Page:United States Statutes at Large Volume 65.djvu/503

 65 STAT.]

PUBLIC LAW 183—OCT. 20, 1951

469

able year (except as may be otherwise determined under section 129 (b)) be allowed either the $25,000 exemption from surtax provided in 26u!Ua§i29(b). subsection (b) or the $25,000 minimum excess profits credit provided in the last sentence of section 431, unless such transferee corporation ^ |^^|- c^*§43i shall establish by the clear preponderance of the evidence that the securing of such exemption or credit was not a major purpose of such transfer. For the purposes of this subsection, control means the ownership of stock possessing at least 80 per centum of the total combined voting power of all classes of stock entitled to vote or at least 80 per centum of the total value of shares of all classes of stock of the corporation. I n determining the ownership of stock for the purpose of this subsection, the ownership of stock shall be determined in accordance with the provisions of section 503, except that constructive ownership ^ u.*s. c^§ sos. under section 503(a)(2) shall be determined only with respect to the individual's spouse and minor children. The provisions of section 129 (b), and the authority of the Secretary under such section, shall, to the extent not inconsistent with the provisions of this subsection, be applicable to this subsection. This subsection shall not apply to any taxable year with respect to which the tax imposed by subchapter D of this chapter is not in effect." ^ u.^s.^c.^§ 430 et (g) TECHNICAL AMENDMENT.—Section 14 (relating to normal tax « « «• on special classes of corporations in the case of taxable years beginning before July 1, 1950) is hereby repealed. SEC. 122. CREDITS OF CORPORATIONS. (a)

DIVIDENDS RECEIVED CREDIT.—Paragraphs

(1)

and

(2)

of

section 26(b) (relating to credit for dividends received; are hereby amended to read as follows: "(1) IN GENERAL.—85 per centum of the amount received as dividends (other than dividends described in paragraph (2) on the preferred stock of a public utility) from a domestic corporation which is subject to taxation under this chapter. "(2)

26 u.*s.c% 26(b). ^o*^- P- ^87.

CERTAIN PREFERRED STOCK.—

" (A) Calendar Year 1951.—In the case of a taxable year beginning on January 1, 1951, and ending on December 31, 1951, 61 per centum of the amount received as dividends on the preferred stock of a public utility which is subject to taxation under this chapter and with respect to which the credit provided in section 26(h) for dividends paid is allowable. " (B) Taxable Years Beginning After March 31, 1951, and Before April 1, 1954.—In the case of taxable years beginning after March 31, 1951, and before April 1, 1954, 62 per centum of the amount received as dividends on the preferred stock of a public utility which is subject to taxation under this chapter and with respect to which the credit provided in section 26(h) for dividends paid is allowable. " (C) Taxable Years Beginning After March 31, 1954.— I n the case of taxable years beginning after March 31, 1954, 59 per centum of the amount received as dividends on the preferred stock of a public utility which is subject to taxation under this chapter and with respect to which the credit provided in section 26(h) for dividends paid is allowable." (b) CREDIT FOR DivmENDs PAID ON CERTAIN PREFERRED STOCK.— The first sentence of section 26(h)(1) (relating to amount of credit for dividends paid on certain preferred stock) is hereby amended

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26 u*^s 0% 26 oi)

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