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TITLE 26-INTERNAL REVENUE CODE § 219, Dec. 10, 1971, Pub. L. 92-178, title VII, § 702(a), 85 Stat. 561, renumbered § 220, Sept. 2, 1974, Pub. L. 93-405, title II, § 2002(a)(1), 88 Stat. 958, renumbered § 221, Oct. 4, 1976, Pub. L. 94-455, title XV, § 1501(a), 90 Stat. 1734, relating to cross references concerning deduction for long term capital gains and deductions in respect of a decedent, was redesignated as section 221 of this title by section 1501(a) of Pub. L. 94-455. EFFECTIVE DATE Section 1501(d) of Pub. L. 94-455 provided that: "The amendments made by this section [enacting this section, amending sections 62(10), 219(a), (b)(6), (c)(2), (3), 408(c)(2), (d)(4), 409(a)(4), 3401(a)(12), 4973(a), (b)(1)(B), (2) and 6047(d) of this title, and renumber- Ing section 220 as 221 of this title], other than the amendment made by subsection (b)(3), shall apply to taxable years beginning after Deceml-er 31, 1976. The amendment made by subsection (b)(3) [amending sec- tion 415(a)(2), (3) of this title] shall apply to years be- ginning after December 31, 1976." SECTION REFERRED TO IN OTHER SECTIONS Th s section is referred to in sections 62, 219, 408, 3401, 4973 of this title. § 221. Cross references (1) For deduction for long-term capital gains in the case of a taxpayer other than a corporation, see section 1202. (2) For deductions In respect of a decedent, see section 691. (Aug. 16, 1954, ch. 736, 68A Stat. 72, § 217, re- numbered § 218, Feb. 26, 1964, Pub. L. 88-272, title II, § 213(a)(1), 78 Stat. 50, renumbered § 219, Dec. 10, 1971, Pub. L. 92-178, title VII, § 702(a), 85 Stat. 561, renumbered § 220, Sept. 2, 1974, Pub. L. 93-406, title II, § 2002(a)(1), 88 Stat. 958, renumbered § 221, Oct. 4, 1976, Pub. L. 94-455, title XV, § 1501(a), 90 Stat. 1734.) PART VIII-SPECIAL DEDUCTIONS FOR CORPORATIONS Sec. 241. Allowance of special deductions. [242. Repealed.] 243. Dividends received by corporations. 244. Dividends received on certain preferred stock. 245. Dividends received from certain foreign corpora. tions. 246. Rules applying to deductions for dividends re- ceived. 247. Dividends paid on certain preferred stock of public utilities. 248. Organizational expenditures. 249. Limitation on deduction of bond premium on re- purchase. 250. Certain payments to the National RAilroad Pas- senger Corporations. AMENDMENTS 1976-Pub. L. 94-455, title XIX, § 1901(b)(1)(AA). Oct. 4, 1976, 90 Stat. 1792, struck out item 242 "Par- tially tax-exempt interest". 1970-Pub. L. 91-518, title IX, § 901(b), Oct. 30, 1970, 84 Stat. 1342, added item 250. 1969-Pub. L. 91-172, title IV, § 414(b), Dec. 30, 1969, 83 Stat. 613, added item 249. PART REFERRED TO IN OTHER SECTIONS This part is referred to in sections 527, 528, 535, 545, 556, 593, 822, 832, 857, 1373, 1374 of this title. § 241. Allowance of special deductions In addition to the deductions provided in part VI (sec. 161 and following), there shall be al- lowed as deductions in computing taxable income the items specified in this part. (Aug. 16, 1954, ch. 736, 68A Stat. 72.) SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in section 535 of this title. [§ 242. Repealed. Pub. L. 94-455, title XIX, § 1901(a)(33), Oct. 4, 1976, 90 Stat. 1769] Section, acts Aug. 16, 1954, ch. 736, 68A Stat. 72; Feb. 26, 1964, Pub. L. 88-272, title I, § 123(c), 78 Stat. 30, al- lowed to corporations as a deduction the amount're. ceived as interest on obligations of the United States or on obligations of corporations organized under Acts of Congress which are instrumentalities of the United States under certaiR conditions. EFFECTIVE DATE OF REPEAL Repeal of this section effective for taxable years be- ginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94-455, set out as an Effective Date of 1976 Amend- ment note under section 2 of this title. § 243. Dividends received by corporations (a) General rule In the case of a corporation, there shall be al- lowed as a deduction an amount equal to the following percentages of the amount received as dividends from a domestic corporation which is subject to taxation under this chapter: (1) 85 percent, in the case of dividends other than dividends described in paragraph (2) or (3); (2) 100 percent, in the case of dividends re- ceived by a small business investment compa- ny operating under the Small Business In- vestment Act of 1958 (15 U.S.C. 661 and fol- lowing); and (3) 100 percent, in the case of qualifying dividends (as defined in subsection (b)(1)). (b) Qualifying dividends (1) Definition For purposes of subsection (a)(3), the term "qualifying dividends" means dividends re- ceived by a corporation which, at the close of the day the dividends are rece jed, is a member of the same affiliated group of corpo- rations (as defined in paragraph (5)) as the corporation distributing the dividends, if- (A) such affiliated group has made an election under paragraph (2) which is effec- tive for the taxable years of its members which include such day, and either (B) such dividends are distributed out of earnings and profits of a taxable year of the distributing corporation ending after De- cember 31, 1963- (i) on each day of which the distributing corporation and the corporation receiving the dividends were members of such affili- ated group, and (ii) for which an election under section 1562 (relating to election of multiple surtax exemptions) is not effective, or (C) such dividends are paid by a corpora- tion with respect to which an election under section 936 is in effect for the taxable year in which such dividends are paid. (2) Election An election under this paragraph shall be made for an affiliated group by the common Page 202