Page:United States Statutes at Large Volume 85.djvu/575

 85 STAT. ]

PUBLIC LAW 92-178-DEC. 10, 1971

545

the immediately preceding consecutive taxable years for which the corporation was a DISC. " (B) Distributions described in subparagraph (A) shall be deemed to be received in equal installments on the last day of each of the 10 taxable years of the corporation following the year of the termination or disqualification described in subparagraph (A) (but in no case over more than the number of immediately preceding consecutive taxable years during which the corporation was a D I S C). "(c) GAIN ON DISPOSITION OF STOCK I N A DISC.—If a shareholder

disposes of stock in a D I S C or former D I S C, any gain recognized on such disposition shall be included in gross income as a dividend to the extent of the accumulated D I S C income of such D I S C or former D I S C which is attributable to such stock and which was accumulated in taxable years of such corporation during the period or periods the stock disposed of was held by such shareholder. If stock of the D I S C or former D I S C is disposed of in a transaction in which the separate corporate existence of the D I S C or former D I S C is terminated other than by a mere change in place of organization, however ejffected, any gain realized on the disposition of such stock in the transaction shall be recognized notwithstanding any other provision of this title to the extent of the accumulated D I S C income of such D I S C or former D I S C which is attributable to such stock and which was accumulated in taxable years of such corporation during the period or periods the stock disposed of was held by the stockholder which disposed of such stock, and such gain shall be included in gross income as a dividend. " (d) FOREIGN INVESTMENT ATTRIBUTABLE TO DISC.EARNINGS.—For

the purposes of this part— "(1) IN GENERAL.—The amount of foreign investment attributable to producer's loans of a D I S C for a taxable year shall be the smallest of— " (A) the net increase in foreign assets by members of the controlled group (as defined in section 993(a)(3)) which includes the D I S C, " (B) the actual foreign investment by domestic members of such group, or " (C) the amount of outstanding producer's loans by such D I S C to members of such controlled group. "(2) N E T INCREASE I N FOREIGN ASSETS.—The term 'net increase in foreign assets' of a controlled group means the excess of— " (A) the amount incurred by such group to acquire assets (described in section 1231(b)) located outside the United otates over, " (B) the sum of— "(i) the depreciation with respect to assets of such group located outside the United States; "(ii) the outstanding amount of stock or debt obligations of such group issued after December 31, 1971, to persons other than the United States persons or any member of such group; "(iii) one-half the earnings and profits of foreign members of such group and foreign branches of domestic members of such group; "(iv) one-half the royalties and fees paid by foreign members of such group to domestic members of such group; and "(v) the uncommitted transitional funds of the group as determined under paragraph (4).

Ante,

p. 538.

68A Stat. 325; 26 USC u'si.

