Page:United States Statutes at Large Volume 100 Part 3.djvu/487

 PUBLIC LAW 99-514—OCT. 22, 1986

100 STAT. 2295

"(B) the distributed amount for such preceding calendar "(3) GROSSED UP REQUIRED DISTRIBUTION.—The grossed up required distribution for any calendar year is the required distribution for such year determined— "(A) with the application of paragraph (2) to such taxable year, and "(B) by substituting '100 percent' for each percentage set forth in paragraph (1). "(c) DISTRIBUTED AMOUNT.—For purposes of this section— "(1) IN GENERAL.—The term 'distributed amount' means, with respect to any calendar year, the sum of— "(A) the deduction for dividends paid (as defined in section 561) during such calendar year, and "(B) any amount on which tax is imposed under subsection (b)(1) or (b)(3)(A) of section 852 for any taxable year ending in such calendar year. "(2) INCREASE BY PRIOR YEAR OVERDISTRIBUTION.—The amount determined under paragraph (1) for any calendar year shall be increased by the excess (if any) of— "(A) the distributed amount for the preceding calendar year (determined with the application of this paragraph to such preceding calendar year), over "(B) the grossed up required distribution for such preceding calendar year. "(3) DETERMINATION OF DIVIDENDS PAID.—The amount of the dividends paid during any calendar year shall be determined without regard to— "(A) the provisions of section 855, and "(B) any exempt-interest dividend as defined in section 8520a)(5). "(d) TIME FOR PAYMENT OF TAX.—The tax imposed by this section for any calendar year shall be paid on or before March 15 of the following calendar year. "(e) DEFINITIONS AND SPECIAL RULES.—For purposes of this section— "(1) ORDINARY INCOME.—The term 'ordinary income' means the investment company taxable income (as defined in section 852(b)(2)) determined— "(A) without regard to subparagraphs (A) and (D) of section 852(b)(2), "(B) by not taking into account any gain or loss from the sale or exchange of a capital asset, and "(C) by treating the calendar year as the company's taxable year. "(2) CAPITAL GAIN NET INCOME.—The term 'capital gain net income' has the meaning given to such term by section 1222(9) (determined by treating the 1-year period ending on October 31 of any calendar year as the company's taxable year). "(3) TREATMENT OF DEFICIENCY DISTRIBUTIONS.—In the case of any deficiency dividend (as defined in section 860(0)— "(A) such dividend shall be taken into account when paid without regard to section 860, and "(B) any income giving rise to the adjustment shall be treated as arising when the dividend is paid. "(4) ELECTION TO USE TAXABLE YEAR IN CERTAIN CASES.— "(A) IN GENERAL.—If—

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