Page:United States Statutes at Large Volume 100 Part 3.djvu/488

 100 STAT. 2296

PUBLIC LAW 9 9 - 5 1 4 - O C T. 22, 1986 ,.. .^ -, ..>-

"(i) the taxable year of the regulated investment company ends with the month of November or December, and "(ii) such company makes an election under this paragraph, subsection (b)(1)(B) and paragraph (2) of this subsection shall be applied by taking into account the company's taxable year in lieu of the 1-year period ending on October 31 of the calendar year. "(B) ELECTION REVOCABLE ONLY WITH CONSENT.—An election under this paragraph, once made, may be revoked only with the consent of the Secretary."

(b) RELATED AMENDMENTS.— (1) TIME CERTAIN DIVIDENDS TAKEN INTO ACCOUNT.—

(A) Subsection (b) of section 852 (relating to method of taxation of regulated investment companies and their shareholders) is amended by adding at the end thereof the following new paragraph: "(6) TIME CERTAIN DIVIDENDS TAKEN INTO ACCOUNT.—For purposes of this title, any dividend declared by a regulated investment company in December of any calendar year and payable to shareholders of record on a specified date in such month shall be deemed— "(A) to have been received by each shareholder on such date, and "(B) to have been paid by such company on such date (or, if earlier, as provided in section 855). The preceding sentence shall apply only if such dividend is actually paid by the company before February 1 of the following . calendar year.' (B) Subsection (b) of section 855 is amended by striking out "Amounts" and inserting in lieu thereof "Except as provided in section 852(b)(6), amounts". (2) TREATMENT OF EARNINGS AND PROFITS.—Subsection (c) of

section 852 is amended to read as follows: "(c) EARNINGS AND PROFITS.—

"(1) IN GENERAL.—The earnings and profits of a regulated investment company for any taxable year (but not its accumulated earnings and profits) shall not be reduced by any amount which is not allowable as a deduction in computing its taxable income for such taxable year. For purposes of this subsection, the term 'regulated investment company' includes a domestic corporation which is a regulated investment company determined without regard to the requirements of subsection (a). "(2) COORDINATION WITH TAX ON UNDISTRIBUTED INCOME.—A

regulated investment company shall be treated as having sufficient earnings and profits to treat as a dividend any distribution (other than in a redemption to which section 302(a) applies) which is treated as a dividend by such company. The preceding sentence shall not apply to the extent that the amount distributed during any calendar year by the company exceeds the required distribution for such calendar year (as determined under section 4982)." (3) TREATMENT OF N E T CAPITAL LOSS AFTER OCTOBER 3 1 OF ANY

YEAR.—Subparagraph (C) of section 852(b)(3) (defining capital gain dividend) is amended by adding at the end thereof the following new sentences: "For purposes of this subparagraph.

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