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TITLE 26-INTERNAL REVENUE CODE as an Effective Date of 1962 Amendment note under section 902 of this title. Amendment by Pub. L. 87-403 applicable only with respect to distributions made after Feb. 2, 1962, see section 3(g) of Pub. L. 87-403, set out as an Effective Date of 1962 Amendment note under section 312 of this title. E _ nrxvz DATE or 1958 AMmmrawrr Amendment of subsecs. (b)(2) and (b)(6)(B) of this section by Pub. L. 85-866 applicable to taxable years beginning after Dec. 31, 1953, and ending after Aug. 16, 1954, see section 1(c) of Pub. L. 85-866, set out as an Effective Date of 1958 Amendment note under sec- tion 165 of this title. Section 205(b) of Pub. L. 85-866 provided that: "The amendments made by subsection (a) [to subsec. (c)(2), (3) of this section and section 1551 of this title] shall apply with respect to taxable years beginning after December 31, 1957." CROSS REnamczs Provisions respecting disposal of coal with retained economic interest as inapplicable in determining amount of deduction under subsection (b)(6) of this section, see section 631 of this title. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 243, 531, 631, 1551, 1561, 1564 of this title. § 536. Income not placed on annual basis Section 443(b) (relating to computation of tax on change of annual accounting period) shall not apply in the computation of the accumulat- ed earnings tax imposed by section 531. (Aug. 16, 1954, ch. 736, 68A Stat. 182.) CRoss REFERENCES Personal holding company tax computation as not subject to section 443(b), see section 546 of this title. Regulated investment company taxable income com- putation as not subject to section 443(b), see section 852 of this title. Undistributed foreign personal holding company income computation as not subject to section 443(b), see section 557 of this title. SECTION REFERM TO IN OTHER SECTIONS This section is referred to in sections 443, 512 of this title. § 537, Reasonable needs of the business (a) General rule For purposes of this part, the term "reason- able needs of the business" Includes- (1) the reasonably anticipated needs of the business, (2) the section 303 redemption needs of the business, and (3) the excess business holdings redemption needs of the business. (b) Special rules For purposes of subsection (a)- (1) Section 303 redemption needs The term "section 303 redemption needs" means, with respect to the taxable year of the corporation in which a shareholder of the corporation died or any taxable year there- after, the amount needed (or reasonably an- ticipated to be needed) to make a redemption of stock included in the gross estate of the de- cedent (but not in excess of the maximum amount of stock to which section 303(a) may apply). (2) Excess business holdings redemption needs The term "excess business holdings redemp- tion needs" means the amount needed (or reasonably anticipated to be needed) to redeem from a private foundation stock which- (A) such foundation held on May 26, 1969 (or which was received by such foundation pursuant to a will or irrevocable trust to which section 4943(c)(5) applies), and (B) constituted excess business holdings on May 26, 1969, or would have constituted excess business holdings as of such date if there were taken into account (i) stock re- ceived pursuant to a will or trust described in subparagraph (A), and (ii) the reduction in the total outstanding stock of the corpo- ration which would have resulted solely from the redemption of stock held by the private foundation. (3) Obligations incurred to make redemptions In applying paragraphs (1) and (2), the dis- charge of any obligation incurred to make a redemption described in such paragraphs shall be treated as the making of such re- demption. (4) No inference as to prior taxable years The application of this part to any taxable year before the first taxable year specified In paragraph (1) shall be made without regard to the fact that distributions in redemption coming within the terms of such paragraphs were subsequently made. (Aug. 16, 1954, ch. 736, 68A Stat. 182; Dec. 30, 1969, Pub. L. 91-172, title IX, § 906(a), 83 Stat. 714; Oct. 4, 1976, Pub. L. 94-455, title XIX, § 1901(a)(75), 90 Stat. 1777.) AMEmMEzrs 1976-Subsec. (b)(2). Pub. L. 94-455, § 1901(a)(75)(A), struck out "with respect to taxable years of the corpo- ration ending after May 26, 1969" following 'redemp- tion needs' means". Subsec. (b)(4). Pub. L. 94-455, § 1901(a)(75)(B), struck out "or (2)" following "paragraph (1)". 1969-Pub. L. 91-172 designated existing provisions as subsec. (a)(1), and added subsecs. (a)(2), (3) and (b). EFFECTIvE DATE OF 1976 AMENDMENT Amendment of subsecs. (b)(2), (b)(4) by section 1901(a)(75)(A), (B) 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 Ef- fective Date of 1976 Amendment note under section 2 of this title. EFFECTIVE DATE OF 1969 AMENDMENT Section 906(b) of Pub. L. 91-172 provided that: "The amendment made by subsection (a) [adding subsecs. (a)(2), (3) and (b of this section] shall apply to the tax imposed under section 531 of the Internal Rev- enue Code of 1954 [section 531 of this title] with re- spect to taxable years ending after May 26, 1969." CRoss REFERENCES Unreasonable accumulation determinative of pur- pose to avoid income tax, see section 533 of this title. SECTION R ERUM TO IN OTHER SECTIONS This section is referred to in section 311 of this title. Page 407 § 537