Page:United States Statutes at Large Volume 98 Part 1.djvu/1098

 98 STAT. 1050 26 USC 852.

PUBLIC LAW 98-369—JULY 18, 1984 852 (relating to requirements applicable to regulated investment companies) is amended by striking out "and" at the end of paragraph (1), by striking out the period at the end of paragraph (2) and inserting in lieu thereof ", and", and by adding at the end thereof the following new paragraph: "(3) either— "(A) the provisions of this part applied to the investment company for all taxable years ending on or after November 8, 1983, or "(B) as of the close of the taxable year, the investment company has no earnings and profits accumulated in any taxable year to which the provisions of this part (or the corresponding provisions of prior law) did not apply to it." (4) PROCEDURES SIMILAR TO DEFICIENCY DIVIDEND PROCEDURES

MADE APPLICABLE.—Section 852 is amended by adding at the end thereof the following new subsection: "(e) PROCEDURES SIMILAR TO DEFICIENCY DIVIDEND PROCEDURES MADE APPLICABLE.— "(1) IN GENERAL.—If—

"(A) there is a determination that the provisions of this part do not apply to an investment company for any taxable year (hereinafter in this subsection referred to as the 'nonRIC year'), and "(B) such investment company meets the distribution requirements of paragraph (2) with respect to the non-RIC year, for purposes of applying subsection (a)(3) to subsequent taxable years, the provisions of this part shall be treated as applying to such investment company for the non-RIC year. "(2) DISTRIBUTION REQUIREMENTS.—

"(A) IN GENERAL.—The distribution requirements of this paragraph are met with respect to any non-RIC year if, within the 90-day period beginning on the date of the determination (or within such longer period as the Secretary may permit), the investment company makes 1 or more qualified designated distributions and the amount of such distributions is not less than the excess of— "(i) the portion of the accumulated earnings and profits of the investment company (as of the date of the determination) which are attributable to the non-RIC year, over "(ii) any interest payable under paragraph (3). "(B) QUALIFIED DESIGNATED DISTRIBUTION.—For purposes of this paragraph, the term 'qualified designated distribution' means any distribution made by the investment company if— "(i) section 301 applies to such distribution, and "(ii) such distribution is designated (at such time and in such manner as the Secretary shall by regulations prescribe) as being taken into account under this paragraph with respect to the non-RIC year. "(C) EFFECT ON DIVIDENDS PAID DEDUCTION.—Any qualified designated distribution shall not be included in the amount of dividends paid for purposes of computing the dividends paid deduction for any taxable year. "(3) INTEREST CHARGE.—

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