Page:United States Statutes at Large Volume 76.djvu/1093

 76 STAT.]

PUBLIC LAW 87-834-OCT. 16, 1962

SEC. 16. SALES AND EXCHANGES OF PATENTS, ETC., TO CERTAIN FOREIGN CORPORATIONS. (a) TREATMENT OF GAIN AS ORDINARY INCOME.—Part IV of subchapter P of chapter 1 (relating to special rules for determining capital gains and losses) is amended by adding after section 1248 (as added by section 15 of this Act) the following new section: "SEC. 1249. GAIN FROM CERTAIN SALES OR EXCHANGES OF PATENTS, ETC., TO FOREIGN CORPORATIONS. " (a) GENERAL RULE.—Except as provided in subsection (c), gain from the sale or exchange after December 31, 1962, of a patent, an invention, model, or design (whether or not patented), a copyright, a secret formula or process, or any other similar property right to any foreign corporation by any United States person (as defined in section 7701(a) (30)) which controls such foreign corporation shall. if such gain would (but for the provisions of this subsection) be gain from the sale or exchange of a capital asset or of property described in section 1231, be considered as gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231. " (b) CONTROL.—For purposes of subsection (a), control means, with respect to any foreign corporation, the ownership, directly or indirectly, of stock possessing more than 50 percent of the total combined voting power of all classes of stock entitled to A^ote. For purposes of this subsection, the rules for determining ownership of stock prescribed by section 958 shall apply." (b) CLERICAL AMENDMENT.—The table of sections for such part IV is amended by adding at the end thereof the following:

1045

Ante, p. 1041.

Ante, p. 988. 26 USC 1231. ^

Ante, p.:ioi8.

"Sec. 1249. Gain from certain sales or exchanges of patents, etc.,. to foreign corporations." (c) EFFECTIVE DATE.—The amendments made by this section shall

apply to taxable years beginning after December 31, 1962.

SEC. 17. TAX TREATMENT OF COOPERATIVES AND PATRONS. (a) IN GENERAL.—Chapter 1 (relating to normal taxes and surtaxes) is amended by adding at the end thereof the following new subchapter:

"Subchapter T—Cooperatives and Their Patrons ••Part I. Tax treatment of cooperatives. "Part II. Tax treatment by patrons of patronage dividends. "Part III. Definitions; special rules.

"PART I—TAX TREATMENT OF COOPERATIVES "Sec. 1381. Organizations to which part applies. "Sec. 1382. Taxable income of cooperatives. "Sec. 1383. Computation of tax where cooperative redeems nonqualified written notices of allocation.

^•SEC. 1381. ORGANIZATIONS TO WHICH PART APPLIES. ' ' (a) IN GENERAL.—This part shall apply to— " ( 1 ^ any organization exempt from tax under section 521 (relating to exemption of farmers' cooperatives from tax), and '•(2) any corporation operating on a cooperative basis other than an organization— " (A) which is exempt from tax under this chapter, " (B) which is subject to the provisions of— "(i) part II of subchapter H (relating to mutual savings banks, etc.), or

26 USC 521.

26 USC 591-595.

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