Ineligible corporations
(f) Ineligible corporations. The following corporations shall not be eligible to be treated as a DISC (1) A corporation exempt from tax by reason of section 501, (2) A personal holding company (as defined in section 542), (3) A financial institution to which section 581 or 593 applies, (4) An insurance company subject to the tax imposed by subchapter L, (5) A regulated investment company (as defined in section 851(a)), (6) A China Trade Act corporation receiving the special deduction provided in section 941(a), or (7) An electing small business corporation (as defined in section 1371(b)).