65 STAT.]
PUBLIC LAW 183—OCT. 20, 1951
487
expenses shall be taken into account in computing the adjusted basis of the mine or deposit, except that such amount, and the adjustments to basis provided in section 113(b)(1)(J), shall ^^'•" be disregarded in determining the adjusted basis of the property for the purpose of computing a deduction for depletion under section 114." iu^sc%ii4 (b) ADJUSTES) BASIS FOR DETERMINING G A I N OR Loss U P O N SALE Post',p'.m. OR EXCHANGE.—Section 113(b)(1) (relating to adjusted basis of 26u.^s.a § 113(b) property) is hereby amended by adding at the end thereof the (^)following subparagraph: " (J) for amounts allowed as deductions as deferred ,' expenses under section 23 (cc)(2) (relating to certain Arue,p.486. expenditures in the development of mines) and resulting in a reduction of the taxpayer's taxes under this chapter, but not less than the amounts allowable under such section for the taxable year and prior years." (c) TECHNICAL AMENDMENT.—Section 24(a)(2) (relating to ^ u.*s.^c. 5 24 (a) items not deductible) is hereby amended by adding after the word (2)^'estate" the following: ", except expenditures for the development of mines or deposits deductible under section 23 (cc)". (d) EFFECTIVE DATE.—The amendments made by this section shall be applicable to taxable years ending after December 31, 1950. SEC. 310. GROSS INCOME OF DEPENDENT OF TAXPAYER. (a)
INCREASE I N AMOUNT OF GROSS INCOME PERMITTED.—Section
25 (b)(1)(D) (relating to exemptions for dependents of taxpayer) 26 u^s ^a § as (b) is hereby amended by striking out "$500" and inserting in lieu thereof (1)(O). "$600". (b) EFFECTIVE DATE.—The amendment made by subsection (a) shall be applicable only with respect to taxable years beginning after December 31, 1950. SEC 311. CREDIT FOR DIVIDENDS RECEIVED. (a) DIVIDENDS FROM FOREIGN CORPORATION ENGAGED I N TRADE OR BUSINESS I N THE UNITED STATES.—Section 26(b) (relating to divi-
dends received credit) is hereby amended by inserting after paragraph (2) the following new paragraph:
26 u*sc% 26(b) Arue, p. m.
" (3) DIVIDENDS RECEIVED FROM CERTAIN FOREIGN CORPORATIONS.-^
I n the case of dividends received from a foreign corporation (other than a foreign personal holding company) which is subject to taxation under this chapter, if, for an uninterrupted period of not less than 36 months ending with the close of such foreign corporation's taxable year in which such dividends are paid (or, if the corporation has not been in existence for 36 months at the close of such taxable year, for the period the foreign corporation has been in existence as of the close of such taxable year) such foreign corporation has been engaged in trade or business within the United States and has derived 50 per centum or more of its gross income from sources within the United States— " (A) an amount equal to 85 per centum of the dividends received out of its earnings or profits specified in clause (2) of the first sentence of section 115(a), but such amount shall not exceed an amount which bears the same ratio to 85 per centum of such dividends received out of such earnings or profits as the gross income of such foreign corporation for the taxable year from sources within the United States bears to its gross income from all sources for such taxable year, and " (B) an amount equal to 85 per centum of the dividends received out of that part of its earnings or profits specified in
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