§854 Limitations applicable to dividends received from regulated investment company

2010—Subsec. (b)(1)(A). Pub. L. 111–325, § 301(e)(1)(A), in concluding provisions, substituted “reported by the regulated investment company as eligible for such deduction in written statements furnished to its shareholders” for “designated under this subparagraph by the regulated investment company”. Subsec. (b)(1)(B)(i). Pub. L. 111–325, § 301(e)(1)(B), in concluding provisions, substituted “reported by the regulated investment company as qualified dividend income in written statements furnished to its shareholders” for “designated by the regulated investment company”. Subsec. (b)(1)(C)(i). Pub. L. 111–325, § 301(e)(1)(C), substituted “reported” for “designated”. Subsec. (b)(1)(C)(ii). Pub. L. 111–325, § 301(e)(1)(D), substituted “reported” for “designated” in introductory provisions. Subsec. (b)(2) to (5). Pub. L. 111–325, § 301(e)(2), redesignated pars. (3) to (5) as (2) to (4), respectively, and struck out former par. (2). Prior to amendment, text read as follows: “The amount of any distribution by a regulated investment company which may be taken into account as qualified dividend income for purposes of section 1(h)(11) and as dividends for purposes of the deduction under section 243 shall not exceed the amount so designated by the company in a written notice to its shareholders mailed not later than 60 days after the close of its taxable year.” 2004—Subsec. (b)(1)(B)(i). Pub. L. 108–311, § 402(a)(5)(A)(ii), reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “If the aggregate dividends received by a regulated investment company during any taxable year are less than 95 percent of its gross income, then, in computing the maximum rate under section 1(h)(11), rules similar to the rules of subparagraph (A) shall apply.” Subsec. (b)(1)(B)(iii), (iv). Pub. L. 108–311, § 402(a)(5)(A)(i), struck out cls. (iii) and (iv) which related to dividends from real estate investment trusts and dividends from qualified foreign corporations, respectively. Subsec. (b)(1)(C). Pub. L. 108–311, § 402(a)(5)(B), amended heading and text of subpar. (C) generally. Prior to amendment, text read as follows: “The aggregate amount which may be designated as dividends under subparagraph (A) or (B) shall not exceed the aggregate dividends received by the company for the taxable year.” Subsec. (b)(2). Pub. L. 108–311, § 402(a)(5)(C), substituted “as qualified dividend income for purposes of section 1(h)(11) and as dividends for purposes of” for “as a dividend for purposes of the maximum rate under section 1(h)(11) and”. Subsec. (b)(5). Pub. L. 108–311, § 402(a)(5)(D), amended heading and text of par. (5) generally. Prior to amendment, text read as follows: “For purposes of paragraph (1)(B), an amount shall be treated as a dividend only if the amount is qualified dividend income (within the meaning of section 1(h)(11)(B)).” 2003—Subsec. (a). Pub. L. 108–27, § 302(c)(1), inserted “section 1(h)(11) (relating to maximum rate of tax on dividends) and” after “For purposes of”. Subsec. (b)(1)(B). Pub. L. 108–27, § 302(c)(2), added subpar. (B). Former subpar. (B) redesignated (C). Subsec. (b)(1)(C). Pub. L. 108–27, § 302(c)(2), (3), redesignated subpar. (B) as (C) and substituted “subparagraph (A) or (B)” for “subparagraph (A)”. Subsec. (b)(2). Pub. L. 108–27, § 302(c)(4), inserted “the maximum rate under section 1(h)(11) and” after “for purposes of”. Subsec. (b)(5). Pub. L. 108–27, § 302(c)(5), added par. (5). 1988—Subsec. (b)(3). Pub. L. 100–647 substituted “Aggregate dividends” for “Definitions” in heading and amended text generally, substituting subpars. (A) to (C) for former subpars. (A) and (B). 1987—Subsec. (b)(1)(A). Pub. L. 100–203 inserted “and such dividend shall be treated as received from a corporation which is not a 20-percent owned corporation” before period at end. 1986—Subsec. (a). Pub. L. 99–514, § 612(b)(6)(A), which directed that “section 116 (relating to an exclusion for dividends received by individuals), and” be struck out, was executed by striking out “section 116 (relating to an exclusion for dividends received by individuals) and” before “section 243” as the probable intent of Congress. Subsec. (b)(1)(B), (C). Pub. L. 99–514, § 612(b)(6)(B)(i), (ii), redesignated subpar. (C) as (B), struck out “or (B)” before “shall not exceed”, and struck out former subpar. (B), exclusion under section 116, which read as follows: “If the aggregate dividends received by a regulated investment company during any taxable year are less than 95 percent of its gross income, then, in computing the exclusion under section 116, rules similar to the rules of subparagraph (A) shall apply.” Subsec. (b)(2). Pub. L. 99–514, § 655(a)(4), substituted “60 days” for “45 days”. Pub. L. 99–514, § 612(b)(6)(B)(iii), struck out “the exclusion under section 116 and” before “the deduction under section 243”. Subsec. (b)(3)(B). Pub. L. 99–514, § 612(b)(6)(B)(iv), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “The term ‘aggregate dividends received’ includes only dividends received from domestic corporations other than dividends described in section 116(b) (relating to dividends excluded from gross income). In determining the amount of any dividend for purposes of this subparagraph, the rules provided in section 116(c) (relating to certain distributions) shall apply.” 1984—Subsec. (b). Pub. L. 98–369, § 16(a), repealed

