Page:United States Statutes at Large Volume 83.djvu/632

 PUBLIC LAW 91-172-DEC. 30, 1969

604 72 Stat. 1680.

(2) by amending paragraphs (6) and (7) to read as follo^vs"(6)

Ante, p. 602.

DOLLAR LIMITATION OF CONTROLLED GROUP.—For purposes

of subsection (b) of this section— " (A) all component members of a controlled group shall be treated as one taxpayer, and " (B) the Secretary or his delegate shall apportion the dollar limitation contained in such subsection (^b) among the component members of such controlled group in such manner as he shall by regulations prescribe. " (7) CONTROLLED GROUP DEFINED.—For purposes of paragraphs (2) and (6), the term 'controlled group' has the meaning assigned to it by section 1563(a); except that, for such purposes, the phrase 'more than 50 percent' shall be substituted for the phrase 'at least 80 percent' each place it appears in section 1563(a)(1)." (g)

Ante, p. 600.

[33 ST^T

RETROACTIVE TERMINATION OF SECTION 1562 ELECTIONS.—If an

affiliated group of corporations makes a consolidated return for the taxable year which includes December 31, 1970 (hereinafter in this subsection referred to as "1970 consolidated return year"), then on or before the due date prescribed by law (including any extensions thereof) for filing such consolidated return such affiliated group of corporations may terminate the election under section 1562 of the Internal Revenue Code of 1954 with respect to any prior December 31 which is included in a taxable year of any of such corporations from which there is a net operating loss carryover to the 1970 consolidated return year. A termination of an election under this subsection shall be valid only if it meets the requirements of sections 1562(c)(1) and 1562(e) of such Code (other than making the termination before the expiration of the 3-year period specified in section 1562(e)). (h) EFFECTIVE DATTIS.—

(1) The amendments made by subsection (a) shall apply with respect to taxable years beginning after December 31, 1974. (2) The amendments made by subsection (b) shall apply with respect to taxable years beginning after December 31, 1969. (3) The amendments made by subsections (c), (d), (e), and (f) shall apply with respect to taxable years ending on or after December 31, 1970. Subtitle B—Debt-Financed Corporate Acquisitions and Related Problems

68A Stat. 76; Ante, p. 573. 26 USC 2 6 1.

SEC. 411. INTEREST ON INDEBTEDNESS INCURRED BY CORPORATION TO ACQUIRE STOCK OR ASSETS OF ANOTHER CORPORATION. (a) DISALLOWANCE OF INTEREST DEDUCTION.—Part IX of sub-

chapter B of chapter 1 (relating to items not deductible) is amended by adding at the end thereof the following new section: "SEC. 279. INTEREST ON INDEBTEDNESS INCURRED BY CORPORATION TO ACQUIRE STOCK OR ASSETS OF ANOTHER CORPORATION. " (a) GENERAL RULE.—No deduction shall be allowed for any

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interest paid or incurred by a corporation during the taxable year with respect to its corporate acquisition indebtedness to the extent that such interest exceeds— "(1) $5,000,000, reduced by "(2) the amount of interest paid or incurred by such corporation during such year on obligations (A) issued after December 31, 1967, to provide consideration for an acquisition described in paragraph (1) of subsection (b), but (B) which are not corporate acquisition indebtedness.

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