Page:United States Statutes at Large Volume 83.djvu/629

 83 STAT. ]

PUBLIC LAW 91-172-DEC. 30, 1969

601

"(2) ELECTION.—With respect to any December 31 after 1969 and before 1975, the component members of a controlled group of corporations shall elect (at such time and in such manner as the Secretary or his delegate shall by regulations prescribe) which component member of such group shall be allowed for its taxable year which includes such December 31 the surtax exemption, the amount under section 535(c)(2) and (3), or the small business SSA Stat. iso; deduction limitation which is not reduced under paragraph (1), ^^ ^*^** ^^*°' "(b) DIVIDENDS RECEIVED BY CORPORATIONS.— Ul) GENERAL RULE.—If—

" (A) an election of a controlled group of corporations (as defined in paragraph (1), or in so much of paragraph (4) as relates to paragraph (1), of section 1563(a)) under section ^^ ^*^*- ^^o. 1562(a) (relating to privilege of a controlled group of cor- ^"^^' P- ^°°porations to elect to have each of its component members make its returns without regard to section 1561) was made ' ' ''"' '•"' on or before April 22, 1969, and " (B) such election is effective with respect to the taxable year of each component member of such group which includes December 31, 1969, then, with respect to a dividend distributed on or before December 31, 1977, out of earnings and profits of a taxable year which includes a December 31 after 1969 and before 1975, subsections (a)(3) and (b) of section 243 (relating to dividends received by H ^g^- ^^^ corporations) shall be applied to such component members comprising an affiliated group (as defined in section 243(b)(5)) in the manner set forth in paragraph (2). ' j i: " (2) SPECIAL RULES.—

" (A) An election under section 243(b)(2) may be made for a taxable year which includes a December 31 after 1969 and before 1975, notwithstanding that an election under section 1562(a) is in effect for the taxable year. " (B) Section 243(b)(1)(B) (ii) shall not apply with respect to a dividend distributed on or before December 31, 1977, out of earnings and profits of a taxable year which includes a December 31 after 1969 and before 1975 for which an election under section 1562(a) is in effect, and in lieu of the percentage specified in section 243(a)(3) with respect to such dividend, the percentage shall be the percentage set forth in the following schedule: "If the dividend is distributed out of the earnings and profits of the distributing corporation's taxable year which includes— December 31, 1970 December 31, 1971 December 31, 1972 December 31, 1973 December 31, 1974

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The percentage shall be— 87% percent. 90 percent. 921/3 percent. 95 percent. 971/3 percent.

" (C) For taxable years which include a December 31 after 1969 for which an election under section 1562(a) is in effect, section 243(b)(3)(C)(v) shall not be applied to limit the number of surtax exemptions.

'(c) CERTAIN SHORT TAXABLE YEARS.—If—

"(1) a corporation has a short taxable year beginning after December 31, 1969, and ending before December 31, 1974, which does not include a December 31, and

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