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TITLE 26-INTERNAL REVENUE CODE gross income under section 959(a) shall be re- duced by the amount so excluded. In the case of a United States shareholder who has made an election under section 962 for any prior taxable year, the reduction in basis provided by this paragraph shall not exceed an amount equal to the amount received which is ex- cluded from gross income under section 959(a) after the application of section 962(d). (2) Amount in excess of basis To the extent that an amount excluded from gross income under section 959(a) ex- ceeds the adjusted basis of the stock or other property with respect to which It is received, the amount shall be treated as gain from the sale or exchange of property. (Added Pub. L. 87-834, § 12(a), Oct. 16, 1962, 76 Stat. 1022, and amended Pub. L. 94-455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.) AMENDMENTS 1976-Subsecs. (a), (b)(1). Pub. L. 94-455 struck out "or his delegate" following "Secretary". SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in section 1016 of this title. § 962. Election by individuals to be subject to tax at corporate rates (a) General rule Under regulations prescribed by the Secre- tary, in the case of a United States shareholder who is an individual and who elects to have the provisions of this section apply for the taxable year- (1) the tax imposed under this chapter on amounts which are included in his gross income under section 951(a) shall (in lieu of the tax determined under section 1) be an amount equal to the tax which would be im- posed under section 11 if such amounts were received by a domestic corporation, and (2) for purposes of applying the provisions of section 960 (relating to foreign tax credit) such amounts shall be treated as if they were received by a domestic corporation. (b) Election An election to have the provisions of this sec- tion apply for any taxable year shall be made by a United States shareholder at such time and in such manner as the Secretary shall pre- scribe by regulations. An election made for any taxable year may not be revoked except with the consent of the Secretary. (c) Surtax exemption For purposes of applying subsection (a)(1), the surtax exemption provided by section 11(c) shall not exceed, in the case of any United States shareholder, an amount which bears the same ratio to the surtax exemption as the amounts included in his gross income under section 951(a) for the taxable year bears to his pro rata share of the earnings and profits for the taxable year of all controlled foreign corpo- rations with respect to which such United States shareholder includes any amount in gross income under section 951(a). (d) Special rule for actual distributions The earnings and profits of a foreign corpora- tion attributable to amounts which were includ- ed in the gross income of a United States share- holder under section 951(a) and with respect to which an election under this sectioi applied shall, when such earnings and profits are dis- tributed, notwithstanding the provisions of sec- tion 959(a)(1), be included in gross income to the extent that such earnings and profits so distributed exceed the amount of tax paid under this chapter on the amounts to which such election applied. (Added Pub. L. 87-834, § 12(a), Oct. 16, 1962, 76 Stat. 1023, and amended Pub. L. 94-12, title III, § 303(c)(3), Mar. 29, 1975, 89 Stat. 45; Pub. L. 94-164, §4(d)(1), Dec. 23, 1975, 89 Stat. 975; Pub. L. 94-455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.) AMENDMENTS 176-Subsecs. (a), (b). Pub, L. 94-455 struck out "or his delegate" following "Secretary" wherever appear- ing. 1975-Subsec. (c). Pub. L. 94-164 substituted "same ratio to the surtax exemption" for "same ratio to $25,000" in subsec. c) as such subsec. (c) is in effect for taxable years ending after Dec. 31, 1975. Pub. L. 94-12 substituted "$50,000" for "$25,000". EFFECTIVE AND TERMINATION DATES OF 1975 AMENDMENTS Amendment by Pub. L. 94-164 applicable to taxable years beginning after Dec. 31, 1975, see section 4(e) of Pub. L. 94-164, set out as an Effective and Termina- tion Dates of 1975 Amendments note under section 11 of this title. Amendment by Pub. L. 94-12 applicable to taxable years ending after Dec. 31, 1974, but to cease to apply for taxable years ending after Dec. 31, 1975, see sec- tion 305(b)(1) of Pub. L. 94-12, set out as an Effective and Termination Dates of 1975 Amendments note under section 11 of this title. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in section 961 of this title. [§ 963. Repealed. Pub. L. 94-12, title VI, § 602(a)(1), Mar. 29, 1975, 89 Stat. 581 Section, added Pub. L. 87-834, § 12(a), Oct. 16, 1962, 76 Stat. 1023, and amended Pub. L. 88-272, title I, § 123(b), Feb. 26, 1964, 78 Stat. 29; Pub. L. 90-364, title I, § 102(b), June 28, 1968. 82 Stat. 255; Pub. L. 91-53, § 5(b), Aug. 7, 1969. 83 Stat. 95; Pub. L. 91-172, title VII, § 701(b), Dec. 30, 1969, 83 Stat. 659, dealt with the receipt of minimum distributions by domestic corpora. tions. EFFECTIVE DATE OF REPEAL Repeal effective with respect to taxable years for foreign corporations beginning after Dec. 31, 1975, and to taxable years of United States shareholders (within the meaning of section 951(b) of this title) within which or with which such taxable years of such for- eign corporations end, see section 602(f) of Pub. L. 94- 12, set out as an Effective Date note under section 955 of this title. § 964. Miscellaneous provisions (a) Earnings and profits Except as provided in section 312(k)(3), for purposes of this subpart, the earnings and prof- its of any foreign corporation, and the deficit in earnings and profits of any foreign corporation, for any taxable year shall be determined ac- § 962 Page 614