Page:United States Statutes at Large Volume 78.djvu/136

 94

PUBLIC LAW 88-272-FEB. 26, 1964

[78 STAT.

(B) by striking out "section 5 4 3 (a)(9) " each place it appears and inserting in lieu thereof "section 543(a)(4)". (4) REAL ESTATE INVESTMENT TRUSTS.—Paragraph (6) of section 856(a) (relating to definition of real estate investment trust) is amended by striking out "gross income" and inserting in lieu thereof "adjusted ordmary gross income (as defined in section 543(b)(2))".

26 USC*s43'. 74 Stat. 1004 26 USC 856.

(5)

68A Stat. 350.

UNINCORPORATED BUSINESS ENTERPRISES ELECTING TO BE

TAXED AS DOMESTICORPORATIONS.—Section 1361(i) (relating to personal holding company income) is amended to read as follows: " (i) PERSONAL HOLDING COMPANY INCOME.— "(1) EXCLUDED FROM INCOME OF ENTERPRISE.—There shall be

excluded from the gross income of the enterprise as to which an election has been made under subsection (a) any item of gross income (computed without regard to the adjustments provided in section 543(b)(3) or (4)) if, but for this paragraph, such item (adjusted, where applicable, as provided in section 543(b)(3) or (4)) would constitute personal holding company income (as defined in section 543(a)) of such enterprise. "(2)

INCOME AND DEDUCTIONS OF OWNERS.—Items excluded

from the gross income of the enterprise under paragraph (1), and the expenses attributable thereto, shall be treated as the income and deductions of the proprietor or partners (in accordance with their distributive shares of partnership income) of such enterprise. "(3)

DiSTRlBUnONS.—If—

" (A) the amount excluded from gross income under paragraph (2) exceeds the expenses attributable thereto, and " (B) any portion of such excess is distributed to the proprietor or partner during the year earned, such portion shall not be taxed as a corporate distribution. The portion of such excess not distributed during such year shall be considered as paid-in surplus or as a contribution to capital as of the close of such year." (6)

26 USC 6501.

PANY TAX.—Section 6501(f) (relating to personal holding company tax) is amended by striking out "gross income, described in section 543(a)," and inserting in lieu thereof "gross income and adjusted ordinarj'^ gross income, described in section 543,". (1)

26 USC 614.

ASSESSMENT AND COLLECTION OF PERSONAL HOLDING COM-

EFFECTIVE DATES.—

(1) The amendments made by this section (other than by subsections (c)(1), (f), (g), and (j)) shall apply to taxable years beginning after December 31, 1963. (2) The amendment made by subsection (c)(1) shall apply to taxable years beginning after October 16, 1962. (3) The amendments made by subsections (f) and (^) shall apply to distributions made in any taxable year of the distributing corporation beginning after December 31, 1963. (4) The amendments made by subsection (j) shall apply in respect of decedents dying after December 31, 1963. (5) Subsection (li) shall apply to taxable years beginning after December 31, 1963. SEC. 226. TREATMENT OF PROPERTY IN CASE OF OIL AND GAS WELLS. ^^^ jjj^ GENERAL.—Section 614(b) (relating to special rule as to operating mineral interests) is amended to read as follows: " (b) Si'KCiAL RULES AS TO OPERATING MINERAL INTERESI^S IX O I L AND GAS WKFJ.S.—In the case of oil and gas wells—

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