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TITLE 26-INTERNAL REVENUE CODE (b)(1)(V), (33)(K), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1732, 1746-1748, 1750-1757, 1783, 1792, 1801, 1834.) TAXABLE YEARS AFTER 1977 Subsecs. (b)(3)(B) and (7) of this section amended by Pub. L. 94-455, title XIV, § 1402(b)(2), Oct. 4, 1976, 90 Stat. 1732, effec- tive with respect to taxable years beginning after Dec. 31, 1977, by substituting "1 year" for "9 months". AMENDMENTS 1976-Subsec. (a). Pub. L. 94-455, §§ 1604(j), (k)(2)(B), 1906(b)(13)(A), substituted "(other than sub- section (d) of this section and subsection (g) of section 856)" for "(other than subsection (d) of this section)" in the provisions preceding par. (1), in par. (1) redesig- nated existing subpars. (A) and (B) as cls. (i) and (ii), respectively, of subpar. (A), added subpar. (B), in both cls. (i) and ii) of subpar. (A) as redesignated raised the percentage to 95 percent for taxable years beginning on and after Jan. 1, 1980, and, in cl. (i) of subpar. (A) as redesignated, added provision for the exclusion of net capital gain, and struck out "or his delegate" fol- lowing "Secretary" in par. (2). Subsec. (b)(1). Pub. L. 94-455, § 1901(b)(1)(V), struck out provision that, for purposes of computing the normal tax under section 11, the taxable Income and the dividends paid deduction of such real estate invest- ment trust for the taxable year (computed without regard to capital gains dividends) would be reduced by the deduction provided by section 22 (relating to par- tially tax-exempt interest. Subsec. (b)(2). Pub. L. 94-455, §§ 1602(b)(2), 1603(c)(5), 1606(a), (d), 1607(b)(1)(A), (2), struck out subpar. (A) which provided for the exclusion of the excess, if any, of the net long-term capital gain over the net short-term capital loss, and subpar, (E) which prohibited the allowance of the net operating loss de- duction provided in section 172, redesignated subpars. (B), (C), (D), and (P) as subpars. (A), (B), (C), and (D), respectively, added slibpars. (E) and (F), and in subpar. (B) as redesignated substituted "subparagraph (D)" for "paragraph (F)" and struck out "shall be computed without regard to capital gains dividends and" following "shall be allowed, but". Subsec. (b)(3)(A). Pub. L. 94-455, § 1607(a), substitut- ed provisions setting an alternative tax in case of cap- ital gains under which, if for any taxable year, a real estate Investment trust has a net capital gain, then, In lieu of the tax Imposed by subsection (b)(1), there Is Imposed a tax (if such tax is less than the tax Imposed by such subsection) to consist of the sum of a tax, computed as provided In subsection (b)(1), on the real estate Investment trust taxable income (determined by excluding such net capital gain and by computing the deduction for dividends paid without regard to capital gain dividends), and a tax of 30 percent of the excess of the net capital gain over the deduction for divi- dends paid (as defined in section 561) determined with reference to capital gains dividends only, for provi- sions posing a tax for each taxable year determined as provided In section 1201(a), on the excess, if any, of the net long-term capital gain over the sum of the net short-term capital loss and the deduction for dividends paid (as defined in section 561) determined with refer- ence to capital gains dividends only. Subsec. (b)(3)(B). Pub. L. 94-455, § 1402(b)(1)(P), provided that "6 months" would be changed to "9 months" for taxable years beginning in 1977. Subsec. (b)(3)(C). Pub. L. 94-455, §§ 1601(c), 1607(b)(3), 1901(a)(112), (b)(33)(K), added "; except that, If there Is an increase in the excess described in subparagraph (A)(Ii) of this paragraph for such year which results from a determination (as defined in sec- tion 859(c)), such designation may be made with