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TITLE 26-INTERNAL REVENUE CODE (2) distributes the amount of such dividend to shareholders in the 12-month period fol- lowing the close of such taxable year and not later than the date of the first regular divi- dend payment made after such declaration, the amount so declared and distributed shall, to the extent the company elects in such return in accordance with regulations prescribed by the Secretary, be considered as having been paid during such taxable year, except as provided in subsections (b), (c) and (d). (b) Receipt by shareholder Amounts to which subsection (a) is applicable shall be treated as received by the shareholder in the taxable year in which the distribution is made. (c) Notice to shareholders In the case of amounts to which subsection (a) is applicable, any notice to shareholders re- quired under this part with respect to such amounts shall be made not later than 45 days after the close of the taxable year in which the distribution is made. (d) Foreign tax election If an investment company to which section 853 is applicable for the taxable year makes a distribution as provided in subsection (a) of this section, the shareholders shall consider the amounts described in section 853(b)(2) allocable to such distribution as paid or received, as the case may be, in the taxable year in which the distribution is made. (Aug. 16, 1954, ch. 736, 68A Stat. 274; Sept. 14, 1960, Pub. L. 86-779, § 10(b)(2), 74 Stat. 1009; Feb. 26, 1964, Pub. L. 88-272, title II, § 229(a)(5), 78 Stat. 99; Oct. 4, 1976, Pub. L. 94-455, title XIX, § 1906(b)(13)(A), 90 Stat. 1834.) AMENDMENTS 1976-Subsec. (a). Pub. L. 94-455 struck out "or his delegate" following "Secretary". 1964-Subsec. (c). Pub. L. 88-272 substituted "45 days" for "30 days". 1960-Subsec. (c). Pub. L. 86-779 substituted "this part" for "this subchapter". EFFECTIVE DATE OF 1964 AMENDMENT Amendment by Pub. L. 88-272 applicable to taxable years of regulated investment companies ending on or after Feb. 26, 1964, see section 229(c) of Pub. L. 88-272, set out as an Effective Date of 1964 Amendment note under section 852 of this title. EFFECTIVE DATE OF 1960 AMENDMENT Amendment by Pub. L. 86-779 applicable with re- spect to taxable years of real estate investment trusts beginning after Dec. 31, 1960, see section 10(k) of Pub. L. 86-779, set out as an Effective Date note under sec- tion 856 of this title. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sectionE 265, 852 of this title. SECTION REFERRED TO IN D.C. CODE This section is referred to In section 47-1557b of the District of Columbia Code. PART I1-REAL ESTATE INVESTMENT TRUSTS Sec. 856. Definition of real estate investment trust. 857. Taxation of real estate investment trusts and their beneficiaries. 858. Dividends paid by real estate investment trust after close of taxable year. 859. Deduction for deficiency dividends. 860. Adoption of annual accounting period. AMENDMENTS 1976-Pub. L. 94-455, title XVI, §§ 1601(a)(2), 1604()(2), Oct. 4, 1976, 90 Stat. 1745, 1752, added items 859 and 860. 1960-Pub. L. 86-779, § 10(a), Sept. 14, 1960, 74 Stat. 1003, added Part 11 analysis. PART REFERRED TO IN OTHER SECTIONS This part Is referred to in sections 58, 116, 172, 243 of this title. § 856. Definition of real estate investment trust (a) In general For purposes of this title, the term "real estate investment trust" means a corporation, trust, or association- (1) which is managed by one or more trust- ees or directors; (2) the beneficial ownership of which is evi- denced by transferable shares, or by transfer- able certificates of beneficial interest; (3) which (but for the provisions of this part) would be taxable as a domestic corpora- tion; (4) which is neither (A) a financial institu- tion to which section 585, 586, or 593 applies, nor (B) an insurance company to which sub- chapter L applies; (5) the beneficial ownership of which is held by 100 or more persons; (6) which would not be a personal holding company (as defined in section 542) if all of its adjusted ordinary gross income (as defined in section 543(b)(2)) constituted personal holding company income (as defined in sec- tion 543); and (7) which meets the requirements of subsec- tion (c). (b) Determination of status The conditions described in paragraphs (1) to (4), inclusive, of subsection (a) must be met during the entire taxable year, and the condi- tion described in paragraph (5) must exist during at least 335 days of a taxable year of 12 months, or during a proportionate part of a taxable year of less than 12 months. (c) Limitations A corporation, trust, or association shall not be considered a real estate investment trust for any taxable year unless- (1) it files with its return for the taxable year an election to be a real estate investment trust or has made such election for a previous taxable year, and such election has not been terminated or revoked under subsection (g); (2) at least 95 percent (90 percent for tax- able years beginning before January 1, 1980) of its gross income (excluding gross income from prohibited transactions) is derived from- (A) dividends; Page 543 § 856