made by Pub. L. 97–34, § 302(c). See 1981 Amendment note below. Subsec. (b)(1). Pub. L. 98–369, § 52(a), increased the required amount of dividends by substituting provisions directing that in any case in which (i) a dividend is received from a regulated investment company (other than a dividend to which subsection (a) applies), and (ii) such investment company meets the requirements of section 852(a) for the taxable year during which it paid such dividend, then, in computing any deduction under section 243, there shall be taken into account only that portion of such dividend thus designated by the regulated investment company, that if the aggregate dividends received by a regulated investment company during any taxable year are less than 95 percent of its gross income, then, in computing the exclusion under section 116, similar rules applied, and that the aggregate amount which may be designated thus dividends shall not exceed the aggregate dividends received by the company for the taxable year for provisions which had directed that in the case of a dividend received from a regulated investment company (other than a dividend to which subsection (a) applied) (A) if such investment company met the requirements of section 852(a) for the taxable year during which it paid such dividend; and (B) the aggregate dividends received by such company during such taxable year were less than 75 percent of its gross income, then, in computing the exclusion under section 116 and the deduction under section 243, there was taken into account only that portion of the dividend which bore the same ratio to the amount of such dividend as the aggregate dividends received by such company during such taxable year to its gross income for such taxable year. Subsec. (b)(3)(A). Pub. L. 98–369, § 52(c), substituted provisions directing that in the case of 1 or more sales or other dispositions of stock and securities, the term “gross income” include only the excess of (i) the net short-term capital gain from such sales or dispositions, over (ii) the net long-term capital loss from such sales or dispositions for provisions which had directed that the term “gross income” not include gain from the sale or other disposition of stock or securities. Subsec. (b)(4). Pub. L. 98–369, § 52(b), added par. (4). 1981—Subsec. (b). Pub. L. 97–34, § 302(c)(4), (d)(1), provided for general amendment of subsec. (b) so as to include provisions relating to taxable interest described in section 128 of this title, applicable to taxable years beginning after Dec. 31, 1984. section 16(a) of Pub. L. 98–369, repealed section 302(c) of Pub. L. 97–34, and provided that this title shall be applied and administered as if section 302(c), and the

made by section 302(c), had not been enacted. 1980—Subsec. (b). Pub. L. 96–223, § 404(b)(6), temporarily substituted “Other dividends and taxable interest” for “Other dividends” in heading, substituted “Deduction under section 243” for “General rule” in heading for par. (1), struck out “the exclusion under section 116 and” after “in computing” in text of par. (1) following subpar. (B), added par. (2), redesignated former pars. (2) and (3) as (3) and (4), respectively, and, in par. (4) as so redesignated, substituted “116(b)(2)” for “116(b)” and “116(c)(2)” for “116(c)” in subpar. (B) and added subpar. (C). 1964—Subsec. (a). Pub. L. 88–272, § 201(d)(8), struck out “section 34(a) (relating to credit for dividends received by individuals),” before “section 116” and the comma before “and”. Subsec. (b). Pub. L. 88–272, §§ 201(d)(9), (10), 229(a)(4), substituted “45 days” for “30 days” in par. (2), and struck out “the credit under section 34(a),” before “the exclusion” in par. (1), and “the credit under section 34,” before “the exclusion” in par. (2).

