Page:United States Statutes at Large Volume 52.djvu/512

 52 STAT.] 75TH CONG. , 3D SESS.- -CH. 2S9--MAY 28. 1938 (b) CORPORATIONS NOT ENTITLED TO CREDIT.- A corporation shall not to 1 be entitled to a consent dividends credit with respect to any taxable year- (1) Unless, at the close of such year, all preferred dividends (for the taxable year and, if cumulative, for prior taxable years) have been paid; or (2) If, at any time during such year, the corporation has taken any steps in, or in pursuance of a plan of, complete or partial liquidation of all or any part of the consent stock. (c) ALLOWANCE OF CREDIT.- T here shall be allowed to the corpo- ration, as a part of its basic surtax credit for the taxable year, a consent dividends credit equal to such portion of the total sum agreed to be included in the gross income of shareholders by their consents filed under subsection (d) as it would have been entitled to include in computing its basic surtax credit if actual distribution of an amount equal to such total sum had been made in cash and each shareholder making such a consent had received, on the consent divi- dends day, the amount specified in the consent. (d) SHAREHOLDERS' CONSENTS. -The corporation shall not be entitled to a consent dividends credit with respect to any taxable year- (1) Unless it files with its return for such year (in accordance with regulations prescribed by the Commissioner with the approval of the Secretary) signed consents made under oath by persons who were shareholders, on the last day of the taxable year of the corporation, of any class of consent stock; and (2) Unless in each such consent the shareholder agrees that he will include as a taxable dividend, in his return for the taxable year in which or with which the taxable year of the corporation ends, a specific amount; and (3) Unless the consents filed are made by such of the share- holders and the amount specified in each consent is such, that the consent distribution would not have been a preferential dis- tribution- (A) If there was no partial distribution during the last month of the taxable year of the corporation, or (B) If there was such a partial distribution then when considered in connection with such partial distribution; and (4) Unless in each consent made by a shareholder who is tax- able with respect to a dividend only if received from sources within the United States, such shareholder agrees that the specific amount stated in the consent shall be considered as a dividend received by him from sources within the United States; and (5) Unless each consent filed is accompanied by cash, or such other medium of payment as the Commissioner may by regula- tions authorize, in an amount equal to the amount that would be required by section 143 (b) or 144 to be deducted and withheld by the corporation if the amount specified in the consent had been, on the last day of the taxable year of the corporation, paid to the shareholder in cash as a dividend. The amount accom- panying the consent shall be credited against the tax imposed by section 211 (a) or 231 (a) upon the shareholder. (e) CONSENT DISTRIBUTION AS PART OF ENTIRE DIsTRIBUTION. -If during the last month of the taxable year with respect to which share- holders' consents are filed by the corporation under subsection (d) there is made a partial distribution, then, for the purposes of this So in original 471 Corporations not en- titled to credit. Allowance of credit. Shareholders' con- sents. Post, pp. 512, 513 . Podt, pp. 527, 530 . Consent distribu- tion as part of entire distribution.

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