78 STAT. ]
PUBLIC LAW 88-272-FEB. 26, 1964
equals or exceeds 25 percent of the aiiiount by which the ordinary gross income exceeds the sum of the royakies paid or accrued and the amounts allowable as deductions under section 167 (relating to depreciation) with respect to copy- 76^|fa?io34.^' right royalties. .. ^^ "^^ ^^^• For purposes of this subsection, the term 'copyright royaUies' means compensation, however designated, for the use of, or the right to use, copyrights in works protected by copyriglit issued under title 17 of the United States Code (other than by reason of section 2 or 6 thereof) and to which copyright protection is also extended by the laws of any country other than the United States of America by virtue of any international treaty, convention, or agreement, or interests in any such copyrighted works, and includes payments from any person for performing rights in any such copyrighted work and payments (other than produced film rents as defined in paragraph (5)(B)) received for the use of, or right to use, films. For purposes of this paragraph, the term 'shareholder' shall include any person Avho owns 26 USC 544. stock within the meaning of section 5-14. " (5) PRODUCED FILM RENTS.—
" (A) Produced film rents; except that such rents shall not be included if such rents constitute 50 percent or more of the ordinary gross income. " (B) For purposes of this section, the term 'produced film rents- means payments received with respect to an interest in a film for the use of, or right to use, such film, but only to the extent that such interest was acquired before substantial completion of production of sudi film. " (6) U S E OF CORPORATION PROPERT'^* RV SHAREHOLDER.—Amounts
received as compensation (however designated and from whomsoever received) for the use of, or right to use, property of the corporation in any case where, at any time during the taxable year, 25 percent or more in value of the outstanding stock of the corporation is owned, directly or indirectly, by or for an individual entitled to the use of the property; whether such right is obtained directly from the corporation or by means of a sublease or other arrangement. This paragraph shall apply only to a corporation which has personal holding company income for the taxable year (computed without regard to this paragraph and paragraph (2), and computed by incTudina: as personal holding company income copyright royalties and the adjusted income from mineral, oil, and gas royalties) in excess of 10 percent of its ordinary gross income. " (7) PERSONAL SERVICE CONTRACTS.—
" (A) Amounts received under a contract under which the corporation is to furnish personal services; if some person other than the corporation has the right to designate (by name or by description) the individual who is to perform the services, or if the individual who is to perform the services is designated (by name or by description) in the contract; and " (B) amomits received from the sale or other disposition of such a contract. This paragraph shall apply with respect to amounts received for services under a particular contract only if at some time during the taxable year 25 percent or more in value of the outstanding stock of the corporation is owned, directly or indirectly, by or for the individual who has performed, is to perform, or may be
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