In the case of a corporation, gross income does not include any contribution to the capital of the taxpayer.

For purposes of subsection (a), the term “contribution to the capital of the taxpayer” does not include—

(1) any contribution in aid of construction or any other contribution as a customer or potential customer, and

(2) any contribution by any governmental entity or civic group (other than a contribution made by a shareholder as such).

The Secretary shall issue such regulations or other guidance as may be necessary or appropriate to carry out this section, including regulations or other guidance for determining whether any contribution constitutes a contribution in aid of construction.

For basis of property acquired by a corporation through a contribution to its capital, see section 362.

(1) For basis of property acquired by a corporation through a contribution to its capital, see section 362.

(2) For special rules in the case of contributions of indebtedness, see section 108(e)(6).

(Aug. 16, 1954, ch. 736, 68A Stat. 39; Pub. L. 94–455, title XXI, § 2120(a), Oct. 4, 1976, 90 Stat. 1912; Pub. L. 95–600, title III, § 364(a), Nov. 6, 1978, 92 Stat. 2854; Pub. L. 96–589, § 2(e)(2), Dec. 24, 1980, 94 Stat. 3396; Pub. L. 98–369, div. A, title I, § 163(a), July 18, 1984, 98 Stat. 697; Pub. L. 99–514, title VIII, § 824(a), Oct. 22, 1986, 100 Stat. 2374; Pub. L. 104–188, title I, § 1613(a)(1), (2), Aug. 20, 1996, 110 Stat. 1848–1850; Pub. L. 115–97, title I, § 13312(a), Dec. 22, 2017, 131 Stat. 2132.)