# Pub. L. 111-325: changes to the Internal Revenue Code 2010-12-22, 124 Stat. 3549. Source: . ## Legislative history - Bill: [H.R. 4337](https://www.congress.gov/bill/111th-congress/house-bill/4337) - Bluebook: [JCT general explanation (2011)](https://www.govinfo.gov/app/details/CPRT-112JPRT64669) ## § 267: Losses, expenses, and interest with respect to transactions between related taxpayers - § 267(f)(3)(D): Pub. L. 111–325 added subpar. (D). ## § 302: Distributions in redemption of stock - § 302(a): Pub. L. 111–325, § 306(a)(2), substituted “(4), or (5)” for “or (4)”. - § 302(b)(5), § 302(b)(6): Pub. L. 111–325, § 306(a)(1), added par. (5) and redesignated former par. (5) as (6). ## § 316: Dividend defined - § 316(b)(4): Pub. L. 111–325 added par. (4). ## § 562: Rules applicable in determining dividends eligible for dividends paid deduction - § 562(c): Pub. L. 111–325 substituted “Except in the case of a publicly offered regulated investment company (as defined in section 67(c)(2)(B)), the amount” for “The amount” in first sentence and inserted “(other than a publicly offered regulated investment company (as so defined))” after “regulated investment company” in second sentence. ## § 851: Definition of regulated investment company - § 851(d): Pub. L. 111–325, § 201(a), designated existing provisions as par. (1), inserted heading, and added par. (2). - § 851(i): Pub. L. 111–325, § 201(b), added subsec. (i). ## § 852: Taxation of regulated investment companies and their shareholders - § 852(b)(2)(G): Pub. L. 111–325, § 201(c), added subpar. (G). - § 852(b)(3)(C): Pub. L. 111–325, § 301(a)(1), amended subpar. (C) generally. Prior to amendment, subpar. (C) related to definition of capital gain dividend. - § 852(b)(4)(E): Pub. L. 111–325, § 309(a), (b), substituted “Exception to holding period requirement for certain regularly declared exempt-interest dividends” for “Authority to shorten required holding period” in heading, added cl. (i), inserted cl. (ii) designation and heading before “In the case of”, and inserted “(other than a company described in clause (i))” after “regulated investment company”. - § 852(b)(5)(A): Pub. L. 111–325, § 301(b), amended subpar. (A) generally. Prior to amendment, text read as follows: “An exempt-interest dividend means any dividend or part thereof (other than a capital gain dividend) paid by a regulated investment company and designated by it as an exempt-interest dividend in a written notice mailed to its shareholders not later than 60 days after the close of its taxable year. If the aggregate amount so designated with respect to a taxable year of the company (including exempt-interest dividends paid after the close of the taxable year as described in section 855) is greater than the excess of— - § 852(b)(8): Pub. L. 111–325, § 308(a), amended par. (8) generally. Prior to amendment, text read as follows: “To the extent provided in regulations, the taxable income of a regulated investment company (other than a company to which an election under section 4982(e)(4) applies) shall be computed without regard to any net foreign currency loss attributable to transactions after October 31 of such year, and any such net foreign currency loss shall be treated as arising on the 1st day of the following taxable year.” - § 852(b): Pub. L. 111–325, § 308(b)(1), struck out par. (10). Text read as follows: “To the extent provided in regulations, the taxable income of a regulated investment company (other than a company to which an election under section 4982(e)(4) applies) shall be computed without regard to any net reduction in the value of any stock of a passive foreign investment company with respect to which an election under section 1296(k) is in effect occurring after October 31 of the taxable year, and any such reduction shall be treated as occurring on the first day of the following taxable year.” - § 852(c)(1): Pub. L. 111–325, § 302(a), amended par. (1) generally. Prior to amendment, text read as follows: “The earnings and profits of a regulated investment company for any taxable year (but not its accumulated earnings and profits) shall not be reduced by any amount which is not allowable as a deduction in computing its taxable income for such taxable year. For purposes of this subsection, the term ‘regulated investment company’ includes a domestic corporation which is a regulated investment company determined without regard to the requirements of subsection (a).” - § 852(c)(2): Pub. L. 111–325, § 308(b)(2), in introductory provisions, substituted “For purposes of applying this chapter to distributions made by a regulated investment company with respect to any calendar year, the earnings and profits of such company shall be determined without regard to any net capital loss attributable to the portion of the taxable year after October 31 and without regard to any late-year ordinary