Page:United States Statutes at Large Volume 123.djvu/381

 123STA T . 3 6 1 PUBLIC LA W 111 –5—FE B.1 7, 2 0 0 9‘ ‘ (2)whic h me e ts the r e qu ireme n ts of section 85 2( a ) for the ta x a bl e y ear , may elect the a p plication of this section with respect to cre d its allowable to the in v estment company durin g such taxable year with respect to such bonds . ‘‘(b) EF F ECTO FE L ECT I O N . —I f the election provided in sub - section (a) is in effect for any taxable year— ‘‘( 1 ) the regulated investment company shall not be allowed any credits to which subsection (a) applies for such taxable year, ‘‘(2) the regulated investment company shall— ‘‘( A ) include in gross income (as interest) for such tax- able year an amount equal to the amount that such invest- ment company would have included in gross income with respect to such credits if this section did not apply, and ‘‘( B ) increase the amount of the dividends paid deduc- tion for such taxable year by the amount of such income, and ‘‘( 3 ) each shareholder of such investment company shall— ‘‘(A) include in gross income an amount equal to such shareholder ’ s proportionate share of the interest income attributable to such credits, and ‘‘(B) be allowed the shareholder’s proportionate share of such credits against the tax imposed by this chapter. ‘‘(c) N OTICE TO SHAR EHOL D ER S .— F or purposes of subsection (b)(3), the shareholder’s proportionate share of— ‘‘(1) credits described in subsection (a), and ‘‘(2) gross income in respect of such credits, shall not exceed the amounts so designated by the regulated invest- ment company in a written notice mailed to its shareholders not later than 60 days after the close of its taxable year. ‘‘(d) M ANNER OF MA K IN G ELECTION AND NOTIF Y ING SHARE- HOLDERS.— T he election provided in subsection (a) and the notice to shareholders required by subsection (c) shall be made in such manner as the Secretary may prescribe. ‘‘(e) D EFINITIONS AND S P ECIAL RU LES.— ‘‘(1) DEFINITIONS.—For purposes of this subsection— ‘‘(A) TA X CREDIT B OND.—The term ‘tax credit bond’ means— ‘‘(i) a qualified tax credit bond (as defined in section 5 4 A(d)), ‘‘(ii) a build America bond (as defined in section 54AA(d)), and ‘‘(iii) any bond for which a credit is allowable under subpart H of part I V of subchapter A of this chapter. ‘‘(B) APPLICABLE DATE.—The term ‘applicable date’ means— ‘‘(i) in the case of a qualified tax credit bond or a bond described in subparagraph (A)(iii), any credit allowance date (as defined in section 54A(e)(1)), and ‘‘(ii) in the case of a build America bond (as defined in section 54AA(d)), any interest payment date (as defined in section 54AA(e)). ‘‘(2) STRIPPED TAX CREDIT BONDS.—If the ownership of a tax credit bond is separated from the credit with respect to such bond, subsection (a) shall be applied by reference to the Ap p licab ili ty.De a d li n e.