Page:United States Statutes at Large Volume 118.djvu/1532

 118 STAT. 1502 PUBLIC LAW 108–357—OCT. 22, 2004 investment company is a 10 percent shareholder in such corporation or partnership, and ‘‘(II) any interest which is treated as not being portfolio interest under the rules of subsection (h)(4). ‘‘(iii) Any interest referred to in subsection (i)(2)(A) (without regard to the trade or business of the regu lated investment company). ‘‘(iv) Any interest related dividend includable in gross income with respect to stock of another regulated investment company. ‘‘(F) 10 PERCENT SHAREHOLDER.—For purposes of this paragraph, the term ‘10 percent shareholder’ has the meaning given such term by subsection (h)(3)(B). ‘‘(2) SHORT TERM CAPITAL GAIN DIVIDENDS.— ‘‘(A) IN GENERAL.—Except as provided in subparagraph (B), no tax shall be imposed under paragraph (1)(A) of subsection (a) on any short term capital gain dividend received from a regulated investment company. ‘‘(B) EXCEPTION FOR ALIENS TAXABLE UNDER SUB SECTION (a)(2).—Subparagraph (A) shall not apply in the case of any nonresident alien individual subject to tax under subsection (a)(2). ‘‘(C) SHORT TERM CAPITAL GAIN DIVIDEND.—For pur poses of this paragraph, the term ‘short term capital gain dividend’ means any dividend (or part thereof) which is designated by the regulated investment company as a short term capital gain dividend in a written notice mailed to its shareholders not later than 60 days after the close of its taxable year. If the aggregate amount so designated with respect to a taxable year of the company (including amounts so designated with respect to dividends paid after the close of the taxable year described in section 855) is greater than the qualified short term gain of the company for such taxable year, the portion of each distribution which shall be a short term capital gain dividend shall be only that portion of the amounts so designated which such quali fied short term gain bears to the aggregate amount so designated. Such term shall not include any dividend with respect to any taxable year of the company beginning after December 31, 2007. ‘‘(D) QUALIFIED SHORT TERM GAIN.—For purposes of subparagraph (C), the term ‘qualified short term gain’ means the excess of the net short term capital gain of the regulated investment company for the taxable year over the net long term capital loss (if any) of such company for such taxable year. For purposes of this subparagraph— ‘‘(i) the net short term capital gain of the regulated investment company shall be computed by treating any short term capital gain dividend includible in gross income with respect to stock of another regulated investment company as a short term capital gain, and ‘‘(ii) the excess of the net short term capital gain for a taxable year over the net long term capital loss for a taxable year (to which an election under section 4982(e)(4) does not apply) shall be determined without regard to any net capital loss or net short term capital Notice. Deadline.

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