Page:United States Statutes at Large Volume 90 Part 2.djvu/189

 90 STAT. 1657

PUBLIC LAW 94-455—OCT. 4, 1976 "(B) ExcEFnoNS.—Subparagraph (A) shall not apply— "(i) where the stock in the DISC and the trade or business are owned throughout the taxable year by members of the same controlled group, and "(ii) to the extent that the taxpayer's ownership of the stock in the DISC for the taxable year is proportionate to his ownership during the taxable year of the trade or business. " ( 1 0) D I S C BASE PERIOD ATTRIBUTED THROUGH SHAREHOLDERS IN CERTAIN CASES.— " (A) IN GENERAL.—If—

Regulations.

"(i) any person owns 5 percent or more of the stock of a DISC (hereinafter in this paragraph referred to as 'first D I S C), and "(ii) such person at any time during the base period of the first DISC owned 5 percent or more of the stock of a second DISC, then, to the extent provided in such regulations as the Secretary may prescribe to prevent circumvention of the application of subsection (b)(1)(E), an amount equal to such shareholder's share of the base period export gross receipts of the second DISC shall be added to the base period export gross receipts of the first DISC. "(B) OWNERSHIP OF STOCK.—For purposes of subparagraph (A), the ownership of stock shall be determined under section 318. 26 USC 318. "(f) SMALL DISCS.— " (1) ADJUSTED TAXABLE INCOME OF $100,000 OR LESS.—If

a

DISC has adjusted taxable income of $100,000 or less for a taxable year, subsection (b)(1)(E) shall not apply with respect to such year. " (2) SPECIAL RULE.—If a DISC has adjusted taxable income of more than $100,000 for a taxable year, then the amount taken into account under subsection (b)(1)(E) shall be deemed to be an amount equal to the excess (if any) of— "(A) the amount which would (but for this paragraph) be taken into account under subsection (b)(1)(E), over "(B) twice the excess (if any) of $150,000 over the adjusted taxable income. "(g) CERTAIN TRANSFERS OF DISC ASSETS.—If— "(1) a corporation owns, directly or indirectly, all of the stock of a subsidiary and a DISC, ^ "(2) the subsidiary has been engaged in the active conduct of a trade or business (within the meaning of section 355(b)) throughout the 5-year period ending on the date of the transfer and continues to be so engaged thereafter, and "(3) during the taxable year of the subsidiary in which its stock is transferred and its preceding taxable year, such trade or business gives rise to qualified export receipts of the subsidiary and the DISC, then, under such terms and conditions as the Secretary by regulations Regulations. shall prescribe, transfers of assets, stock, or both, will be deemed to be a reorganization within the meaning of section 368, a transaction to which section 355 applies, an exchange of stock to which section 351 applies, or a combination thereof. The preceding sentence shall apply only to the extent that the transfer or transfers involved are for the purpose of preventing the separation of the ownership of the stock in

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