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TITLE 26-INTERNAL REVENUE CODE tion to the par value of the shares of stock of the corporation owned by each; except that if the corporation has more than one class of stock, the certificates shall contain a state- ment that the articles of incorporation pro- vide a method for the apportionment of such special dividend among such persons, and that the amount certified has been distribut- ed in accordance with the method so pro- vided. () Ownership of stock For purposes of this section, shares of stock of a corporation shall be considered to be owned by the person in whom the equitable right to the income from such shares is in good faith vested. (d) Phaseout of deduction In the case of a taxable year beginning after December 31, 1975, and before January 1, 1978, the amount of the special deduction under sub- section (a) (determined without regard to this subsection) shall be reduced by the percentage reduction specified in the following table: The percentage For a taxable year reduction beginning in- shall be- 1976 ................................................................. 333 1977 ..................................................................... 66% . (Aug. 16, 1954, ch. 736, 68A Stat. 293; Oct. 4, 1976, Pub. L. 94-455, title X, § 1053(a), title XIX, § 1906(b)(1)(A), 90 Stat. 1648, 1834.) REPEAL OF SECTION Section repealed by Pub. L. 94-455, title X, § 1053(c),.Oct 4, 1976, 90 Stat. 1648, applica- ble with respect to taxable years beginning after Dec. 31, 1977. REFERENCES IN TEXT The China Trade Act of 1922, referred to in section catchline and subsec. (a), is act Sept. 19. 1922, ch. 346, 42 Stat. 849, as amended, which is classified generally to chapter 4 (§ 141 et seq.) of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see section 141 of Title 15 and see Tables volume. AMENDMENTs 1976-Subsec. (b). Pub. L. 94-455, § 1906(b)(13)(A), struck out "or his delegate" following "Secretary". Subsec. (d). Pub. L. 94-455, § 1053(a), added subsec. (d). EmcTIvE DATE o 1976 AMENDMENT Section 1053(e) of Pub. L. 94-455 provided that: "The amendments made by subsections (a) and (b) [enacting subsec. (c) of this section and amending sec- tion 943 of this title] shall apply with respect to tax- able years beginning after December 31, 1975. The amendments made by subsections (c) and (d) (amend- ing sections 116(b), 1504(b)(5), 6072(e) and 6091(b)(2), (B) of this title, and repealing sections 941-943 of this title] shall apply with respect to taxable years begin- ning after Decmber 31, 1977.'" CROSS REFxu mNCES Partial exclusion of dividends received by individ- uals, not applicable to dividend from corporation orga- nized under China Trade Act, see section 116 of this title. Taxes of foreign countries and of possessions of United States, corporations treated as foreign, see sec- tion 901 of this title. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 116, 992, 6091 of this title. § 942. Disallowance of foreign tax credit A corporation organized under the China Trade Act, 1922, shall not be allowed the credits against the tax for taxes of foreign countries and possessions of the United States allowed by section 901. (Aug. 16, 1954, ch. 736, 68A Stat. 294.) REPEAL OF SECTION Section repealed by Pub. L. 94-455, title X, § 1053(c), Oct. 4, 1976, 90 Stat. 1648, applica- ble with respect to taxable years beginning after Dec, 31, 1977. REFERENCES IN TEXT The China Trade Act, 1922, referred to in text, is act Sept. 19, 1922, ch. 346, 42 Stat. 849, as amended, which is classified generally to chapter 4 (§ 141 et seq.) of Title 15, Commerce and Trade. For complete classifi- cation of this Act to the Code, see section 141 of Title 15 and Tables volume. § 943. Exclusion of dividends to residents of Formosa or Hong Kong Amounts distributed as dividends to or for the benefit of any person by a corporation or- ganized under the China Trade Act, 1922, shall not be included in gross income and shall be exempt from taxation under this subtitle if, at the time of such distribution, such person is a resident of Formosa or Hong Kong, and the equitable right to the income of the shares of stock of the corporation is in good faith vested in him. In the case of a taxable year beginning after December 31, 1975, and before January 1, 1978, the amount of the distributions which are excludable from gross income under this sec- tion (determined without regard to this sen- tence) shall be reduced by the percentage re- duction specified in the following table: The percentage For a taxable year reduction beginning in- shall be- 1976 .......................................... 33V3 1977 .................................. 66%. (Aug. 16, 1954, ch. 736, 68A Stat. 294; Oct. 4, 1976, Pub. L. 94-455, title X, § 1053(b), 90 Stat. 1648.) REPEAL OF SECTION Section repealed by Pub. L. 94-455, title X, § 1053(c), Oct. 4, 1976, 90 Stat. 1648, applica- ble with respect to taxable years beginning after Dec. 31, 1977. REFERENCES IN TEXT The China Trade Act, 1922, referred to in text, is act Sept. 19, 1922, ch. 346, 42 Stat. 849, as amended, which is classified generally to chapter 4 (§ 141 et seq.) of Title 15, Commerce and Trade. For complete classifi. cation of this Act to the Code, see section 141 of Title 15 and Tables volume. § 942 Page 600