90
PUBLIC LAW 88-272-FEB. 26, 1964
[78 STAT.
" (C) ADJUSTED POST-1963 EARNINGS AND PROFITS EXCEED
a ^^e^ ^*79 ^^^' "ae'usc 542.
QUALIFIED INDEBTEDNESS.—In the case of any corporation, the taxable year referred to in this subparagraph is the first taxable year at the close of which its adjusted post-1963 earnings and profits equal or exceed the amount of such corporation's qualified indebtedness on January 1, 1964. For purposes of the preceding sentence, the term 'adjusted post-1963 earnings and profits' means the sum of— " (i) the earnings and profits of such corporation for taxable ^ears beginning after December 31, 1963, without diminution by reason of any distributions made out of such earnings and profits, and "(ii) the deductions allowed for taxable years beginning after December 31, 1963, for exhaustion, wear and tear, obsolescence, amortization, or depletion. "(3) CORPORATIONS REFERRED TO.—For purposes of paragraphs (1) and (2), a corporation referred to in this paragraph is a corporation which for at least one of the two most recent taxable years ending before the date of the enactment of this subsec^^^^ ^^* ^^^ ^ pcTsoual holding company under section 542, but would have been a personal holding company under section 542 for such taxable year if the law applicable for the first taxable year beginning after December 31, 1963, had been applicable to such taxable year. "(4) MISTAKE AS TO APPLICABILITY OF SUBSECTION.—An election made under this section by a qualified electing shareholder of a corporation in which such shareholder states that such election is made on the assumption that such corporation is a corporation referred to in paragraph (3) shall haA^e no force or effect if it is determined that the corporation is not a corporation referred to in paragraph (3). " (h) EXCEPTION FOR CERTAIN CORPORATIONS.— (1) GENERAL RLTI^E.—Except as provided in paragraph
Ante. p. 89.
26 USC 332.
(2), in the case of a corporation referred to in section 333(g)(3) of ^}^Q Internal Revenue Code of 1954 (as added by subsection (g) of this section), the amendments made by this section (other than subsections (f) and (g)) shall not apply if there is a complete liquidation of such corporation and if the distribution of all the property under such liquidation occurs before January 1, 1966. (2) EXCEPTION.—Paragraph (1) shall not apply to any liquida^JQJJ ^Q which section 332 of the Internal Revenue Code of 1954 applies unless— (A) the corporate distributee (referred to in subsection (b)(1) of such section 332) in such liquidation is liquidated in a complete liquidation to which such section 332 does not apply, and (B) the distribution of all the property under such liquidation occurs before the 91st day after the last distribution referred to in paragraph (1) and before Januarj'^ 1, 1966.
(i) DEDUCTION FOR AMORTIZATION OF INDEBTEDNESS.—
26 USC 545.
^1) Section 545(a) (relating to definition of undistributed personal holding company income) is amended by striking out "subsection (b) " and inserting in lieu thereof "subsections (b) and (c) ". (2) Section 545 is amended by adding at the end thereof the following new subsection: " (c) SPECIAL ADJUSTMENT TO TAXABLE INCOME.—
"(1) I N GENER.\L.—Except as otherwise provided in this subsection, for purposes of subsection (a) there shall be allowed as
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