77TH CONG. , 2D SESS.-CH. 619-OCT. 21 , 1942 taxpayer beginning after December 31, 1938, and not beginning after December 31, 1941, such amendments shall be applicable to such tax- able years. SEC. 183. CONSOLIDATED INCOME. Section 501 (c) is amended by inserting at the end thereof the fol- lowing: "The preceding sentence shall apply only if the common par- ent corporation is a common parent of an affiliated group of railroad corporations which would be eligible to file consolidated returns under section 141 prior to its amendment by the Revenue Act of 1942. SEC. 184 . COMPUTATION OF UNDISTRIBUTED SUBCHAPTER A NET INCOME. (a) Section 504 (relating to deductions from subchapter A net income) is amended by adding at the end thereof the following: "(d) Amounts distributed before January 1, 1944, in redemption of preferred stock outstanding before January 1, 1934 (including any preferred stock issued after January 1, 1934, in lieu of such pre- viously outstanding preferred stock) if such distributions are made by a corporation the aggregate of whose gross sales and gross receipts arising from manufacturing, commercial, processing, and service operations during the four-year period immediately before Jan- uary 1, 1934, exceeded the aggregate of its gross receipts from dividends, interest, royalties, annuities, and gains from the sale or exchange of stock or securities during such period." (b) The amendment made by this section shall be applicable to taxable years beginning after December 31, 1940. SEC. 185. DEFICIENCY DIVIDENDS OF PERSONAL HOLDING COM- PANIES. Section 506 (relating to credits and refunds in case of deficiency dividends) is amended by inserting at the end thereof the following new subsections: "(g) RATE FOR TAXABLE YEARs 1939, 1940, AND 1941.- If the defi- ciency is established or determined for a taxable year which begins after December 31, 1939, and does not begin after December 31, 1941, the rates under subsections (a) and (b) used in determining the amount of the credit or refund shall be 711/ per centum in lieu of 65 per centum and 821/ per centum in lieu of 75 per centum. "(h) RATE FOR TAXABLE YEARS AFTER 1941. - If the deficiency is established or determined for a taxable year which begins after December 31, 1941, the rates under subsections (a) and (b) used in determining the amount of the credit or refund shall be 75 per centum in lieu of 65 per centum and 85 per centum in lieu of 75 per centurn." SEC. 186. DISTRIBUTIONS BY PERSONAL HOLDING COMPANIES. (a) DEFINITION OF DIVIDEND. - (1) AMENDMENT TO INTERNAL REVENUE coDE.-Section 115 (a) of the Internal Revenue Code (relating to definition of dividend) is amended by inserting at the end thereof the following new sentence: "Such term also means any distribution to its share- holders, whether in money or in other property, made by a cor- poration which, under the law applicable to the taxable year in which the distribution is made, is a personal holding company, or which, for the taxable year in respect of which the distribution 895 53 Stat. 105 . 26 U.S. C. 501 (c). 53 Stat. 58. 26 U.. c. 141. Ante, p . 858. 53 Stat. 107. 26U.S.C.§504; Supp. I, § 504. Ante, p. 829. Post, p. 896. 53 Stat. 108 . 26U..C. 606; Supp. I, I 506. 53 Stat. 46. 26U.S .C . 115(a). Ante, p. 875 . 56 STAT.]
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