PUBLIC LAW 94-455—OCT. 4, 1976
90 STAT. 1645
poratioji satisfies the. conditions of subparagraphs (A) and (B) of subsection (a)(1) and any such subsequent election shall reniaiji in efl'ect until revoked by such domestic corporation under pa]-a<^rapli (2). " (2) KKVOCATIOX.—An election under subsection (a) — " (A) may be revoked for any taxable year beginning before the expiration of the 9th taxable year following the taxable year for which such election first applies only with the consent of the Secretary; and " (B) may be revoked for any taxable year beginning after the expiration of such 9th taxable year without the consent of the Secretar}'. " (f) DLSC O FomiEH D I S C CoitPoRATiox INELIGIBLE FOR CREDIT.— K
Xo credit shall be allowed under this section to a corporation for a taxable year foi" which it is a D I S C or former D I S C (as defined in section 9 9 2 (a)) or in which it owns at any time stock in a D I S C or foinierDISC. "(g)
ExcErriON TO A C C I M I LATKD EARXINGS T A X. —
" (1) For purposes of section 535, the term 'accumulated taxable income' shall not include taxable income entitled to the credit under subsection (a). " (2) For purposes of section 587, the term 'reasonable needs of the business' includes assets which jjroduce income eligible for the credit under subsection (a).-"
"Accumulated taxable income. "Reasonable needs of the business."
(c) AMENDMENTS OF SECTIOX 981.—
(1) Subsection (a) of section 981 (relating to general rule in the case of income from souives within possessions of the United States) is amended to read as follows: "(a)
(TEXERAL K I L E. — I n
the case of individual
citizens of
26 USC 931.
the
United States, gross income means only gross income from sources within the United States if the conditions of both paragraph (1) and paragrap]i (2) are satisfied: " (1) 8-yEAR PERIOD.—If 80 percent or more of the gross income of such citizen (computed without the benefit of this section) foi- the 8-year period immediately preceding the close of the taxable year (or for such part of such period inmiediately preceding th(! close of such taxable year as may be applicable) was derived from sources within a possession of the United States; and " (2) TRADE OR BUSIXESS.—If 50 p e i r e n t or more of his gross
income (computed without the benefit of this section) for such period or such part thereof was derived from the active conduct of a trade or business within a possession of the United States either on his own account or as an employee or agent of another.. (2) Subsection (c) of section 981 (defining the term "possession") is amended to read as follows: " (c) DEFINITION.—For }nirposes of this section, the term 'possession of the United States' does not include the Commonwealth of Puerto Rico, the Virgin Islands of the United States, or Guam.". (8) Subsections (d). (e), and (f) of section 981 are each amended by striking out "))ersons" each place it appears and inserting in lieu thereof "a citizen of the United States". (d)
AMENDMENTS OF SECTIOX' 901.—
(1) Section 901(d) (relating to certain corporations treated as 26 USC 901. foreign corporations) is amended to read as follows: " (d) TREATMEXT OF DIVIDENDS F R O M A D I S C OR FORMER D I S C. —
Foi- purposes of this subpart, dividends from a D I S C or former D I S C
89-194 n — 7n_nt 9
10
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