Page:United States Statutes at Large Volume 76.djvu/1050

 1002

PUBLIC LAW 87-834-OCT. 16, 1962

Ante, p. 1000.

corporation beginning after December 31, 1962, but only to the extent that such distribution is made out of the accumulated profits of a foreign corporation for a taxable year (of such foreign corporation) beginning after December 31, 1962. Fov purposes of paragraph (2), a distribution made by a foreign corporation out of its profits which are attributable to a distribution leceived from a foreign subsidiary to which section 902(b) applies shall be treated as made out of the accumulated profits of a foreign corporation for a taxable year beginning before January 1, 1963, to the extent that such distribution was paid out of the accumulated profits of such foreign subsidiary for a taxable year beginning before January 1, 1963. SEC. 10. SEPARATE LIMITATION ON FOREIGN TAX CREDIT WITH RESPECT TO CERTAIN INTEREST INCOME.

26 USC 904.

Post, p. 1031.

[76 STAT.

(a) LIMITATION ON FOREIGN TAX CREDIT.—Section 904 (relating

to limitations on foreign tax credit) is amended by redesignating subsection (f) as subsection (g) and by inserting after subsection (e) the following new subsection: "(f) APPLICATION INCOME.—

OF SECTION

IN

CASE

OF CERTAIN

INTEREST

•'(1) IN GENERAL.—The provisions of subsectioiis (a), (c), (d), and (e) of this section shall be applied separately with respect to— " (A) the interest income described in paragraph (2), and •'(B) income other than the interest income described,in paragraph (2). "(2)

'

so ^i-xj ^r

INTEREST IN(^OME TO WHICH APPLICABLE.—For purposes of

this subsection, the interest income described in this paragraph is interest other than interest— " (A) derived from any transaction which is directly related to the active conduct of a trade or business in a foreign country or a possession of the United States, " (B) derived in the conduct of a banking, financing, or similar business, 'HC) received from a corporation in which the taxpayer owns at least 10 percent of the voting stock, or " (D) received on obligations acquired as a result of the disposition of a trade or business actively conducted by the taxpayer in a foreign country or possession of the United '•" States or as a result of the disposition of stock or obligations of a corporation in which the taxpayer owned at least 10 percent of the voting stock. "(3) OVERALL LIMITATION NOT TO APPLY.—The limitation provided by subsection (a)(2) shall not apply with respect to the interest income described in paragraph (2). The Secretary or his delegate shall by regulations prescribe the manner of application of subsection (e) with respect to cases in which the limitation provided by subsection (a)(2) applies with respect to income other than the interest income described in paragraph (2). " (4) T R A N S I T I O N A L RULES FOR CARRYBACKS AND CARRYOVERS.— " (A) CARRYBACKS TO YEARS PRIOR TO REVENUE ACT OF

^ ,;

196 2.—Where, under the provisions of subsection (d), taxes (i) paid or accrued to any foreign country or possession of the United States in any taxable year beginning after the date of the enactment of the Revenue Act of 1962 are deemed (ii) paid or accrued in one or more taxable years beginning on or before the date of enactment of the ReA^enue Act of 1962, the amount of such taxes deemed paid or accrued shall be determined without regard to the provisions of this sub-

