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TITLE 26-INTERNAL REVENUE CODE dividend is paid, qualifies under part II of subchapter M (sec. 856 and following). (c) Special rules for certain distributions For purposes of subsection (a)- (1) Any amount allowed as a deduction under section 591 (relating to deduction for dividends paid by mutual savings banks, etc.) shall not be treated as a dividend. (2) A dividend received from a regulated in- vestment company shall be subject to the limitations prescribed in section 854. (3) The amount of dividends properly allo- cable to a beneficiary under section 652 or 662 shall be deemed to have been received by the beneficiary ratably on the same date that the dividends were received by the estate or trust. (d) Certain nonresident aliens ineligible for exclusion In the case of a nonresident alien individual, subsection (a) shall apply only- (1) in determining the tax imposed for the taxable year pursuant to section 871(b)(1) and only in respect of dividends which are ef- fectively connected with the conduct of a trade or business within the United States, or (2) in determining the tax imposes for the taxable year pursuant to section 877(b). (Aug. 16, 1954, ch. 736, 68A Stat. 37; June 25, 1959, Pub. L. 86-69, § 3(a)(2), 73 Stat. 139; Sept. 14, 1960, Pub. L. 86-779, § 10(f), 74 Stat. 1009: Feb. 26, 1964, Pub. L. 88-272, title II, § 201(c), (d)(6)(C), 78 Stat. 32; Nov. 13, 1966, Pub. L. 89- 809, title I, § 103(g), 80 Stat. 1552; Oct. 4, 1976, Pub. L. 94-455, title X, § 10,51(h)(2), title XIX, § 1901(a)(20), 90 Stat. 1647, 1649, 1766.) AMENDMENT OF SUBSEC. (b) Subsec. (b) of this section amended by Pub. L. 94-455, title X, § 1053(d)(1), OcL 4, 1976, 90 Star 1649, which struck out par. (1) and redesignated as pars. (1) and (2) former pars. (2) and (3), applicable with respect to taxable years beginning after Dec. 31, 1977. REFERENCES IN TEXT The China Trade Act, 1922, referred to in subsec. (b)(1), Is act Sept. 19, 1922, ch. 346, 42 Stat. 849, as amended, which is classified generally to chapter 4 (§ 141 et seq.) of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see Tables volume. AMENDMENTS 1976-Subsec. (a). Pub. L. 94-45f, ; 1901(a)(20), sub- stituted "Gross income" for "Effective with respect to any taxable year ending after July 31, 1954, gross income" following "Exclusion from gross income.-". Subsec. (b). Pub. L. 94-455, § 1053(d)(1), struck out par. (1), relating to a corporation organized under the China Trade Act, 1922, and redesignated pars. (2) and (3) as (1) and (2), respectively. Subsec. (b)(2). Pub. L. 94-455, § 1051(h)(2), added "a corporation exempt from tax under section 501 (relat- ing to certain charitable, etc., organizations) or section 521 (relating to farmers' cooperative associations); or" following "the corporation is". 1966-Subsec. (d). Pub. L. 89-809 limited the avail- ability of the exclusion to dividends which are effec- tively connected with the conduct of a trade or busi- ness in the United States and extended the allowance of the exclusion to an expatriate subject to tax under section 877(b). 1964-Subsec. (a). Pub. L. 88-272, § 201(c), substitut- ed "$100" for "$50" wherever appearing. Subsec. (c)(3). Pub. L. 88-272, § 201(d)(6)(C), added par. (3). 1960-Subsec. (b). Pub. L. 86-779 added par. (3). 1959-Subsec. (b). Pub. L. 86-69 redesignated par'c. (2) and (3) as (1) and (2) and eliminated former par. (1) which related to dividends from insurance compa- nies subject to a tax imposed by part I or II of sub- chapter L. EFFECTIVE DATE OF 1976 AMENDMENT Amendment of subsec. (a) by section 1901(a)(20) of Pub. L. 94-455 applicable with respect to taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94-455, set out as an Effective Date of 1976 Amendment note under section 2 of this title. Amendment of subsec. (b) by section 1051(h)(2) of Pub. L. 94-455 applicable to taxable years beginning after Dec. 31, 1975, see section 1051(0) of Pub. L. 94- 455, set out as an Effective Date of 1976 Amendment note under section 33 of this title. Amendment of subsec. (b) by section 1053(d)(1) of Pub. L. 94-455 (striking out par. (1) provision for ex- clusion of dividend from corporation organized under the China Trade Act, 1922, and redesignating as pars. (1) and (2) prior pars. (2) and (3)) applicable with re- spect to taxable years beginning after Dec. 31, 1977, see section 1053(e) of Pub. L. 94-455, set out as an Ef- fective Date of 1976 Amendment note under section 941 of this title. EFFECTIVE DATE OF 1966 AMENDMENT Amendment by Pub. L. 89-809 applicable with re- spect to taxable years beginning after Dec. 31, 1966, see section 103(n)(1) of Pub. L. 89-809, set out as an Effective Date of 1966 Amendment note under section 871 of this title. EFFECTIVE DATE OF 1964 AMENDMENT Section 201(e) of Pub. L. 88-272 provided that: "The amendments made by subsection (a) [to section 34 of this title] shall apply with respect to taxable years ending after December 31, 1963. The amendment made by subsection (b [repealing section 34 of this title] shall apply with respect to taxable years ending after December 31. 1964. The amendment made by subsection (c) [to subsec. (c) of this section] shall apply with respect to taxable years beginning after December 31, 1963. The amendments made by subsec- tion (d) [to the analysis preceding section 31, and sec- tions 35, 37, 46, 116(c)(3), 584, 642. 702, 854, 857, 871, 1375 and 6014 of this title] shall apply with respect to dividends received after December 31, 1964, in taxable years ending after such date". EFFECTIVE DATE OF 1960 AMNDMENT Amendment by Pub. L. 86-779 applicable to taxable years of real estate investment trusts beginning after Dec. 31, 1960, see section 10(k) of Pub. L. 86-779, set out as an Effective Date note under section 856 of this title. EFFECTIVE DATE OF 1959 AMENDMENT Section 3(a)(3) of Pub. L. 86-69 provided that: "The amendments made by this subsection [to section 34 of this title and subsec. (b) of this section] shall apply to dividends received after December 31, 1958, in taxable years ending after such date." CRoss REFERENCES Common trust funds, see section 584 of this title. Corporate distributions of property, see section 301 of this title. Dividends not treated as such for certain purposes on distributions of electing small business corpora. tions, see section 1375 of this title. Estates, trusts, and beneficiaries, see sections 642, 643 of this title. Income and credits of partner, see section 702 of this title. § 116 Page 124