Page:United States Statutes at Large Volume 76.djvu/1061

 76 STAT. ]

PUBLIC LAW 87-834-OCT. 16, 1962

"(2) the'qualified investments in less developed countries (as so defined) of the controlled foreign corporation at the close of the preceding taxable year. "SEC. 955. WITHDRAWAL OF PREVIOUSLY EXCLUDED SUBPART F INCOME FROM QUALIFIED INVESTMENT. " (a) GENERAL RULES.— "(1) AMOUNT WITHDRAWN.—For

purposes of this subpart, the amount of previously excluded subpart F income of any controlled foreign corporation withdrawn from investment m less developed countries for any taxable year is an amount equal to the decrease in the amount of qualified investments in less developed countries of the controlled foreign corporation for such year, but only to the extent that the amount of such decrease does not exceed an amount equal to— " (A) the sum of the amounts excluded under section 954 (b)(1) from the foreign base company income of such corporation for all prior taxable years, reduced by " (B) the sum of the amounts of previously excluded subpart F income withdrawn from investment in less developed countries of such corporation determined under this subsection for all prior taxable years. "(2) DECREASE I N QUALIFIED INVESTMENTS.—For purposes of paragraph (1), the amount of the decrease in qualified investments in less developed countries of any controlled foreign corporation for any taxable year is the amount by which— " (A) the amount of qualified investments in less developed countries of the controlled foreign corporation at the close of the preceding taxable year, exceeds " ( B ^ the amount of qualified investments in less developed countries of the controlled foreign corporation at the close of the taxable year, to the extent the amount of such decrease does not exceed the sum of the earnings and profits for the taxable year and the earnings and profits accumulated for prior taxable years beginning after December 31, 1962. For purposes of this paragraph, if i^ualified investments in less developed countries are disposed of by the controlled foreign corporation during the taxable year, the amount of the decrease in qualified investments in less developed countries of such controlled foreign corporation for such year shall be reduced by an amount equal to the amount (if any) by which the losses on such dispositions during such year exceed the gains on such dispositions during such year. "(3) PRO RATA SHARE OF AMOUNT WITHDRAWN.—In the case of any United States shareholder, the pro rata share of the amount of previously excluded subpart F income of any controlled foreign corporation withdrawn from investment:n less developed countries for any taxable year is his pro rata share of the amount determined under paragraph (1).

"(b)

QUALIFIED INVESTMENTS IN LESS DEVELOPED COUNTRIES.—

"(1) IN GENERAL.—For purposes of this subpart, the term 'qualified investments in less developed countries' means property which is— " (A) stock of a less developed country corporation held by the controlled foreign corporation, but only if the controlled foreign corporation owns 10 percent or more of the total combined voting power of all classes of stock of such less developed country corporation; "'(B) an obligation of a less developed country corporation held by the controlled foreign corporation, which, at the

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