90 STAT. 1626 26 USC 907.
PUBLIC LAW 94-455—OCT. 4, 1976 (b) COORDINATION W I T H SECTION 907.—Section 907 is amended—
(1) by striking out the last sentence of subsection (b) (as amended by section 1 0 3 5 (b)), and (2) by striking out subsection (f), and by redesignating subsection (g) as subsection (f). 26 USC 904
note.
(c) EFFECTIVE D A T E S. —
(1) IN GENERAL.—Except as provided in paragraph s (2) and (3), the amendments made by subsections (a) and (b)(2) shall apply to losses sustained in taxable years beginning after December 31, 1975, and the amendment made by subsection (b)(1) shall apply to taxable years beginning after December 31, 1975. (2) OBLIGATIONS OF FOREIGN GOVERNMENTS.—The ameiidments
made by subsection (a) shall not apply to losses on the sale, exchange, or other disposition of bonds, notes, or other evidences of indebtedness issued before May 14, 1976, by a foreign government or instrumentality thereof for the acquisition of property located in that country or stock of a corporation (created or organized in or under the laws of that foreign country) or indebtedness of such corporation. (3) SUBSTANTIAL
WORTHLESSNESS
BEFORE
ENACTMENT.—The
amendments made by subsection (a) shall not apply to losses incurred on the loss from stock or indebtedness of a corporation in which the taxpayer owned a t least 10 percent of the voting stock and which has sustained losses i n 3 out of the last 5 taxable years beginning before January 1, 1976, which has sustained a n overall loss for those 5 years, and with respect to which the taxpayer has terminated or will terminate all operations by reason of sale, liquidation, o r other disposition before January 1, 1977, of such corporation o r its assets. (4) L I M I T A T I O N BASED ON DEFICIT I N EARNINGS AND PROFITS.^—If
paragraph (3) would apply to a taxpayer b u t for the fact that the loss is sustained after December 31, 1976, and if the loss is sustained in a taxable year beginning before January 1, 1979, the amendments made by subsection (a) shall not apply to such loss to the extent that there was on December 31, 1975, a deficit in earnings and profits in the corporation from which the loss arose. SEC. 1033. DIVIDENDS FROM LESS DEVELOPED COUNTRY CORPORATIONS TO BE GROSSED UP FOR PURPOSES OF DETERMINING UNITED STATES INCOME AND FOREIGN TAX CREDIT AGAINST THAT INCOME. (a) FOREIGN TAXES D E E M E D P A I D BY DOMESTICORPORATIONS.—
26 USC 902.
Section 902 (relating to credit for corporate stockholders in foreign corporations) is amended to read as follows:
"SEC. 902. CREDIT FOR CORPORATE STOCKHOLDER IN FOREIGN CORPORATION. " (a) TREATMENT OF TAXES P A I D BY FOREIGN CORPORATION.—For
purposes of this subpart, a domestic corporation which owns a t least 10 percent of the voting stock of a foreign corporation from which i t receives dividends in any taxable year shall be deemed to have paid the same proportion of any income, war profits, or excess profits taxes paid o r deemed to be paid by such foreign corporation to any foreign country o r to any possession of the United States, on or with respect to the accumulated profits of such foreign corporation from which such dividends were paid, which the amount of such dividends (determined without regard to section 78) bears to the amount of such
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