Page:United States Statutes at Large Volume 76.djvu/1062

 1014

Ante. p. 1012.

PUBLIC LAW 87-834-OCT. 16, 1962

[76 STAT.

time of its acquisition by the controlled foreign corporation, has a maturity of one year or more, 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; or " (C) an obligation of a less developed country. " (2) COUNTRY CEASES TO BE LESS DEVELOPED COUNTRY.—For purposes of this subpart, property which would be a qualified investment in less developed countries, but for the fact that a foreign country has, after the acquisition of such property by the controlled foreign corporation, ceased to be a less developed country, shall be treated as a qualified investment in less developed countries. "(3) SPECIAL RULE.—For purposes of this subpart, a United States shareholder of a controlled foreign corporation may, under regulations prescribed by the Secretary or his delegate, make the determinations under subsection (a)(2) of this section and under subsection (f) of section 954 as of the close of the years following the years referred to in such subsections, or as of the close of such longer period of time as such regulations may permit, in lieu of on the last day of such years. Any election under this paragraph made with respect to any taxable year shall apply to such year and to all succeeding taxable years unless the Secretary or his delegate consents to the revocation of such election. " (4) EXCEPTION.—For purposes of this subpart, property shall not constitute c^ualified investments in less developed countries if such property is disposed of within 6 months after the date of its acquisition. "(5) AMOUNT ATTRIBUTABLE TO PROPERTY.—The amount taken into account under this subpart with respect to any property described in paragraph (1) or (2) shall be its adjusted basis, reduced by any liability to which such property is subject. " (c) LESS DEVELOPED COUNTRY CORPORATIONS.—

Post, p. 1016.

"(1) IN GENERAL.—For purposes of this subpart, the term 'less developed country corporation' means a foreign corporation which during the taxable year is engaged in the active conduct of one or more trades or businesses and— " (A) 80 percent or more of the gross income of which for the taxable year is derived from sources within less developed countries; and " (B) 80 percent or morojin value of the assets of which on each day of the taxable year consists of— "(i) property used in such trades or businesses and located in less developed countries, "(ii) money, and deposits with persons carrying on the banking business, "(iii) stock, and obligations which, at the time of their acquisition, have a maturity of one year or more, of any other less developed country corporation, "(iv) an obligation.of a less developed country, " (v) an investment which is required because of restrictions imposed by a less developed country, and "(vi) property described in section 956(b)(2). For purposes of subparagraph (A), the determination as to whether income is derived from sources within less developed countries shall be made under regulations prescribed by the Secretary or his delegate. "(2) SHIPPING COMPANIES.—For purposes of this subpart, the term 'less developed country corporation' also means a foreign corporation—

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