Page:United States Statutes at Large Volume 76.djvu/1066

 1018

Ante. p. 988.

26 USC 933.

68 Stat. 508.

PUBLIC LAW 87-834-OCT. 16, 1962

of Puerto Rico or a possession of the United States and was derived from the active conduct of a described trade or business within the Commonwealth of Puerto Rico or a possession of the United States shall be made under regulations prescribed by the Secretary or his delegate. " (d) ITNITED STATES PERSON.—For purposes of this subpart, the term 'United States person' has the meaning assigned to it by section 7701 (a) (80) except that— "(1) with respect to a corporation organized under the laws of the Commoilwealth of Puerto Rico, such term does not include an individual who is a bona fide resident of Puerto Rico, if a di^ idend received by such individual during the taxable year from such corporation would, for purposes of section 933(1), be treated as income derived from sources within Puerto Rico, "'(2) with respect to a corporation organized under the laws of the Virgin Islands, such term does not include an individual who is a bona tide resident of the Virgin Islands and whose income tax obligation under this subtitle for the taxable year is satisfied pursuant to section 28(a) of the Revised Organic Act of the Virgin Islands, approved July 22, 1954 (48 U.S.C. 1642), by paying tax on income derived from all sources both within and outside the Virgin Islands into the treasury of the Virgin Islands, and "(3) with respect to a corporation organized under the laws of any other possession of the United States, such term does not include an individual Avho is a bona fide resident of any such other possession and whose income derived from sources within possessions of the United States is not, by reason of section 931 (a), includible in gross income under this subtitle for the taxable year. "SEC. 958. RULES FOR DETERMINING STOCK OWNERSHIP. "(a)

Ante, p. 1013. Post, p. 1020.

Ante, p. 988.

DIRECT AND INDIRECT OWNERSHIP.— " (1) (TENERAL RUEE.—For purposes of

this subpart (other than sectioiis 9r)5(b)(l)(A) and (B), 955(c)(2)(A) (ii), and 960 (a)(1)), stock owned means— " (A) stock owned directly, and " (B) stock owned with the application of pamgraph (2). '"(2) STOCK OWNERSIIH' THROUGH FOREIGN ENTITIES.—For purposes of subparagraph (B) of paragraph (1), stock owned, directly or indirectly, by or for a foreign corporation, foreign partnership, or foreign trust or foreign estate (within the meanuig of section 7701(a) (31)) shall be considered as being owned proportionately by its shareholders, partners, or beneficiaries. Stock considered to be owned by a person by reason of the application of the preceding sentence shall, for purposes of applying such sentence, be treated as actually owned by such person. "(3)

26 USC 318.

[76 STAT.

SPECIAL RULE FOR MUTUAL INSURANCE COMPXVNIES.—For

purposes of applying paragraph (1) in the case of a foreign mutual insurance company, the term 'stock' shall include any certificate entitling the holder to voting power in the corporation. " (b) CONSTRUCTIVE OWNERSHIP.—For purposes of sections 951(b), 954(d)(3), and 957, section 318(a) (relating to constructive ownership of stock) shall apply to the extent that the effect is to treat any United States person as a United States shareholder within the meaning of section 951(b), to treat a person as a related person within the meaning of section 954(d)(3), or to treat a foreign corporation as a controlled foreign corporation under section 957, except that— "(1) I n applying paragraph (1)(A) of section 318(a), stock owned by a nonresident alien individual (other than a foreign trust or foreign estate) shall not be considered as owned by a citizen or by a resident alien individual.

