Page:United States Statutes at Large Volume 76.djvu/1069

 76 STAT. ]

PUBLIC LAW 87-834-OCT. 16, 1962

1021

were deemed paid by a domestic corporation under paragraph (1) for any prior taxable year. "(3)

TAXES PAID BY FOREIGN CORPORATION AND NOT PREVIOUSLY

DEEMED PAID BY DOMESTICORPORATION.—Any portion of a distribution from a foreign corporation received by a domestic corporation which is excluded from gross income under section 959 (a) shall be treated by the domestic corporation as a dividend, solely for purposes of taking into account under section 902 any income, war profits, or excess profits taxes paid to any foreign country or to any possession of the United States, on or with respect to the accumulated profits of such foreign corporation from which such distribution is made, which were not deemed paid by the domestic corporation under paragraph (1) for any prior taxable year.

Ante, p. 1019. Ante, p. 999.

" (b) S P E C I A L RULES FOR FOREIGN T A X CREDIT I N Y E A R OF R E C E I P T OF PREVIOUSLY TAXED EARNINGS AND PROFITS.— "(1) INCREASE I N SECTION 904 LIMITATION.—In the case of any

taxpayer who— " (A) either (i) chose to have the benefits of subpart A of this part for a taxable year in which he was required under section 951(a) to include in his gross income an amount in respect of a controlled foreign corporation, or (ii) did not pay or accrue for such taxable year any income, war profits, or excess profits taxes to any foreign country or to any possession of the United States, and " (B) chooses to have the benefits of subpart A of this part for the taxable year in which he receives a distribution or amount which is excluded from gross income under section 959(a) and which is attributable to earnings and profits of the controlled foreign corporation which was included in his gross income for the taxable year referred to in subparagraph (A), and " (C) for the taxable year in which such distribution or amount is received, pays, or is deemed to have paid, or accrues income, war profits, or excess profits taxes to a foreign country or to any possession of the United States with respect to such distribution or amount, the applicable limitation under section 904 for the taxable year in which such distribution or amount is received shall be increased as provided in paragraph (2), but such increase shall not exceed the amount of such taxes paid, or deemed paid, or accrued with respect to such distribution or amount.

Ante, p. 1006.

26 USC 904.

" (2) AMOUNT OF INCREASE.—The amount of increase of the

applicable limitation under section 904(a) for the taxable year 74 Stat. 1010. in which the distribution or amount referred to in paragraph ^^ "®^ ®°'*" (1)(B) is received shall be an amount equal to— " (A) the amount by which the applicable limitation under section 904(a) for the taxable year referred to in paragraph (1)(A) was increased by reason of the inclusion in gro^s income under section 951(a) of the amount in respect of the controlled foreign corporation, reduced by " (B) the amount of any income, war profits, and excess profits taxes paid, or deemed paid, or accrued to any foreign country or possession of the United States which were allowable as a credit under section 901 for the taxable year referred 26 USC 901; to in paragraph (1)(A) and which would not have been p"^^' p" 1031. allowable but for the inclusion in gross income of the amount described in subparagraph (A).

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