)(E) (added by the Consolidated Appropriations Act, 2016, sec. 169(c), 129 Stat. at 3067 ("includes or consists of")). Harborside suggests that Congress could have simil
It makes trust IRAs eligible S corporation owners: (vi) In the case of a corporation which is a bank (as defined in section 581) or a depository institution holding company (as defined in section 3(w)(l) of the Federal Deposit Insurance Act (12 U.S.C.
Principally, respondent argues that (1) to be in the banking business for purposes of section 956(c)(2)(A), an institution must first be a “bank” within the meaning of section 581 (definition of bank for purposes of rules of general application to banking institutions), and (2) since WFNNB does no more than operate a private label credit card business, its activities are too narrow to put it into “the banking business”.
Principally, respondent argues that (1) to be in the banking business for purposes of section 956(c)(2)(A), an institution must first be a “bank” within the meaning of section 581 (definition of bank for purposes of rules of general application to banking institutions), and (2) since WFNNB does no more than operate a private label credit card business, its activities are too narrow to put it into “the banking business”.
(a) General Rule.--In the case of any short-term obligation to which this section applies, for purposes of this title-- (1) there shall be included in the gross income of the holder an amount equal to the sum of the daily portions of the acquisition discount for each day during the taxable year on which such holder held such obligation, and (2) any interest payable on the obligation (other than interest taken into account in determining the am
During the years in issue, 1986 through 1988, Moore Financial was the parent corporation of IFNB.5 In 1986, IFNB was a "bank", as defined in section 581, that was entitled to and did use the cash method of accounting for Federal income tax purposes.6 Also during 1986, IFNB was the largest commercial and agricultural lender in Idaho.
of the acquisition discount) shall be included in gross income as it accrues. (b) Short-Term Obligations to Which Section Applies.— (1) In GENERAL. — This section shall apply to any short-term obligation which— (C) is held by a bank (as defined in section 581), Hi if! ‡ tjí ‡ 'Jfi (c) Cross Reference. — For special rules limiting the application of this section to original issue discount in the case of nongovernmental obligations, see section 1283(c). Certain pertinent provisions of section 128
* * * * * * * (3) Qualified financial institution.-- For purposes of this subsection, the term "qualified financial institution" means-- - 17 - (A) any bank (as defined in section 581), (B) any institution described in section 591, (C) any credit union the deposits or accounts in which are insured under Federal or State law or are protected or guaranteed under State law, or (D) any similar institution chartered and supervised under Federal or State law.
— For purposes of this subsection, the term “qualified financial institution” means— (A) any bank (as defined in section 581), (B) any institution described in section 591, (C) any credit union the deposits or accounts in which are insured under Federal or State law or are protected or guaranteed under State law, or (D) any similar institution chartered and supervised under Federal or State law.