92 STAT. 2848
PUBLIC LAW 95-600—NOV. 6, 1978 SEC. 362. DEFICIENCY DIVIDEND PROCEDURE FOR REGULATED INVESTMENT COMPANIES.
(a) GENERAL RULE.—Subchapter M of chapter 1 (relating to regulated investment companies and real estate investment trusts) is amended by adding at the end thereof the following new part: "PART III - PROVISIONS WHICH APPLY TO BOTH REGULATED INVESTMENT COMPANIES AND REAL ESTATE INVESTMENT TRUSTS 26 USC 860.
26 USC 852, 857.
"Sec. 860. Deduction for deficiency dividends. "SEC. 860. DEDUCTION FOR DEFICIENCY DIVIDENDS.
"(a) GENERAL RULE.—If a determination with respect to any qualified investment entity results in any adjustment for any taxable year, a deduction shall be allowed to such entity for the amount of deficiency dividends for purposes of determining the deduction for dividends paid (for purposes of section 852 or 857, whichever applies) for such year. "(b) QUALIFIED INVESTMENT ENTITY DEFINED.—For purposes of this section, the term 'qualified investment entity' means— "(1) a regulated investment company, and "(2) a real estate investment trust. "(c) RULES FOR APPLICATION OF SECTION.— "(1) INTEREST AND ADDITIONS TO TAX DETERMINED WITH RESPECT TO THE AMOUNT OF DEFICIENCY DIVIDEND DEDUCTION ALLOWED.—
26 USC 6601.
For purposes of determining interest, additions to tax, and additional amounts— "(A) the tax imposed by this chapter (after taking into account the deduction allowed by subsection (a)) on the qualified investment entity for the taxable year with respect to which the determination is made shall be deemed to be increased by an amount equal to the deduction allowed by subsection (a) with respect to such taxable year, "(B) the last date prescribed for payment of such increase in tax shall be deemed to have been the last date prescribed for the payment of tax (determined in the manner provided by section 6601(b)) for the taxable year with respect to which the determination is made, and "(C) such increase in tax shall be deemed to be paid as of the date the claim for the deficiency dividend deduction is filed. "(2) CREDIT OR REFUND,—If the allowance of a deficiency dividend deduction results in an overpayment of tax for any taxable year, credit or refund with respect to such overpayment shall be made as if on the date of the determination 2 years remained before the expiration of the period of limitations on the filing of claim for refund for the taxable year to which the overpayment relates. "(d) ADJUSTMENT.—For purposes of this section— "(1) ADJUSTMENT IN THE CASE OF REGULATED INVESTMENT COM-
26 USC 561. 26 USC 852.
PANY.—In the case of any regulated investment company, the term 'adjustment' means— "(A) any increase in the investment company taxable income of the regulated investment company (determined without regard to the deduction for dividends paid (as defined in section 561)), "(B) any increase in the amount of the excess described in section 852(b)(3)(A) (relating to the excess of the net capital
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