Page:United States Statutes at Large Volume 100 Part 3.djvu/499

 PUBLIC LAW 99-514—OCT. 22, 1986

100 STAT. 2307

"(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 the provisions of section 858. "(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 real estate investment trust taxable income (as defined in section 857(b)(2)) determined— "(A) without regard to subparagraph (B) of section 857(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 trust'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 calendar year as the trust's taxable year). "(3) TREATMENT OF DEFICIENCY DISTRIBUTIONS.—In the case of any deficiency dividend (as defined in section 860(f))— "(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." (b) RELATED AMENDMENTS.— (1) TIME CERTAIN DIVIDENDS TAKEN INTO ACCOUNT.—

(A) Subsection (b) of section 857 (relating to method of taxation of real estate investment trusts and holders of interests therein) is amended by adding at the end thereof the following new paragraph: "(8) TIME CERTAIN DIVIDENDS TAKEN INTO ACCOUNT.—For purposes of this title, any dividend declared by a real estate investment trust 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 trust on such date (or, if earlier, as provided in section 858). 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 856 is amended by striking out "Amounts" and inserting in lieu thereof "Except as provided in section 857(b)(8), amounts". (2) TREATMENT OF EARNINGS AND PROFITS.—Subsection (d) of

section 857 is amended to read as follows: "(d) EARNINGS AND PROFITS.—

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