1012
PUBLIC LAW 86-780-5EPT. 14, 1960
[74 S T A T.
" (d) SPECIAL, RULE FOR APPLICATION OF FOREIGN TAX CREDIT W H E N OVERALL LIMITATION APPLIES.—
68AStat.^29o.^
68A Stat. 285.
"(1) IN GENERAL.—If the affiliated group includes one or more Western Hemisphere trade corporations (as defined in section 921), and if for the taxable year an election under section 904(b) (1) (relating to election of overall limitation on foreign tax credit) is in effect, then the amount of taxes paid or accrued to foreign countries and possessions of the United States by such Western Hemisphere trade corporations which may be taken into account for purposes of section 901 shall be reduced by the amount (if any) by which— " (A) the amount of such taxes (or, if smaller, the amount of the tax which would be computed under subsection (a), if such corporations were not Western Hemisphere trade corporations, with respect to the portion of the consolidated taxable income attributable to such corporations), exceeds " (B) the amount of the tax computed under subsection (a) with respect to the portion of the consolidated taxable income attributable to such corporations. "(2)
ADJUSTMENT I N CASE OF CERTAIN PUBLIC UTILITIES.—So
much of any reduction under paragraph (1) as is attributable to taxes paid or accrued to foreign countries and possessions of the United States by one or more corporations which are both Western Hemisphere trade corporations and regulated public utilities shall be decreased by the excess of— " (A) the amount of tax computed under subsection (a) with respect to the portion of the consolidated taxable income attributable to income derived, by the corporations in the affiliated group which arejiot Western Hemisphere trade corporations, from sources within the foreign countries referred to in paragraph (3)(B), over " (B) the amount of taxes paid or accrued to such foreign countries by the corporations referred to in subparagraph (A). This paragraph shall apply only if the corporations described in subparagraph (A) derive 80 percent or more, of the gross income (computed without regard to capital gains and losses) which they derive from sources within the foreign countries described in paragraph (3)(B), from regulated public utilities and from operations as regulated public utilities. "(3)
SPECIAL RULES.—
" (A) For purposes of paragraph (2), a corporation is a regulated public utility only if it is a regulated public utility within the meaning of subparagraph (A) (other than clauses' (ii) and (iii) thereof) or (D) of subsection (c)(1). For purposes of the preceding sentence, subsection (c)(2) shall be applied as if subsection (c)(1) were limited to subparagraphs (A)(i) and (D) thereof. " (B) For purposes of paragraph (2), the foreign countries referred to m this subparagraph include only any country from which any public utility referred to in the first sentence of paragraph (2) derives the principal part of its income. " (C) For purposes of paragraph (1)(A), the amount of tax which would be computed with respect to the portion of the consolidated taxable income attributable to any corporation or corporations shall be determined without regard to the increase of 2 percent provided in subsection (a). "
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