Effective and Termination Dates of 2010 AmendmentAmendment by Pub. L. 111–325 applicable to taxable years beginning after Dec. 22, 2010, see section 301(h) of Pub. L. 111–325, set out as an

of 2010 Amendment note under section 852 of this title. Pub. L. 111–325, title III, § 301(i), Dec. 22, 2010, 124 Stat. 3547, provided that: “section 303 of the Jobs and Growth Tax Relief Reconciliation Act of 2003 [Pub. L. 108–27, which was repealed by Pub. L. 112–240, title I, § 102(a), Jan. 2, 2013, 126 Stat. 2318, was formerly set out as an Effective and Termination Dates of 2003 Amendment note under section 1 of this title] shall apply to the

made by subparagraphs (B) and (D) of subsection (e)(1) [amending this section] to the same extent and in the same manner as section 303 of such Act applies to the

made by section 302 of such Act [amending this section and section 1, 163, 301, 306, 338, 467, 531, 541, 584, 702, 857, 1255, and 1257 of this title and repealing section 341 of this title].”

of 2004 AmendmentAmendment by Pub. L. 108–311 effective as if included in section 302 of the Jobs and Growth Tax Relief Reconciliation Act of 2003, Pub. L. 108–27, see section 402(b) of Pub. L. 108–311, set out a note under section 1 of this title.

of 2003 AmendmentAmendment by Pub. L. 108–27 applicable, except as otherwise provided, to taxable years beginning after Dec. 31, 2002, see section 302(f) of Pub. L. 108–27, set out as an Effective and Termination Dates of 2003 Amendment note under section 1 of this title.

of 1988 AmendmentAmendment by Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title.

of 1987 AmendmentAmendment by Pub. L. 100–203 applicable to dividends received or accrued after Dec. 31, 1987, in taxable years ending after such date, see section 10221(e)(1) of Pub. L. 100–203, set out as a note under section 243 of this title.

of 1986 AmendmentAmendment by section 612(b)(6) of Pub. L. 99–514 applicable to taxable years beginning after Dec. 31, 1986, see section 612(c) of Pub. L. 99–514, set out as a note under section 301 of this title. Amendment by section 655(a)(4) of Pub. L. 99–514 applicable to taxable years beginning after Oct. 22, 1986, see section 655(b) of Pub. L. 99–514, set out as a note under section 852 of this title.

of 1984 AmendmentAmendment by section 16(a) of Pub. L. 98–369 applicable to taxable years ending after Dec. 31, 1983, see section 18(a) of Pub. L. 98–369, set out as a note under section 48 of this title. Pub. L. 98–369, div. A, title I, § 52(d), July 18, 1984, 98 Stat. 565, provided that: “The

made by this section [amending this section] shall apply to taxable years of regulated investment companies beginning after the date of the enactment of this Act [July 18, 1984].” Effective and Termination Dates of 1980 AmendmentAmendment by Pub. L. 96–223 applicable with respect to taxable years beginning after Dec. 31, 1980, and before Jan. 1, 1982, see section 404(c) of Pub. L. 96–223, set out as a note under section 265 of this title.

of 1964 AmendmentAmendment by section 201(d)(8)–(10) of Pub. L. 88–272 applicable to dividends received after Dec. 31, 1964, in taxable years ending after such date, see section 201(e) of Pub. L. 88–272, set out as a note under section 22 of this title. Amendment by section 229(a)(4) of 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 a note under section 852 of this title. Qualified Dividend Notice Period Pub. L. 108–311, title IV, § 402(a)(5)(F), Oct. 4, 2004, 118 Stat. 1185, provided that: “With respect to any taxable year of a regulated investment company or real estate investment trust ending on or before November 30, 2003, the period for providing notice of the qualified dividend amount to shareholders under [former, as to 854(b)(2)] section 854(b)(2) and 857(c)(2)(C) of the Internal Revenue Code of 1986, as amended by this section, shall not expire before the date on which the statement under section 6042(c) of such Code is required to be furnished with respect to the last calendar year beginning in such taxable year.”