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TITLE 26-INTERNAL REVENUE CODE of their rights by shareholders) to such prefer- ence. (d) Distributions by a member of an affiliated group In the case where a corporation which is a member of an affiliated group of corporations filing or rf.quired to file a consolidated return for a taxp ole year is required to file a separate personal holding company schedule for such taxable year, a distribution by such corporation to another member of the affiliated group shall be considered as a dividend for purposes of computing the dividends paid deduction if such distribution would constitute a dividend under the other provisions of this section to a recipi- ent which is not a member of an affiliated group. (Aug. 16, 1954, ch. 736, 68A Stat. 198; Feb. 26, 1964, Pub. L. 88-272, title II, § 225(f)(3), 78 Stat. 88.) AMENDMENTS 1964-Subsec. (b). Pub. L. 88-272 designated existing provisions as subpars. (A) and (B) of par. (1), excepted personal holding companies in section 542, and foreign personal holding companies in section 552 therefrom, and added par. (2). EFFEcTIvE DATE OF 1964 AMENDMENT Amendment Pub. L. 88-272 applicable to distribu- tions made in any taxable year of the distributing cor- poration beginning after Dec. 31, 1963, see section 225() of Pub. L. 88-272, set out as an Effective Date of 1964 Amendment note under section 316 of this title. CROSS REFERENCES Limitations on consent dividends, see section 565 of this title. Liquidations before Jan. 1, 1966, see section 225(h) of Pub. L. 88-272, set out as a note under section 333 of this title. Partial liquidation defined, see section 346 of this title. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 316, 346, 543, 561, 563, 565, 852 of this title. § 563. Rules relating to dividends paid after close of taxable year (a) Accumulated earnings tax In the determination of the dividends paid deduction for purposes of the accumulated earnings tax imposed by section 531, a dividend paid after the close of any taxable year and on or before the 15th day of the third month fol- lowing the close of such taxable year shall be considered as paid during such taxable year. (b) Personal holding company tax In the determination of the dividends paid deduction for purposes of the personal holding company tax imposed by section 541, a dividend paid after the close of any taxable year and on or before the 15th day of the third month fol- lowing the close of such taxable year shall, to the extent the taxpayer elects in its return for the taxable year, be considered as paid during such taxable year. The amount allowed as a dividend by reason of the application of this subsection with respect to any taxable year shall not exceed either- (1) The undistributed personal holding com- pany income of the corporation for the tax- able year, computed without regard to this subsection, or (2) 20 percent of the sum of the dividends paid during the taxable year, computed with- out regard to this subsection. (c) Dividends considered as paid on last day of tax- able year For the purpose of applying section 562(a), with respect to distributions under subsection (a) or (b) of this section, a distribution made after the close of a taxable year and on or before the 15th day of the third month follow- ing the close of the taxable year shall be con- sidered as made on the last day of such taxable year. (Aug. 16, 1954, ch. 736, 68A Stat. 199; Dec. 30, 1969, Pub. L. 91-172, title IX, § 914(a), 83 Stat. 823.) AMENDMENTS 1969-Subsec. (b)(2). Pub. L. 91-172 substituted "20 percent" for "10 percent". EFcTivE DATE OF 1969 AMENDMENT Section 914(b) of Pub. L. 91-172 provided that: "The amendment made by subsection (a) (amending this section] shall apply to taxable years beginning after December 31, 1969." CROSS REFERENCES Accumulated earnings credit reduced under certain circumstances by dividends paid after close of taxable year but considered as paid during taxable year, see section 535 of this title. Deficiency dividend deduction of personal holding companies, see section 547 of this title. Personal hold- ing company dividend defined, see section 316 of this title. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 316, 535, 543, 547, 561 of this title. § 564. Dividend carryover (a) General rule For purposes of computing the dividends paid deduction under section 561, in the case of a personal holding company the dividend car- ryover for any taxable year shall be the divi- dend carryover to such taxable year, computed as provided in subsection (b), from the two pre- ceding taxable years. (b) Computation of dividend carryover The dividend carryover to the taxable year shall be determined as follows: (1) For each of the 2 preceding taxable years there shall be determined the taxable income computed with the adjustments pro- vided in section 545 (whether or not the tax- payer was a personal holding company for either of such preceding taxable years), and there shall also be determined for each such year the deduction for dividends paid during such year as provided in section 561 (but de- termined without regard to the dividend car- ryover to such year). (2) There shall be determined for each such taxable year whether there is an excess of such taxable income over such deduction for dividends paid or an excess of such deduction for dividends paid over such taxable income, and the amount of each such excess. § 5,63 Page 428