Page:United States Statutes at Large Volume 92 Part 3.djvu/264

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PUBLIC LAW 95-000—MMMM. DD, 1978

92 STAT. 2896 Ante, p. 2894.

PUBLIC LAW 95-600—NOV. 6, 1978 included in the gross income of the shareholders of such GSOC under section 1393(a). "(b) SPECIAL RULE FOR AUDIT ADJUSTMENTS.— "(1) TAXABLE INCOME.—Taxable income of

26 USC 6601. 26 USC 6611.

an electing GSOC shall, in the year of final determination, be increased or decreased, as the case might be, by any adjustment to taxable income for a prior taxable year. "(2) INVESTMENT CREDIT.—The net investment credit of an electing GSOC shall, in the year of final determination, be increased or decreased, as the case might be, by any adjustment to the net investment credit for a prior taxable year. "(3) METHOD OF MAKING ADJUSTMENTS.—An electing GSOC shall include in gross income for the year of an adjustment the amount described in paragraph (1) and shall take into account the adjustment described in paragraph (2), and shall be liable for payment of interest in the amount that would have been payable by the GSOC under section 6601 (relating to interest on underpayment, nonpayment or extensions of time for payment, of tax) or receivable by the GSOC under section 6611 (relating to interest on overpayments) if such GSOC had been a corporation other than an electing GSOC."

(b) TECHNICAL AMENDMENTS.— (1) NET OPERATING LOSS DEDUCTION.—Paragraph

26 USC 172.

26 USC 3402.

(1) of section 172(b) (relating to net operating loss carrybacks and carryovers) is amended by adding at the end thereof the following new subparagraph: "(H) In the case of an electing GSOC which has a net operating loss for any taxable year such loss shall not be a net operating loss carryback to any taxable year preceding the year of such loss, but shall be a net operating loss carryover to each of the 10 taxable years following the year of such loss." (2) INCOME TAX COLLECTED AT SOURCE.—Section 3402 (relating to income collected at source) is amended by adding at the end thereof the following new subsection: "(r) EXTENSION OF WITHHOLDING TO GSOC DISTRIBUTIONS.— "(1) GENERAL RULE.—An electing GSOC making any distribution to its shareholders shall deduct and withhold from such payment a tax in an amount equal to 25 percent of such payment. "(2) COORDINATION WITH OTHER SECTIONS.—For purposes of

26 USC 3403, 3404. 26 USC 7205. 26 USC 1016.

Ante, p. 2895. Ante, p. 2892. Ante, p. 2893.

sections 3403 and 3404 and for purposes of so much of subtitle F (except section 7205) as relates to this chapter, distributions of an electing GSOC to any shareholder which are subject to withholding shall be treated as if they were wages paid by an employer to an employee." (3) ADJUSTMENTS TO BASIS.—Section 1016(a) (relating to adjustments of basis) is amended by redesignating paragraph (23) as (22) and by inserting after paragraph (20) the following new paragraph: "(21) to the extent provided in section 1395 in the case of stock of shareholders of a general stock ownership corporation (as defined in section 1391) which makes the election provided by section 1392; and". (4) RETURN OF GENERAL STOCK OWNERSHIP CORPORATION.—

26 USC 6031.

Subpart A of part III of subchapter A of chapter 61 (relating to information returns) is amended by adding at the end thereof the following new section: