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TITLE 26-INTERNAL REVENUE CODE SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 48, 56, 58, 703, 1348 of this title. § 58. Rules for application of this part (a) Married individuals filing separate returns In the case of a married individual who files a separate return for the taxable year, section 56 shall be applied by substituting $5,000 for $10,000 each place it appears. (b) Members of controlled groups In the case of a controlled group of corpora- tions (as defined in section 1563(a)), the $10,000 amount specified in section 56 shall be divided equally among the component members of such group unless all component members consent (at such time and in such manner as the Secre- tary prescribes by regulations) to an apportion- ment plan providing for an unequal allocation of such amount. () Estates and trusts In the case of an estate or trust- (1) the sum of the items of tax preference for any taxable year of the estate or trust shall be apportioned between the estate or trust and the beneficiaries on the basis of the income of the estate or trust allcable to each, and (2) the $10,000 amount specified in section 56 applicable to such estate or trust shall be reduced to an amount which bears the same ratio to $10,000 as the portion of the sum of the items of tax preference allocated to the estate or trust under paragraph (1) bears to such sum, (d) Electing small business corporations and their shareholders (1) In general Except as provided in paragraph (2), the items of tax preference of an electing small business corporation (as defined in section 1371(b)) for each taxable year of the corpora- tion shall be treated as items of tax prefer- ence of the shareholders of such corporation, and, except as provided in paragraph (2), shall not be treated as iten's of tax preference of such corporation, The sum of the items so treated shall be apportioned pro rata among such shareholders in a manner consistent with section 1374(c)(1). For purposes of this paragraph, this part shall be treated as apply- ing to such corporation. (2) Certain capital gains If for a taxable year of an electing small business corporation a tax is imposed on the income of such corporation under section 1378, such corporation shall be subject to the tax imposed by section 56, but computed only with reference to the item of tax preference set forth in section 57(a)(9)(B) to the extent attributable to gains subject to the tax im- posed by section 1378. (e) Participants in a common trust fund The items of tax preference of a common trust fund (as defined in section 584(a)) for each taxable year of the fund shall be treated as items of tax preference of the participants of such fund and shall be apportioned pro rata among such participants. For purposes of this subsection, this part shall be treated as apply- ing to such fund. (f) Regulated investment coimpanies, etc. In the case of a regulated investment compa- ny to which part I of subehapter M applies or a real estate investment trust to which part II of subpart M applies- (1) the item of tax preference set forth in section 57(a)(9) shall not be treated as an item of tax preference of such company or such trust for each taxable year to the extent that such item is attributable to amounts taken into account as income by the share- holders of such company under section 852(b)(3), or by the shareholders or holders of beneficial interests of such trust under sec- tion 857(b)(3), and (2) the items of tax preference of such com- pany or such trust for each taxable year (other than the item of tax preference set forth in section 57(a)(9) and, in the case of a real estate investment trust, the item of tax preference set forth in section 57(a)(2)) shall be treated as items of tax preference of the shareholders of such company, or the share- holders or holders of beneficial interests of such trust (and not as item or tax preference of such company or such trust), in the same proportion that the dividends (other than capital gain dividends) paid to each such shareholder, or holder of beneficial interest, bears to the taxable income of such company or such trust determined without regard to the deduction for dividends paid. (g) Tax preferences attributable to foreign sources (1) In general For purposes of section 56, the items of tax preference set forth in section 57(a) (other than in paragraphs (6) and (9) of such sec- tion) which are attributable to sources within any foreign country or possession of the United States shall be taken into account only to the extent that such items reduce the tax imposed by this chapter (other than the tax imposed by section 56) on income derived from sources within the United States. For purposes of the preceding sentence, items of tax preference shall be treated as reducing the tax imposed by this chapter before items which are not items of tax preference. (2) Capital gains and stock options For purposes of section 56, the items of tax preference set forth in paragraphs (6) and (9) of section 57(a) which are attributable to sources within any foreign country or posses- sion of the United States shall not be taken into account if, under the tax laws of such country or possession- (A) in the case of the item set forth in paragraph (6) of section 57(a), preferential treatment is not accorded transfers of shares of stock pursuant to stock options described in such paragraph, and (B) in the case of the item set forth in paragraph (9) of section 57(a), preferential treatment Is not accorded gain from the sale or exchange of capital assets (or prop- erty treated as capital assets). For purposes of this paragraph, preferential treatment is accorded such items which are Page 93