Page:United States Statutes at Large Volume 90 Part 2.djvu/178

 90 STAT. 1646

26 USC 901.

PUBLIC LAW 94-455—OCT. 4, 1976 (as defined in section 9 9 2 (a)) shall be treated as dividends from a foreion corporation to the extent such dividends are treated under part 1 as income from sources without the United States."'. (^2) Section 901 (relating to taxes of foreign countries and possessions of the United States) is amended by redesignating subsection (g) as (h) and by inserting after subsection (f) the following new subsection: " (g) CEIITAIX TAXES P A I D W I T H RESPECT TO DISTRIBUTIOXS F R O M

Ante, p. 1643.

26 USC 904. Ante, p. 1629.

POSSESSIOXS COUPOIUTIOXS.—• "'(l) I x GEXERAE.—For purposes of this chapter, any tax of a foreign country or possession of the United States which is paid or accrued with respect to any distribution from a corporation, to the extent that such distribution is attributable to periods during which such corporation is a possessions corporation, shall not be treated as income, w a r profits, or excess profits taxes paid or accrued to a foreign country or possession of the United States, and no deduction shall be allowed under this title with respect to any amount so paid or accrued. " (2) PossEssioxs coRPORATiox.—For purposes of paragraph (1), a corporation shall be treated as a possessions corporation for any period during which an election vnider section 9;'> applied to such corporation or during whicfi section 9;]1 (as in effect on the day before the date of the enactment of the T a x Reform Act of 197) applied to such corporation." (e) AMEXOMEXT o r SECTIOX 904(b).—Section 904(b) (as amended by sections 1031 and 1034(a) of this Act) is amended by adding at the end thereof the following new paragraph: " (4) CooPtDiXATiox wrrii SECTIOX D.-^C.—For purposes of subsection (a), in the case of a corporation, the taxable income shall not include any portion thereof taken into account for purposes of the credit (if any) allowed by section 936." (f)

26 USC 243.

26 USC 243. 26 USC 246.

(1) Section 2 4 3 (b)(1) (defining qualifying dividends) is amended by adding "either" a t the end of subparagraph (A), by striking out the period a t the end of subparagraph (B) (ii) and inserting in lieu thereof a comma and "or", and by adding at the end thereof the following ncAv subparagraph: " (C) such dividends are paid by a corporation with respect to which an election undei- section 936 is in effect for the taxable year in which such dividends are paid.". (2) Section 243(b)(5) (defining affiliated g r o u p) is amended by inserting '% ir)04(b)(4), " immediately after "1504(1)) (2) ". " (3) Section 246(a) (relating to dividends from certain corporations) is amended to read as follows: "(a)

26 USC 1504.

DiviDEXDs R E ( E I \ E D DEDUCTION ALLOWED.—

DEDICTTOX X O T ALLOWED FOR DniDEXDs F R O M CERTATX COR-

PORATJOXS.—The deductions allowed by sections 243, 244, and 245 shall not apply to any dividend from a corporation which, foi- the taxable year of the corporation in which the distribution is made, or for the next preceding taxable year of the corporation, is a corporation exempt from tax undei- section 501 (relating to certain charitable, etc.. organizations) oi- section 521 (I'elating to farmers' cooperative associations)." (g)(V)XsoLTDATED R E T I H X TREATMEXT.—Section 1504(1)) (4) (defining includible cor))ration) is amended to read as follows: " (4) CorpoT-ations with respect to which an election under section 936 (relating to possession tax credit) is in effect for the taxable year.".

