Page:United States Statutes at Large Volume 76.djvu/1085

 76 STAT.]

PUBLIC

LAW 87-834-OCT. 16, 1962

bined voting power of all classes of stock, entitled to vote, or of the total value of shares of all classes of stock, was held, directly or indirectly (within the meaning of section 958(a)), by United States persons (as defined in section 7701(a) (30)). "(c)

1037

Ante. p. lois. Ante, p. 988.

STOCK HAVING TRANSFERRED OR SUBSTITUTED BASIS.—To the

extent provided in regulations prescribed by the Secretary or his delegate, stock in a foreign corporation, the basis of which (in the hands of the taxpayer selling or exchanging such stock) is determined by reference to the basis (in the hands of such taxpayer or any other person) of stock in a foreign investment company, shall be treated as stock of a foreign investment company and held by the taxpayer throughout the holding period for such stock (determined under section 1223).

26 USC 1223.

" (d) RULES RELATING TO ENTITIES HOLDING FOREIGN INVESTMENT COMPANY STOCK.—To the extent provided in regulations prescribed

by the Secretary or his delegate— "(1) trust certificates of a trust to which section 677 (relating to income for benefit of grantor) applies, and "(2) stock of a domestic corporation, shall be treated as stock of a foreign investment company and held by the taxpayer throughout the holding period for such certificates or stock (determined under section 1223) in the same proportion that the investment in stock in a foreign investment company by the trust or domestic corporation bears to the total assets of such trust or corporation. "(e)

RULES RELATING TO STOCK ACQUIRED FROM A DECEDENT.—

"(1) BASIS.—In the case of stock of a foreign investment company acquired by bequest, devise, or inheritance (or by the decedent's estate) from a decedent dying after December 31, 1962, the basis determined under section 1014 shall be reduced (but not below the adjusted basis of such stock in the hands of the decedent immediately before his death) by the amount of the decedent's ratable share of the earnings and profits of such company accumulated after December 31, 1962. Any stock so acquired shall be treated as stock described in subsection (c). "(2) DEDUCTION FOR ESTATE TAX.—If stock to which subsection (a) applies is acquired from a decedent, the taxpayer shall, under regulations prescribed by the Secretary or his delegate, be allowed (for the taxable year of the sale or exchange) a deduction from gross income equal to that portion of the decedent's estate tax deemed paid which is attributable to the excess of (A) the value at which such stock was taken into account for purposes of determining the value of the decedent's gross estate, over (B) the value at which it would have been so taken into account if such value had been reduced by the amount described in paragraph (1). "(f)

26 USC 677.

26 USC 1014.

INFORMATION W I T H RESPECT TO CERTAIN FOREIGN INVESTMENT

COMPANIES.—Every United States person who, on the last day of the taxable year of a foreign investment company beginning after December 31, 1962, owns 5 percent or more in value of the stock of such company shall furnish with respect to such company such information as the Secretary or his delegate shall by regulations prescribe. "(g)

CROSS REEERENCE.—

"For special rules relating to the earnings and profits of foreign investment companies, see section 312(1). "SEC. 1247. ELECTION BY FOREIGN INVESTMENT COMPANIES TO DISTRIBUTE INCOME CURRENTLY. "(a)

ELECTION BY FOREIGN INVESTMENT COMPANY.—

"(1) IN GENERAL.—If a foreign investment company which is described in section 1246(b)(1) elects (in the manner provided

Ante, p. 10.36.

