PUBLIC LAW 100-203—DEC. 22, 1987
101 STAT. 1330-409
tion (by vote and value) is owned by the taxpayer. For purposes of the preceding sentence, stock described in section 1504(a)(4) shall not be taken into account." (c) MODIFICATIONS TO TAXABLE YEAR LIMITATIONS.—
(1) Subsection (b) of section 246 (relating to limitation on aggregate amount of deductions) is amended— ^ (A) by striking out "80 percent" in paragraph (1) and inserting in lieu thereof "the percentage determined under paragraph (3)", and (B) by adding at the end thereof the following new paragraph: "(3) SPECIAL RULES.—The provisions of paragraph (1) shall be applied— "(A) first separately with respect to dividends from 20percent owned corporations (as defined in section 243(c)(2)) and the percentage determined under this paragraph shall be 80 percent, and "(B) then separately with respect to dividends not from 20-percent owned corporations and the percentage determined under this paragraph shall be 70 percent and the taxable income shall be reduced by the aggregate amount of dividends from 20-percent owned corporations (as so defined)." (2) Subparagraph (B) of section 805(a)(4) is amended by striking out "shall be 80 percent of the life insurance company taxable income" and inserting in lieu thereof "shall be the percentage determined under section 246(b)(3) of the life insurance company taxable income (and such limitation shall be " applied as provided in section 2460)X3))". (d) CONFORMING AMENDMENTS.—
(1) Subparagraph (B) of section 245(c)(l) is amended by striking out "85 percent" and inserting in lieu thereof "70 percent (80 percent in the case of dividends from a 20-percent owned corporation as defined in section 243(c)(2))". (2) Paragraph (1) of section 246A(a) is amended by striking out "80 percent" and inserting in lieu thereof "70 percent (80 percent in the case of any dividend from a 20-percent owned ,,^, corporation as defined in section 243(c)(2))". ' V,,: (3) Subparagraph (A) of section 8540t)Xl) is amended by inserting before the period at the end thereof the following: "and such dividend shall be treated as received from a corporation which is not a 20-percent owned corporation". (4) Paragraph (2) of section 861(a) is amended— (A) by striking out "100/85th" and inserting in lieu
- i,,, thereof "100/70th", and
r; (B) by adding at the end thereof the following new sentence: "In the case of any dividend from a 20-p)ercent owned corporation (as defined in section 243(c)(2)), subparagraph (B) shall be applied by substituting '100/80th' for *100/70th'." (e) EFFECTIVE DATES.— 26 USC 243 note. (1) IN GENERAL.—Except as provided in paragraph (2), the amendments made by this section shall apply to dividends received or accrued after December 31, 1987, in taxable years ending after such date.
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