Page:United States Statutes at Large Volume 124.djvu/3567

 124 STAT. 3541 PUBLIC LAW 111–325—DEC. 22, 2010 ‘‘(B) the failure to meet such requirement is due to reasonable cause and not due to willful neglect. ‘‘(2) IMPOSITION OF TAX ON FAILURES.—If paragraph (1) applies to a regulated investment company for any taxable year, there is hereby imposed on such company a tax in an amount equal to the excess of— ‘‘(A) the gross income of such company which is not derived from sources referred to in subsection (b)(2), over ‘‘(B) 1⁄9 of the gross income of such company which is derived from such sources.’’. (c) DEDUCTION OF TAXES PAID FROM INVESTMENT COMPANY TAXABLE INCOME.—Paragraph (2) of section 852(b) is amended by adding at the end the following new subparagraph: ‘‘(G) There shall be deducted an amount equal to the tax imposed by subsections (d)(2) and (i) of section 851 for the taxable year.’’. (d) EFFECTIVE DATE.—The amendments made by this section shall apply to taxable years with respect to which the due date (determined with regard to any extensions) of the return of tax for such taxable year is after the date of the enactment of this Act. TITLE III—MODIFICATION OF RULES RELATED TO DIVIDENDS AND OTHER DISTRIBUTIONS SEC. 301. MODIFICATION OF DIVIDEND DESIGNATION REQUIREMENTS AND ALLOCATION RULES FOR REGULATED INVESTMENT COMPANIES. (a) CAPITAL GAIN DIVIDENDS.— (1) IN GENERAL.—Subparagraph (C) of section 852(b)(3) is amended to read as follows: ‘‘(C) DEFINITION OF CAPITAL GAIN DIVIDEND.—For pur- poses of this part— ‘‘(i) IN GENERAL.—Except as provided in clause (ii), a capital gain dividend is any dividend, or part thereof, which is reported by the company as a capital gain dividend in written statements furnished to its shareholders. ‘‘(ii) EXCESS REPORTED AMOUNTS.—If the aggregate reported amount with respect to the company for any taxable year exceeds the net capital gain of the com- pany for such taxable year, a capital gain dividend is the excess of— ‘‘(I) the reported capital gain dividend amount, over ‘‘(II) the excess reported amount which is allo- cable to such reported capital gain dividend amount. ‘‘(iii) ALLOCATION OF EXCESS REPORTED AMOUNT.— ‘‘(I) IN GENERAL.—Except as provided in sub- clause (II), the excess reported amount (if any) which is allocable to the reported capital gain divi- dend amount is that portion of the excess reported amount which bears the same ratio to the excess 26 USC 851 note. 26 USC 852.