Page:United States Statutes at Large Volume 96 Part 1.djvu/624

 96 STAT. 582

PUBLIC LAW 97-248—SEPT. 3, 1982 "(H) any amount on which the person making payment is required to withhold a tax under section 1451 (relating to tax-free covenant bonds), or would be so required but for section 1451(d) (relating to benefit of personal exemptions), and "(I) except to the extent otherwise provided in regulations, any amount not described in the foregoing provisions of this paragraph which is paid outside the United States and is income from sources outside the United States. "(3) ADJUSTMENT FOR PENALTY BECAUSE OF PREMATURE WITHDRAWAL OF FUNDS FROM TIME SAVINGS ACCOUNTS OR DEPOSITS.—

To the extent provided in regulations, the amount of any interest on a time savings account, certificate of deposit, or similar class of deposits shall be appropriately reduced for purposes of this suchapter by the amount of any penalty imposed for the premature withdrawal of funds. "(b) DIVIDEND DEFINED.—For purposes of this subchapter— "(1) GENERAL RULE.—The term 'dividend' means— "(A) any distribution by a corporation which is a dividend (as defined in section 316), and "(B) any payment made by a stockbroker to any person as a substitute for a dividend (as so defined). "(2) SUBCHAPTER S DISTRIBUTIONS AFTER CLOSE OF YEAR.—The

95 Stat. 287.

term 'dividend' includes any distribution described in section 1375(f) (relating to distributions by electing small business corporations after the close of the taxable year). "(3) EXCEPTIONS.—The term 'dividend' shall not include— "(A) any amount paid as a distribution of stock described in section 305(e)(2)(A) (relating to reinvestment of dividends in stock of public utilities), "(B) any amount which is treated as a taxable dividend by reason of section 302 (relating to redemptions of stock), 306 (relating to disposition of certain stock), 356 (relating to receipt of additional consideration in connection with certain reorganizations), or 1081(e)(2) (relating to certain distributions pursuant to order of the Securities and Exchange Commission), "(C) any amount described in subparagraph (D), (E), or (F) of subsection (a)(2), "(D) to the extent provided in regulations, any amount paid by a foreign corporation not engaged in a trade or business in the United States, "(E) any amount which is a capital gain dividend distributed by— "(i) a regulated investment company (as defined in section 852(b)(3)(C)), or "(ii) a real estate investment trust (as defined in section 857(b)(3)(C)), "(F) any amount which is an exempt-interest dividend of a regulated investment company (as defined in section 852(b)(5)(A)), "(G) any amount paid or treated as paid by a regulated investment company during a year if, under regulations prescribed by the Secretary, it is anticipated that at least 95 percent of the dividends paid or treated as paid during such year (not including capital gain distributions) will be exempt-interest dividends, and

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