Page:United States Statutes at Large Volume 78.djvu/124

 82

PUBLIC LAW 88-272-FEB. 26, 1964

26 USC r*565°°'

26 USC 162.

[78 STAT.

"(iii) the consent dividends for the taxable year (determined under section 565), equals or exceeds the amount, if any, by which the personal holding company income for the taxable year (computed without regard to this paragraph and paragraph (6), and computed by including as personal holding company income copyright royalties and the adjusted income from mineral, oil, and gas royalties) exceeds 10 percent of the ordinary gross income. "(3) MINERAL, OIL, AND GAS ROYALTIES.—The adjusted income from mineral, oil, and gas royalties; except that such adjusted income shall not be included if— " (A) such adjusted income constitutes 50 percent or more of the adjusted ordinary gross income, " (B) the personal holding compan;^ income for the taxable year (computed without regard to this paragraph, and computed by including as personal holding company income copyright royalties and the adjusted income from rents) is not more than 10 percent of the ordinary gross income, and " (C) the sum of the deductions which are allowable under section 162 (relating to trade or business expenses) other than— " (i) deductions for compensation for personal services rendered by the shareholders, and " (ii) deductions which are specifically allowable under sections other than section 162, equals or exceeds 15 percent of the adjusted ordinary gross income. "(4) COPYRIGHT ROYALTIES.—Copyright royalties; except that copyright royalties shall not be included if— " (A) such royalties (exclusive of royalties received for the use of, or right to use, copyrights or interests in copyrights on works created in whole, or in part, by any shareholder) constitute 50 percent or more of the ordinary gross income, " (B) the personal holding company income for the taxable year computed— " (i) without regard to copyright royalties, other than royalties received for the use of, or right to use, copyrights or interests in copyrights in works created in whole, or in part, by any shareholder owning more than 10 percent of the total outstanding capital stock of the corporation, "(ii) without regard to dividends from any corporation in which the taxpayer owns at least 50 percent of all classes of stock entitled to vote and at least 50 percent of the total value of all classes of stock and which corporation meets the requirements of this subparagraph and subparagraphs (A) and (C), and "(iii) by including as personal holding company income the adjusted income from rents and the adjusted income from mineral, oil, and gas royalties, is not more than 10 percent of the ordinary gross income, and " (C) the sum of the deductions which are properly allocable to such royalties and which are allowable under section 162, other than— " (i) deductions for compensation for personal services rendered by the shareholders, "(ii) deductions for royalties paid or accrued, and "(iii) deductions which are specifically allowable under sections other than section 162,

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