Page:United States Statutes at Large Volume 124.djvu/3575

124 STAT. 3549 PUBLIC LAW 111–325—DEC. 22, 2010 (c) SHORT-TERM CAPITAL GAIN.—Subsection (a) of section 855 is amended by adding at the end the following: ‘‘For purposes of paragraph (2), a dividend attributable to any short-term capital gain with respect to which a notice is required under the Investment Company Act of 1940 shall be treated as the same type of dividend as a capital gain dividend.’’. (d) EFFECTIVE DATE.—The amendments made by this section shall apply to distributions in taxable years beginning after the date of the enactment of this Act. SEC. 305. RETURN OF CAPITAL DISTRIBUTIONS OF REGULATED INVESTMENT COMPANIES. (a) IN GENERAL.—Subsection (b) of section 316 is amended by adding at the end the following new paragraph: ‘‘(4) CERTAIN DISTRIBUTIONS BY REGULATED INVESTMENT COMPANIES IN EXCESS OF EARNINGS AND PROFITS.—In the case of a regulated investment company that has a taxable year other than a calendar year, if the distributions by the company with respect to any class of stock of such company for the taxable year exceed the company’s current and accumulated earnings and profits which may be used for the payment of dividends on such class of stock, the company’s current earnings and profits shall, for purposes of subsection (a), be allocated first to distributions with respect to such class of stock made during the portion of the taxable year which precedes January 1.’’. (b) EFFECTIVE DATE.—The amendment made by this section shall apply to distributions made in taxable years beginning after the date of the enactment of this Act. SEC. 306. DISTRIBUTIONS IN REDEMPTION OF STOCK OF A REGULATED INVESTMENT COMPANY. (a) REDEMPTIONS TREATED AS EXCHANGES.— (1) IN GENERAL.—Subsection (b) of section 302 is amended by redesignating paragraph (5) as paragraph (6) and by inserting after paragraph (4) the following new paragraph: ‘‘(5) REDEMPTIONS BY CERTAIN REGULATED INVESTMENT COMPANIES.—Except to the extent provided in regulations pre- scribed by the Secretary, subsection (a) shall apply to any distribution in redemption of stock of a publicly offered regu- lated investment company (within the meaning of section 67(c)(2)(B)) if— ‘‘(A) such redemption is upon the demand of the stock- holder, and ‘‘(B) such company issues only stock which is redeem- able upon the demand of the stockholder.’’. (2) CONFORMING AMENDMENT.—Subsection (a) of section 302 is amended by striking ‘‘or (4)’’ and inserting ‘‘(4), or (5)’’. (b) LOSSES ON REDEMPTIONS NOT DISALLOWED FOR FUND-OF- FUNDS REGULATED INVESTMENT COMPANIES.—Paragraph (3) of sec- tion 267(f) is amended by adding at the end the following new subparagraph: ‘‘(D) REDEMPTIONS BY FUND-OF-FUNDS REGULATED INVESTMENT COMPANIES.—Except to the extent provided in regulations prescribed by the Secretary, subsection (a)(1) shall not apply to any distribution in redemption of stock of a regulated investment company if— 26 USC 267 note. 26 USC 316 note. 26 USC 855 note. 26 USC 855.