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TITLE 26-INTERNAL REVENUE CODE § 558. Returns of officers, directors, and shareholders of foreign personal holding companies For provisions relating to returns of officers, directors, and shareholders of foreign personal holding companies, see section 6035. (Added Pub. L. 85-866, title I, § 33(d)(1), Sept. 2, 1958, 72 Stat. 1632.) EFFEcrIvE DATE Section applicable to taxable years beginning after Dec. 31, 1953, and ending after Aug. 16, 1954, see sec- tion 1(c) of Pub. L. 85-866, set out as an Effective Date of 1958 Amendment note under section 165 of this title. PART IV-DEDUCTION FOR DIVIDENDS PAID See. 561. Definition of deduction for dividends paid. 562. Rules applicable in determining dividends eligible for dividends paid deduction. 563. Rules relating to dividends paid after close of taxable year. 564. Dividend carryover. 565. Consent dividends. § 561. Definition of deduction for dividends paid (a) General rule The deduction for dividends paid shall be the sum of- (1) the dividends paid during the taxable year, (2) the consent dividends for the taxable year (determined under section 565), and (3) in the case of a personal holding compa- ny, the dividend carryover described in sec. tion 564. (b) Special rules applicable In determining the deduction for dividends paid, the rules provided in section 562 (relating to rules applicable in determining dividends ':li- gible for dividends paid deduction) and section 563 (relating to dividends paid after the close of the taxable year) shall be applicable. (Aug. 16, 1954, ch. 736, 68A Stat. 198; Feb. 2, 1962, Pub. L. 87-403, § 3(f), 76 Stat. 8; Oct. 4, 1976, Pub. L. 94-455, title XIX, § 1901(b)(32)(H), 90 Stat. 1800.) AMENDMzNs 1976-Subsec. (b). Pub. L. 94455 redesignated exist- ing provisions of par. (1) as (b) and struck out par. (2) relating to special adjustment on disposition of anti. trust stock as a dividend. 1962-Subsec. (b). Pub. L. 87403 designated existing provisions as par. (1) and added par. (2). EmcrxvE DATE OF 1976 AmENDMENT Amendment by Pub. L. 94-455 applicable with re- spect 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 1962 AmENDmErr Amendment by Pub. L. 87-403 applicable only with respect to distributions made after Feb. 2, 1962, see section 3(g) of Pub. L. 87403, set out as an Effective Date of 1962 Amendments note under section 312 of this title. CRoss RErEENcEs Accumulated taxable income as taxable income minus, among others, dividends paid deduction, and accumulated earnings credit as related to dividends paid deduction, see section 535 of this title. Deficiency dividend deduction of personal holding companies, see section 547 of this title. Taxation of regulated investment companies and their shareholders, see section 852 of this title. Undistributed foreign personal holding company income as taxable income minus, among others, divi- dends paid deduction, see section 556 of this title. Undistributed personal holding company income as taxable income minus, among others, dividends paid deduction, see section 545 of this title. SECTION REFERRED TO IN OTiER SECTIONS This section is referred to in sections 535, 545, 547, 556, 564, 565, 852, 857, 4981 of this title. § 562. Rules applicable in determining dividends eligi- ble for dividends paid deduction (a) General rule For purposes of this part, the term "divi- dend" shall, except as otherwise provided in this section, include only dividends described in section 316 (relating to definition of dividends for purposes of corporate distributions). (b) Distributions in liquidation (1) Except in the case of a personal holding company described in section 542 or a foreign personal holding company described in sec- tion 552- (A) in the case of amounts distributed in liquidation, the part of such distribution which is properly chargeable to earnings and profits accumulated after February 28, 1913, shall be treated as a dividend for pur- poses of computing the dividends paid de- duction, and (B) in the case of a complete liquidation occurring within 24 months after the adop- tion of a plan of liquidation, any distribu- tion within such period pursuant to such plan shall, to the extent of the earnings and profits (computed without regard to capital losses) of the corporation for the taxable year in which such distribution is made, be treated as a dividend for purposes of com- puting the dividends paid deduction. (2) In the case of a complete liquidation of a personal holding company, occurring within 24 months after the adoption of a plan of liq- uidation, the amount of any distribution within such period pursuant to such plan shall be treated as a dividend for purposes of computing the dividends paid deduction, to the extent that such amount is distributed to corporate distributees and represents such corporate distributees' allocable share of the undistributed personal holding company income for the taxable year of such distribu- tion computed without regard to this para- graph and without regard to subparagraph (B) of section 316(b)(2). (c) Preferential dividends The amount of any distribution shall not be considered as a dividend for purposes of com- puting the dividends paid deduction, unless such distribution is pro rata, with no preference to any share of stock as coml Ared with other shares of the same class, and with no prefer- ence to one class of stock as compared with an- other class except to the extent that the former is entitled (without reference to waivers Page 427 § 562