Page:United States Statutes at Large Volume 78.djvu/130

 88

68A Stat. 189.

'n^'®26 USC 331. Ante, p. 87. 26 USC 562.

PUBLIC LAW 88-272-FEB. 26, 1964

[78

STAT.

responding provisions of prior law, is a personal holding company under the law applicable to such taxable year, the term 'dividend' also means any distribution of property (whether or not a dividend as defined in subsection (a)) made by the corporation to its shareholders, to the extent of its undistributed personal holding company income (determined under section 545 without regard to distributions under this paragraph) for such year. " (B) For purposes of subparagraph (A), the term 'distribution of property' includes a distribution in complete liquidation occurring within 24 months after the adoption of a plan of liquidation, but— " (i) only to the extent of the amounts distributed to distributees other than corporate shareholders, and "(ii) only to the extent that the corporation designates such amounts as a dividend distribution and duly notifies such distributees of such designation, under regulations prescribed by the Secretary or his delegate, but "(iii) not in excess of the sum of such distributees' allocable share of the undistributed personal holding company income for such year, computed without regard to this subparagraph or section 562(b). " (2) Section 331(b) (relating to nonapplication of section 301) is amended by inserting after "any distribution of property" the phrase "(other than a distribution refen-ed to in paragraph (2)(B) of section 316(b))". (3) Section 562(b) (relating to distributions in liquidation) is amended to read as follows: " (b) DISTRIBUTIONS I N LiQuroATioN.—

26 USC 542. 26 USC 5 52.

26 USC 551.

"(1) Except in the case of a personal holding company described in section 542 or a foreign personal holding company described in section 552— " (A) in the case of amounts distributed in liquidation, the pait of such distribution which is properly chargeable to earnings and profits accumulated after February 28, 1913, shall be treated as a dividend for purposes of computing the dividends paid deduction, and " (B) in the case of a complete liquidation occurring within 24 months after the adoption of a plan of liquidation, any distribution within such period pursuant to such plan shall, to the extent of the earnings and profits (computed without regard to capital losses) of the corporation for the taxable year in which such distribution is made^ be treated as a dividend for purposes of computing the dividends paid deduction. "(2) I n the case of a complete liquidation of a personal holding tioiripaiiy, occurring within 24 months after the adoption of a plan of liquidation, the amount of any distribution within such period. pursuant to such plan shall be treated as a dividend for purposes of computing the dividends paid deduction, to the extent that such amount is distributed to corporate distributees and represents such corporate distributees' allocable share of the undistributed personal holding company income for the taxable year of such distribution computed without regard to this paragraph and without regard to subparagraph (B) of section 316(b)(2). " (4) Section 551(b) (relating to amount included in gross incxMne) is amended by striking out "received as a dividend" and inserting in lieu thereof "received as a dividend (determined as if

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