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TITLE 26-INTERNAL REVENUE CODE and as so redesignated, struck out "or his delegate" following "Secretary". Former subsec. (h), which relat- ed to the earnings and profits of personal service cor- porations, was struck out. Subsec. (i). Pub. L. 94-455. § 1901(a)(43)(B), (C), re- designated former subsec. (j) as i), and as so redesig- nated, among other changes, substituted "paragraph (2)" for "subparagraph (B) of the preceding sentence" and "of this subsection" for "of this paragraph" and struck out provisions relating to the effective date of this subsec. Former subsec. (l) redesignated (j). Subsec. (j). Pub. L. 94-455. §§ 1901(a)(43)(D), (b)(32)(B)(i), 1906(b)(13)(A), redesignated former subsec. (1) as (j), and as so redesignated, struck out in par. (1) "or his delegate" following "Secretary" and in par. (3) provision relating to the effective date of such paragraph. Former subsec. C) redesignated i). Subsec. (k). Pub. L. 94-455, §§ 1901(b)(32)(B)(), 1906(b)(13)(A), redesignated former subsec. (m) as (k) and, as so redesignated, struck out in par. (2) "or his delegate" following "Secretary". Former subsec. (k), relating to the special adjustment on disposition of antitrust stock received as a dividend, was struck out. Subsec. (l). Pub. L. 94-455, § 1901(b)(32)(B)(i) rede- signated subsec. (1) as (j). Subsec. (m). Pub. L. 94-455, § 1901(b)(32)(B)(i), rede- signated subsec. (m) as (k). 1969-Subsec. (c)(3). Pub. L. 91-172, §§211(b)(3), 905(b)(2), substituted "1250(a), 1251(c), or 1252(a)", for "or 1250(a)" and inserted reference to section 311(d). Subsec. (m). Pub. L. 91-172, §442(a), added subsec. (m). 196-Subsec. (c)(3). Pub. L. 89-570 included refer- ence to section 617(d)(1). 1964-Subsec. (c)(3). Pub. L. 88-484 authorized ad- justment for the amount of the gain recognized under section 341(f). Pub. L. 88-272 inserted the reference to section 1250(a). 1962-Subsec. (c)(3). Pub. L. 87-834, § 13(f)(3), in- cluded any gain recognized under section 1245(a). Subsec. (k). Pub. L. 87-403 added subsec. Ck). Subsec. (1). Pub. L. 87-834, § 14(b)(1), added subsec. (1). EnFEcTxv DATE OF 1976 Ammmrr Amendment of subsec. (c)(3) by section 205(c)(1)(D) of Pub. L. 94-455 effective for taxable years ending n Iter Dec. 31, 1975, see section 205(e) of Pub. L. 94-455, sct out as an Effective Date of 1976 Amendment note under section 1254 of this title. Amendment of subsecs. (d)(1), (h), Ci), (J) by section 1901(a)(43) of Pub. L. 94-455 effective for 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 subsecs. (M, (k), (l), (m) by section 1901(b)(32) of Pub. L. 94-455 effective for 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. EFFECTIVE DATE OF 1969 AimEmuNr Amendment of subsec. (c)(3) by section 211(b)(3) of Pub. L. 91-172 applicable to taxable years beginning after December 31, 1969, see section 211(c) of Pub. L. 91-172, set out as an Effective Date note under section 1251 of this title. Amendment of subsec. (c)(3) by section 905(b)(2) Pub. L. 91-172 effective with respect to distributions made after Nov. 30, 1969, see section 905(c) of Pub. L. 91-172, set out as an Effective Date of 1969 Amend- ment note under section 311 of this title. EFFECTIVE DATE OF 1966 AMENDMENT Amendment by Pub. L. 89-570 applicable to taxable years ending after Sept. 12, 1966, but only in respect of expenditures paid or incurred after such date, see section 3 of Pub. L. 89-570, set out as an Effective Date note undtr section 617 of this title. EFFECTIvE DATE OF 1964 AMENDMENT Amendment by Pub. L. 88-484 applicable with re- spect to transactions after Aug. 22, 1964 in taxable years ending after such date, see section 2 of Pub. L. 88-484, set out as an Effective Date of 1964 Amend- ment note under section 341 of this title. Amendment of section by Pub. L. 88-272 applicable to dispositions after Dec. 31, 1963, in taxable years ending after such date, see section 231(c) of Pub. L. 88-272, set out as an Effective Date note under section 1250 of this title. EFFECTIvE DATE OF 1962 AMENDMENT Amendment of subsec. (c)(3) of this section by Pub. L. 87-834 applicable to taxable years beginning after Dec. 31, 1962, see section 13(g) of Pub. L. 87-834, set out as an Effective Date note under section 1245 of this title, Section 3(g) of Pub. L. 87-403 provided that: "The amendments made by this section [to sections 312, 535, 543, 545, 556 and 561 of this title] shall apply only with respect to distributions made after the date of the einactment of this Act [Feb. 2, 1962]." Subsec. (l) of this section applicable with respect to taxable years beginning after Dec. 31, 1962, see section 14(c) of Pub. L. 87-834, set out as an Effective Date note under section 1246 of this title. SECTION REmuERI TO IN OTERM SECTIONS This section is referred to in sections 338, 964, 1248, 1377 of this title. SUBPART C-DEFINITIONS; CONSTRUCTIVE OWNERSHIP OF STOCK Sec. 316. Dividend defined. 317. Other definitions. 318. Constructive ownership of stock. § 316. Dividend defined (a) General rule For purposes of this subtitle, the term "divi- dend" means any distribution of property made by a corporation to its shareholders- (1) out of its earnings and profits accumu- lated after February 28, 1913, or (2) out of its earnings and profits of the tax- able year (computed as of the close of the taxable year without diminution by reason of any distributions made during the taxable year), without regard to the amount of the earnings and profits at the time the distribu- tion was made. Except as otherwise provided in this subtitle, every distribution is made out of earnings and profits to the extent thereof, and from the most recently accumulated earnings and prof- its. To the extent that any distribution is, under any provision of this subchapter, treated as a distribution of property to which section 301 applies, such distribution shall be treated as a distribution of property for purposes of this subsection. (b) Special rules (1) Certain insurance company dividends The definition in subsection (a) shall not apply to the term "dividend" as used in sub- chapter L in any case where the reference is to dividends of insurance companies paid to policyholders as such. (2) Distributions by personal holding companies (A) In the case of a corporation which- § 316 Page 244