Page:United States Statutes at Large Volume 68A.djvu/77

 CH. 1—NORMAL TAXES AND SURTAXES

37

relation to the amount of the tax as the amount which (but for the imposition of the tax imposed by this subtitle) would have accrued directly to or for the use of or would be applied for the benefit of such State or political subdivision bears to the amount of the taxable income from the operation of such bridge for such taxable year. No such refund shall be made unless the entire amount of the refund is to be applied in part payment for the acquisition of such bridge. (2) If by the terms of such contract no part of the proceeds from the operation of the bridge for the taxable year would, irrespective of the tax imposed by this subtitle, accrue directly to or for the use of or be applied for the benefit of such State or political subdivision, then the tax on the taxable income from the operation of such bridge shall be levied, assessed, collected, and paid in the manner and at the rates prescribed in this subtitle. SEC. 116. PARTIAL EXCLUSION OF DIVIDENDS RECEIVED BY INDIVIDUALS. (a) EXCLUSION FROM GROSS INCOME,^—Effective with respect to any

taxable year ending after July 31, 1954, gross income does not include amounts received by an individual as dividends from domestic corporations, to the extent that the dividends do not exceed $50. If the dividends received in a taxable year exceed $50, the exclusion provided by the preceding sentence shall apply to the dividends first received in such year. (b) CERTAIN DIVIDENDS EXCLUDED.^—Subsection (a) shall not apply to any dividend from— (1) an insurance company subject to a tax imposed by part I or II of subchapter L (sec. 801 and following); (2) a corporation organized under the China Trade Act, 1922 (see sec. 941); or (3) a corporation which, for the taxable year of the corporation in which the distribution is made, or for the next preceding taxable year of the corporation, is— (A) a corporation exempt from tax under section 501 (relating to certain charitable, etc., organizations) or section 521 (relating to farmers' cooperative associations); or (B) a corporation to which section 931 (relating to income from sources within possessions of the United States) applies. (c) SPECIAL RULES FOR CERTAIN DISTRIBUTIONS.^—For purposes of

subsection (a)— (1) Any amount allowed as a deduction under section 591 (relating to deduction for dividends paid by mutual savings banks, etc.) shall not be treated as a dividend. (2) A dividend received from a regulated investment company shall be subject to the limitations prescribed in section 854. (d) CERTAIN NONRESIDENT ALIENS INELIGIBLE FOR EXCLUSION.—

Subsection (a) does not apply to a nonresident alien individual with respect to whom a tax is imposed for the taxable year under section 871 (a).

§ 116(d)

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