loss (as defined in subsection (b)(8)(D)).” for “For purposes of applying this chapter to distributions made by a regulated investment company with respect to any calendar year, the earnings and profits of such company shall be determined without regard to any net capital loss (or net foreign currency loss) attributable to transactions after October 31 of such year, without regard to any net reduction in the value of any stock of a passive foreign investment company with respect to which an election under section 1296(k) is in effect occurring after October 31 of such year, and with such other adjustments as the Secretary may by regulations prescribe.” - § 852(c)(4): Pub. L. 111–325, § 302(b)(1), added par. (4). - § 852(f)(1)(C): Pub. L. 111–325, § 502(a), substituted “acquires, during the period beginning on the date of the disposition referred to in subparagraph (B) and ending on January 31 of the calendar year following the calendar year that includes the date of such disposition,” for “subsequently acquires”. - § 852(g): Pub. L. 111–325, § 303(a), added subsec. (g). ## § 853: Foreign tax credit allowed to shareholders - § 853(c): Pub. L. 111–325, § 301(c)(1)(B), substituted “Statements” for “Notice” in heading. - § 853(c): Pub. L. 111–325, § 301(c)(1)(A), which directed amendment by substituting “so reported by the company in a written statement furnished to such shareholder” for “so designated by the company in a written notice mailed to its shareholders not later than 60 days after the close of the taxable year”, was executed by making the substitution for “so designated by the company in a written notice mailed to its shareholders not later than 60 days after the close of its taxable year” in concluding provisions to reflect the probable intent of Congress. - § 853(d): Pub. L. 111–325, § 301(c)(2), struck out “and notifying shareholders” after “election” in heading and “and the notice to shareholders required by subsection (c)” after “subsection (a)” in text. ## § 853A: Credits from tax credit bonds allowed to shareholders - § 853A(c): Pub. L. 111–325, § 301(d)(1), which directed substitution of “Statements” for “Notice” in heading and “so reported by the regulated investment company in a written statement furnished to such shareholder” for “so designated by the regulated investment company in a written notice mailed to its shareholders not later than 60 days after the close of its taxable year” in text, could not be executed to the text because the words “so reported by the regulated investment company in a written statement furnished to such shareholder” already appeared after the subsequent general amendment of subsec. (c) by Pub. L. 113–295 which was effective as if included in the provisions of the American Recovery and Reinvestment Tax Act of 2009 (Pub. L. 111–5, div. B, title I) to which it relates. However, the substitution was executed to the heading to reflect the probable intent of Congress. See 2014 Amendment note above and Effective Date of 2014 Amendment note below. - § 853A(d): Pub. L. 111–325, § 301(d)(2), struck out “and notifying shareholders” after “election” in heading and “and the notice to shareholders required by subsection (c)” after “subsection (a)” in text. ## § 854: Limitations applicable to dividends received from regulated investment company - § 854(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”. - § 854(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”. - § 854(b)(1)(C)(i): Pub. L. 111–325, § 301(e)(1)(C), substituted “reported” for “designated”. - § 854(b)(1)(C)(ii): Pub. L. 111–325, § 301(e)(1)(D), substituted “reported” for “designated” in introductory provisions. - § 854(b)(2), § 854(b)(3), § 854(b)(4), § 854(b): 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.” ## § 855: Dividends paid by regulated investment company after close of taxable year - § 855(a): Pub. L. 111–325, § 304(c), in concluding provisions, inserted at end “For purposes of paragraph (2), a dividend attributable to any short-term capital gain with respect to which a notice is required under the Investment Company Act of 1940 shall be treated as the same type of dividend as a capital gain dividend.” - § 855(a): Pub. L. 111–325, § 301(g)(2), substituted “and (c)” for “, (c) and (d)” in concluding provisions. - § 855(a)(1): Pub. L. 111–325, § 304(a), amended par. (1) generally. Prior to amendment, par. (1) read as follows: “declares a dividend prior to the time prescribed by law for the filing of its return for a taxable year (including the period of any extension of time granted for filing such return), and”. - § 855(a)(2): Pub. L. 111–325, § 304(b), substituted “the first dividend payment of the same type of dividend” for “the first regular dividend payment”. - § 855(c), § 855: Pub. L. 111–325, § 301(g)(1), redesignated subsec. (d) as (c) and struck out former subsec. (c). Text