PUBLIC LAW 91-172-DEC. 30, 1969
Ante, p. 600. 78 Stat. 2 5. 68A Stat. 182.
73 Stat. 115.
"(2) such corporation is a component member of a controllei group of corporations with respect to such taxable year (deter mined by applying section 1563(b) as if the last day of such taxable year were substituted for December 31), then subsections (a) and (b) shall be applied as if the last day of s^pj^ taxable year were the nearest December 31 to such day." (2)(A) The first sentence of section 1562(b)(1) is amended by striking out "$25,000"' and inserting in lieu thereof "the amount of such corporation's surtax exemption for such taxable year". (B) Section 11(d) is amended by striking out "section 1561" and inserting in lieu thereof "section 1561 or 1564". (C) Section 535(c)(5) is amended by striking out "section 1551" and inserting in lieu thereof "section 1551, and for limitation on such credit in the case of certain controlled corporations see sections 1561 and 1564". (D) Section 804 is amended by adding after subsection (c) the following new subsection: " (d) CROSS REFERENCE.— ^ "For reduction of the $25,000 amount provided in subsection (a)(4) in the case of certain controlled corporations, see sections 1561 and 1564."
(E) The table of sections for part II of subchapter B of chapter 6 is amended by adding at the end thereof the following: "Sec. 1564. Transitional rules in the case of certain corporations."
llfl^^'}^2^ 26 USC
(c) BROTIIER-SISTER CONTROLLED GROUPS.—Section 1563(a)(2) is T
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amended to read as follows: "(2) BROTIIER-SISTER CONTROLLED GROUP.—Two or more corpo,,^. rations if 5 or fewer persons who are individuals, estates, or trusts own (within the meaning of subsection (d)(2)) stock uossessinj;— " (A) at least 80 percent of the total combined voting power of all classes of stock entitled to vote or at least 80 percent of the total value of shares of all classes of the stock of each corporation, and " (B) more than 50 percent of the total combined voting power of all classes of stock entitled to vote or more than 50 percent of the total value of shares of all classes of stock of ,;,. each corporation, taking into account the stock ownership of each such person only to the extent such stock ownership is identical with respect to each such corporation." (d) EXCLUDED STOCK: RULES.—
68A Stat, 163.
(1) Section 1563(c)(2)(A) is amended by striking out "or" at the end of clause ( i i); by striking out "stock." at the end of clause (iii) and inserting in lieu thereof "stock, or"; and by adding after •• clause (iii) the following new clause: '.: " ( i v) stock in the subsidiary corporation owned (within . ],~.' the meaning of subsection (d)(2)) by an organization (other ^hau the parent corporation) to which section 501 (relating to certain educational and charitable organizations which are _, ^ ^,, exempt from tax) applies and which is controlled directly or .»,i.,.i indirectly by the parent corporation or subsidiary corporai»- tion, by an individual, estate, or trust that is a principal stock~ ' holder (within the meaning of clause (ii)) of the parent corporation, by an officer of the parent corporation, or by any combination thereof."