Page:United States Statutes at Large Volume 92 Part 3.djvu/263

 PUBLIC LAW 95-600—NOV. 6, 1978

92 STAT. 2895

additional tax equal to the excess of any tax resulting from recomputing a prior year's investment credit in accordance with section 47 over the investment credit of the GSOC for its taxable 26 USC 47. year. "SEC. 1394. RULES APPLICABLE TO DISTRIBUTIONS OF AN ELECTING GSOCs.

26 USC 1394.

"(a) SHAREHOLDER INCOME ACCOUNT.—An electing GSOC shall establish and maintain a shareholder income account which account shall be— "(1) increased at the close of the GSOCs taxable year by an amount equal to the GSOC's taxable income for such year, and "(2) decreased, but not below zero, on the first day of the GSOC's taxable year by the amount of any GSOC distribution to the shareholders of such GSOC made or treated as made during the prior taxable year. "Ob) TAXATION OF DISTRIBUTIONS.—Distributions by an electing

GSOC shall be treated as— "(1) a distribution of previously taxed income to the extent such distribution does not exceed the balance of the shareholder income account as of the close of the taxable year of the GSOC, and "(2) a distribution to which section 301(a) applies but only to 26 USC 301. the extent such distribution exceeds the balance of the shareholder income account as of the close of the taxable year of the GSOC. "(c) DISTRIBUTIONS NOT TREATED AS A DIVIDEND.—Any amounts

includible in the gross income of any individual by reason of ownership of stock in a GSOC shall not be considered as a dividend for purposes of section 116. 26 USC 116. "(d) REGULATIONS.—The Secretary shall have authority to prescribe by regulation, rules for treatment of distributions in respect of shares of stock of the GSOC that have been transferred during the taxable year.". "SEC. 1395. ADJUSTMENT TO BASIS OF STOCK OF SHAREHOLDERS.

26 USC 1395.

"The basis of a shareholder's stock in an electing GSOC shall be increased by the amount includible in the gross income of such shareholder under section 1393, but only to the extent to which such Ante, p. 2894. amount is actually included in the gross income of such shareholder. "SEC. 1396. MINIMUM DISTRIBUTIONS.

26 USC 1396.

"(a) GENERAL RULE.—A GSOC shall distribute at least 90 percent of its taxable income for any taxable year by January 31 following the close of such taxable year. Any distribution made on or before January 31 shall be treated as made as of the close of the preceding taxable year. "(b) IMPOSITION OF TAX IN CASE OF FAILURE TO MAKE MINIMUM

DISTRIBUTIONS.—If a GSOC fails to make the minimum distribution requirements described in subsection (a), there is hereby imposed a tax equal to 20 percent of the excess of the amount required to be distributed over the amount actually distributed. "SEC. 1397. SPECIAL RULES APPLICABLE TO AN ELECTING GSOC. "(a) GENERAL RULE.—The current earnings and profits of an

electing GSOC as of the close of its taxable year shall not include the amount of taxable income for such year which is required to be

26 USC 1397.

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