Page:United States Statutes at Large Volume 78.djvu/158

 116

Ante, p. 114, 26 USC 7701

76 Stat. 1031. 26 USC 904.

26^scr*i34?'

26 USC 1552.

Ante,^P.u3.

26 USC 1503.

PUBLIC LAW 88-272-FEB. 26, 1964

[78 STAT.

" (B) which is described in subparagraph (G) or ( II) of section 7701(a) (33),or " (C) which is a member of a regulated transportation system. " (2) REGULATED TRANSPORTATION" SYSTEM.—For purposes of this subsection, a corporation shall be treated as a member of a regulated transportation system for a taxable year if— " (A) it IS a member of an-affiliated group of corporations making a consolidated retutn for such taxaole year, and " (B) 80 percent or more of the aggregate gross income of the members of such affiliated group (computed without regard to dividends and capital gains and losses) for such taxable year is derived from sources described in paragraph (1)(A). For purposes of subparagraph (B), income derived by a corporation described in subparagraph (G) or (H) of section 7701(a) (33) from leases described m subparagraph (G) thereof shall be considered as derived from sources described in paragraph (1) (A)." (6) Section 904(g)(2) (relating to cross references for purposes of the limitation on the for e i ^ tax credit) is amended bjstriking out "section 1503(d)"* and inserting in lieu thereof "section 1503(b)-'. ('^). 'Section 1341(b)(2) (relating to special rules for the computation of tax where taxpayer restores substantial amount held under claim of right) is amended by striking out " ( a s defined in section 1503(c) without regard to paragraph (2) thereof)" and inserting in lieu thereof " ( a s defined in section 7701(a) (33) without regard to the limitation contained in the last two sentences thereof)". (8) Section 1552(a)(3) (relating to the allocation of tax liability among members of an affiliated group of corporations filing consolidated returns) is amended by striking out "(determined without regard to the 2 percent increase provided by section 1503(a))". (c) EFFECTIVE DATE.—The amendments made by subsections (a) and (b) shall apply with respect to taxable years beginning after December 31, 1963.

SEC. 2 5 REDUCTION OF SURTAX EXEMPTION IN CASE OF CERTAIN 3. CONTROLLED CORPORATIONS, ETC. (a) IN GENERAL.—Subchapter B of chapter 6 (related rules for <ronsolidated returns) is amended by adding at the end thereof the following new part: "PART II—CERTAIN CONTROLLED CORPORATIONS "Sec. l."»(il. Surtax exemptions in case of certain controlled corporations. "Sec. 1563. Definitions and si»ecial rules. "SEC. 1561. SURTAX EXEMPTIONS IN CASE OF CERTAIN CONTROLLED CORPORATIONS. " (a) GENERAL RULE.—If a corporation is a component member
 * §©<•. 1562. Privilege of groups to elect multiple surtax exemptions.

of a controlled group of corporations on a December 31, then for purposes of this subtitle the surtax exemption of such corporation for the taxable year which includes such December 31 shall be an amount equal to— "(1) $25,000 divided by the number of corporations which a.re component members of such group on such December 31, or "(2) if all such component members consent (at such time and

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