Page:United States Statutes at Large Volume 83.djvu/652

 624

PUBLIC LAW 91-172-DEC. 30, 1969

[33 g^

exchanges of qualifying securities exceed the net short-term cat) ital losses of the taxable year from such sales or exchanges such" excess shall be considered as gain from the sale of a capital asset held for more than 6 months to the extent it does not exceed the net gain on sales and exchanges described in paragraph (1). "(3) SPECIAL RULES.—For purposes of this subsection— " (A) The term 'qualifying security'means a bond, debeiiture, note, or certificate or other evidence of indebtedness helri by a bank on July 11, 1969. ^ " (B) The amount treated as capital gain or loss from the sale or exchange of a qualifying security shall be determined by multiplying the amount of capital gain or loss from the t'jr.IJf G sale or exchange of such security (determined without regard to this subsection) by a fraction, the numerator of which is the number of days before July 12, 1969, that such security was held by the bank, and the denominator of which is the number of days the security was held by the bank." 26 USC 1 2 4 ' ^^3

72 Stat. 693; 15 USC 684.

(^) CONFORMING AMENDMENT.—Paragraph (1) of section 1243

(relating to loss of a small business investment company) is amended to read as follows: "(1) a loss is on stock received pursuant to the conversion privilege of convertible debentures acquired pursuant to section 304 of the Small Business Investment Act of 1958, and". (c) CLERICAL AMENDMENT.—The heading for section 582 is amended to read as follows: "SEC. 582. BAD DEBTS, LOSSES, AND GAINS WITH RESPECT TO SECURITIES HELD BY FINANCIAL INSTITUTIONS." (d)

EFFECTIVE DATE.—

(1) IN GENERAL.—The amendments made by this section shall apply to taxable years beginning after July 11, 1969. (2)

ELECTION FOR SMALL BUSINESS INVESTMENT COMPANIES AND BUSINESS DEVELOPMENT CORPORATIONS.—Notwithstanding para-

- graph (1), in the case of a financial institution described in section Ante, p. 618. 586(a) of tliB Internal Revenue Code of 1954, the amendments made by this section shall not apply for its taxable years beginning after July 11, 1969, and before July 11, 1974, unless the taxpayer so elects at such time and in such manner as shall be prescribed by the Secretary of the Treasury or his delegate. Such election shall be irrevocable and shall apply to all such taxable years. SEC. 434. LIMITATION ON DEDUCTION FOR DIVIDENDS RECEIVED B Y MUTUAL SAVINGS BANKS, ETC. ^g^8A Stat. 204; (a) SPECIAL LIMITATION.—Part II of subchapter H of chapter 1 is 26 USC 591. amended by adding at the end thereof the following new section: "SEC. 596. LIMITATION ON DIVIDENDS RECEIVED DEDUCTION. Ante, pp. 620, iij^ ^-j^^ ^ g ^ QJ ^^^ orgaulzation to which section 593 applies and 622 which computes additions to the reserve for losses on loans for the taxable year under section 593(b)(2), the total amount allowed under 80 s!a!' 1558 ^' sectlous 243, 244, and 245 (determined without regard to this section) for the taxable year as a deduction with respect to dividends received shall be reduced by an amount equal to the applicable percentage for M- — . . such year (determined under subparagraphs (A) and (B) of section •^'^ 593(b)(2)) of such total amount."

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