re- spect to such increase at any time before the expira- tion of 120 days after the date of such determination" following "30 days after the close of its taxable year", substituted "net capital gain" for "excess of the net long-term capital gain over the net short-term capital loss" in the provision covering the portion of distribu- tions which shall 1:2 capital gain dividends, added pro- vision that the net capital gain be deemed not to exceed the real estate investment trust taxable Income, and struck out provision which specified the source of deductions for dividends paid in the case of taxable years beginning before Jan. 1, 1975. Subsec. (b)(4)(B)(i). Pub. L. 94-455, §1604(c)(2), added reference to subparagraph (G) of section 856(c)(3). Subsec. (b)(5). Pub. L. 94-455, §1602(b)(1), added subsec. (b)(5). Former subsec. (b)(5) redesignated (b)(7) and amended. Subsec, (b)(6). Pub. L. 94-455, § 1603(b), added subsec. (b)(6). Subsec. (b)(7). Pub. L. 94-455, §§ 1402(b)(1)(P), 1602(b)(1), redesignated subsec. (b)(5) as (b)(7) and in subsec. (b)(7) as so redesignated provided that "6 months" would be changed to "9 months" for taxable years beginning in 1977. Subsec. (d). Pub. L. 94-455, § 1604(f)(3)(B), substitut- ed "a domestic corporation, trust," for "a domestic un- incorporated trust". Subsec. (e). Pub. L. 94-455, § 1605(b)(2), added subsec. (e). 1975-Subsec. (a)(1). Pub. L. 93-625, §6(d)(2), Incor- porated existing par. (1) provisions In par. (1) intro- ductory text and provisions designated as subpar. (A), substituted In subpar. (A) "(determined without regard to the deduction for dividends paid (as defined in section 561))" for "(determined without regard to subsection (b)(2)(C))", and added subpar. (B). Subsec. (b)(2)(C). Pub. L. 93-625, § 6(d)(4), provided for computation of deduction for dividends paid with- out regard to that portion of such deduction which is attributable to the amount excluded under subpara- graph (F). Subsec. (b)(2)(F). Pub. L. 93-625, § 6(d)(3), added subpar. (F). Subsec. (b)(4), (5). Pub. L. 93-625, § 6(c), added par. (4) and redesignated former par. (4) as (5). 1969-Subsec. (b)(3)(A). Pub. L. 91-172, §511(c)(3)(A), substituted "determined as provided In section 1201(a), on" for "of 25 percent of." Subsec. (b)(3)(C). Pub. L. 91-172, §511(c)(3)(B), added provision requiring for the purposes of the de- duction for capital gains dividends paid, in the case of a taxable year beginning before Jan. 1, 1975, the de- duction for dividends paid shall first be made from the amount subject to tax in accordance with section 1201(a)(1)(B), to the extent thereof, and then from the amount subject to tax In accordance with section 1201(a)(1)(A). 1964-Subsec. (c). Pub. L. 88-272 deleted "section 34(a) (relating to credit for dividends received by Indi- viduals)," preceding "section 116." EFFECTIVE DATE OF 1976 AMENDMENT Section 1402(b)(1) of Pub. L. 94-455 provided In part that the substitution of "9 months" for "6 months" in subsec. (b)(3)(B) and (7) of this section by section 1402(b)(1)(P) of Pub. L. 94-455 Is effective with respect to taxable years beginning in 1977. For effective date of amendment of subsec. (b)(3)(C) by section 1601(c) of Pub, L. 94-455, see section 1608(a) of Pub. L. 94-455, set out as an Effective Date of 1976 Amendment note under section 859 of this title. For effective date of amendment of subsec. (b)(2), (5), (7) by section 1602(b)(1), (2) of Pub, L. 94-455, see section 1608(b) of Pub. L. 94-455, set out as a Trust Not Disqualified in Certain Cases Where Income Tests Not Met note under section 856 of this title. For effective date of subsecs. (a), (b)(2), (4)(B)(i), (6), (d), (e) by sections 1603, 1604 and 1605 of Pub. L. 94- 455, see section 1608(d) of Pub. L. 94-455, set out as an Effective Date of 1976 Amendment note under section 856 of this title. Page 551 § 857