Page:United States Statutes at Large Volume 48 Part 1.djvu/766

 l, 740 73d C ONGRESS. SESS. II. CH. 277 . MAY 10, 1934. INCOME TAX. CHI NA TR ADE ACT CORPORA- TIONS-Contd. Proviso. Limita tion. Ante, p. 686. Special dividend. Credit subject to spe- cial dividend to resi- dents of China. etc. A ddit ional, to all other payments. Pr oportiona te distri - bution to stock owned. D efi nit ion of stock ownership. Definition of "China". Vol .42,p.849 . Cre dits agai nst tax. No allowance for , of foreign countries. Ante, p. 718. (1) persons resident in China, the United States, or possessions of the United States, and (2) individual citizens of the United States or China wherever resident, bears to the par value of the whole numb er of share s of stock of th e cor porat ion ou tstan ding on such date : Provid ed, Th a t in no case shall the amount by which the tax imposed by section 13 is diminished by reason of such credit exceed the amount of the special dividend certified under subsection (b) of this section. (b) SPECIAL DIVIDEND .-Such credit shall not be allowed unless the Secretary of Commerce has certified to the Commissioner- (1) The amount which, during the ye ar ending on the date fixed by law for filing the return, the corporation has distributed as a special dividend to or for the benefit of such persons as on the last day of the taxable year were resident in China, the United States, or possessions of the United States, or were indi- vidual citizens of the United States or China, and owned shares of stock of the corporation ; (2) Th at su ch sp eci al dividend was in addition to all ot her a mounts, pay able or to be pa yable to su ch pe rsons or for their benefit, by reason of their interest in the corporation ; and (3) That such distribution has been made to or for the benefit of such persons in proportion to the par value of the shares of stock of the corporation owned by each ; except that if the cor- po ration h as more than one class o f stock, the cer tificate s shall contain a statement that the articles of incorporation provide a method for the apportionment of such special dividend among such persons, and that the amount certified has been distributed in accordance with the method so provided. (C) O WNERS HIP OF STOCK .-For the purposes of this section shares of stock of a co rporat ion s hall be con sider ed to be owned by the person in whom the equitable right to the income from such shares is in good faith vested. (d) D EFIN ITIO N OF CHINA. -As used in this sec tion the ter m " China " shall have the same meaning as when used in the China Trade Act, 1922 . SEC. 262. CRED ITS AG AINST THE TA X. A c orpor ation organ ized under the C hina Trade Act, 1922, shall not be allowed the credits against the tax for taxes of foreign coun- tr ies and possessi ons of t he Unite d States allowed by sect ion 131. Affiliation. SEC. 263. AFFILIA TION. corporations a p plic able . to A corporation organized under the China Trade Act, 1922, shall not be deemed to be affiliated with any other corporation within the meaning of section 141 . Income of sharehold- SEC. 264. INCOME OF SHAREHOLDERS. ers. Exclusion from gross income, p. 712. ASSE SSMENT AND COL LE CTI ON OF DEFICIENCIES. SEC. 271. DEFINITION OF DEFICIENCY. Deficiency" de- As used in this title in respect of a tax imposed by this title fined. a deficiency " means- (a) The amount by whi ch the tax imposed by thi s tit le ex ce eds the amount sh own as the tax by the taxpayer up on his return ; but the amount so shown on the return shall first be increased by the amounts previously assessed (or collected without assessment) asa For exclusion of dividends from gross income, see section 116. Supplement L-Assessment and Collection of Deficie ncies