of former subsec. (c) read as follows: “In the case of amounts to which subsection (a) is applicable, any notice to shareholders required under this part with respect to such amounts shall be made not later than 60 days after the close of the taxable year in which the distribution is made.” ## § 860: Deduction for deficiency dividends - § 860(f)(2)(B): Pub. L. 111–325, § 301(a)(2), inserted “or reported (as the case may be)” after “designated”. - § 860: Pub. L. 111–325, § 501(b), struck out subsec. (j). Text read as follows: “For assessable penalty with respect to liability for tax of a regulated investment company which is allowed a deduction under subsection (a), see section 6697.” ## § 871: Tax on nonresident alien individuals - § 871(k)(1)(A): Pub. L. 111–325, § 302(b)(2), inserted “which meets the requirements of section 852(a) for the taxable year with respect to which the dividend is paid” before period at end. - § 871(k)(1)(C): Pub. L. 111–325, § 301(f)(1), substituted introductory provisions, cls. (i) to (iv), and cl. (v) heading and “The term ‘interest related dividend’ shall not include any dividend with respect to” for “For purposes of this paragraph, the term ‘interest-related dividend’ means any dividend (or part thereof) which is designated by the regulated investment company as an interest-related dividend in a written notice mailed to its shareholders not later than 60 days after the close of its taxable year. If the aggregate amount so designated with respect to a taxable year of the company (including amounts so designated with respect to dividends paid after the close of the taxable year described in section 855) is greater than the qualified net interest income of the company for such taxable year, the portion of each distribution which shall be an interest-related dividend shall be only that portion of the amounts so designated which such qualified net interest income bears to the aggregate amount so designated. Such term shall not include any dividend with respect to”. - § 871(k)(2)(A): Pub. L. 111–325, § 302(b)(2), inserted “which meets the requirements of section 852(a) for the taxable year with respect to which the dividend is paid” before period at end. - § 871(k)(2)(C): Pub. L. 111–325, § 301(f)(2), substituted introductory provisions, cls. (i) to (iv), and cl. (v) heading and “The term ‘short-term capital gain dividend’ shall not include any dividend with respect to” for “For purposes of this paragraph, the term ‘short-term capital gain dividend’ means any dividend (or part thereof) which is designated by the regulated investment company as a short-term capital gain dividend in a written notice mailed to its shareholders not later than 60 days after the close of its taxable year. If the aggregate amount so designated with respect to a taxable year of the company (including amounts so designated with respect to dividends paid after the close of the taxable year described in section 855) is greater than the qualified short-term gain of the company for such taxable year, the portion of each distribution which shall be a short-term capital gain dividend shall be only that portion of the amounts so designated which such qualified short-term gain bears to the aggregate amount so designated. Such term shall not include any dividend with respect to”. - § 871(k)(2)(D): Pub. L. 111–325, § 308(b)(3), substituted “For purposes of this subparagraph, the net short-term capital gain of the regulated investment company shall be computed by treating any short-term capital gain dividend includible in gross income with respect to stock of another regulated investment company as a short-term capital gain.” for “For purposes of this subparagraph— ## § 1212: Capital loss carrybacks and carryovers - § 1212(a)(1)(C): Pub. L. 111–325, § 101(b)(1), amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: “a capital loss carryover— - § 1212(a)(3), § 1212(a)(4): Pub. L. 111–325, § 101(a), added par. (3) and redesignated former par. (3) as (4). ## § 1222: Other terms relating to capital gains and losses - § 1222(10): Pub. L. 111–325 substituted “section 1212(a)(1)” for “section 1212”. ## § 4982: Excise tax on undistributed income of regulated investment companies - § 4982(b)(1)(B): Pub. L. 111–325, § 404(a), substituted “98.2 percent” for “98 percent”. - § 4982(c)(4): Pub. L. 111–325, § 403(a), added par. (4). - § 4982(e)(5), § 4982(e)(6), § 4982(e)(7): Pub. L. 111–325, § 402(a), added pars. (5) to (7) and struck out former pars. (5) and (6) which related to treatment of foreign currency gains and losses after October 31 of calendar year and treatment of gain recognized under section 1296, respectively. - § 4982(f): Pub. L. 111–325, § 401(a)(1), struck out “either” before dash at end of introductory provisions. - § 4982(f)(3), § 4982(f)(4): Pub. L. 111–325, § 401(a)(2)–(4), added pars. (3) and (4).