such of the shareholders as are such of the shareholders as are Taxable Years Beginning before 1939 Sec. 28. (a) Definitions.-As used in this section Sec. 28. (a) (1) Consent stock. Sec. 28. (a) (1) Consent stock.— -The term "consent stock" means The term "consent stock" means the class or classes of stock en- the class or classes of stock entitled, after the payment of pre- titled, after the payment of preferred dividends (as defined in ferred dividends (as defined in paragraph (2)), to a share in the paragraph (2)), to a share in the distribution (other than in com- distribution (other than in complete or partial liquidation) with-plete or partial liquidation) within the taxable year of all the re- in the taxable year of all the remaining earnings or profits, which maining earnings or profits, which share constitutes the same propor- share constitutes the same proportion of such distribution regardless tion of such distribution regardless of the amount of such distribution. of the amount of such distribution. Sec. 28. (a) (2) Preferred dividends. The term "preferred dividends" means Sec. 28. (a) (2) Preferred divi- (other than in complete or partial which must be made on any class Sec. 28. (a) (3) Consent divi- Sec. 28. (a) (3) Consent dividends day.—The term "consent div- dends day. The term "consent dividends day" means the last day of idends day" means the last day of the taxable year of the corporation, the taxable year of the corporation, unless during the last month of unless during the last month of such such year there have occurred one year there have occurred one or or more days on which was pay-more days on which was payable a able a partial distribution (as de- partial distribution (as defined in fined in paragraph (5)), in which paragraph (5)), in which case it case it means the last of such days. means the last of such days. Sec. 28. (a) (1) Consent stock. See p. 82, Eighth Edition. Sec. 28. (a) (2) Preferred dividends. See p. 82, Eighth Edition. Sec. 28. (a) (3) Consent dividends day. See p. 82, Eighth Edition. Sec. 28. (a) (4) Consent distri See p. 82, Eighth Edition. Sec. 28. (a) (4) Consent distri- Sec. 28. (a) (4) Consent distribution. The term "consent distribution.-The term "consent distribution. bution" means the distribution bution" means the distribution which would have been made if on which would have been made if on the consent dividends day (as de- the consent dividends day (as defined in paragraph (3)) there had fined in paragraph (3)) there had actually been distributed in cash actually been distributed in cash and received by each shareholder and received by each shareholder making a consent filed by the cor- making a consent filed by the corporation under subsection (d), the poration under subsection (d), the specific amount stated in such con- specific amount stated in such con Sec. 28. (a) (5) Partial distri- Sec. 28. (a) (5) Partial distriSec. 28. (a) (5) Partial distribution. The term "partial distribution. The term "partial distribution. bution" means such part of an ac-bution" means such part of an ac See p. 82, Eighth Edition. Taxable Years tual distribution, payable during the last month of the taxable year of the corporation, as constitutes a distribution on the whole or any part of the consent stock (as defined in paragraph (1)), which part of the distribution, if considered by itself and not in connection with a consent distribution (as defined in paragraph (4)), would be a preferential distribution, as defined in paragraph (6). Taxable Years tual distribution, payable during Sec. 28. (a) (6) Preferential Sec. 28. (a) (6) Preferential distribution.-The term "prefer- distribution. The term "preferential distribution" means a dis-ential distribution" means a distribution which is not pro rata, or tribution which is not pro rata, or which is with preference to any which is with preference to any share of stock as compared with share of stock as compared with other shares of the same class, or other shares of the same class, or to any class of consent stock as to any class of consent stock as compared with any other class of compared with any other class of consent stock. consent stock. Sec. 28. (b) Corporations not entitled to credit.-A corporation shall not be entitled to a consent dividends credit with respect to any taxable year— Sec. 28. (b) (1) Unless, at the close of such year, all preferred dividends (for the taxable year and, if cumulative, for prior taxable years) have been paid; or Sec. 28. (b) (2) If, at any time during such year, the corporation has taken any steps in, or in pursuance of a plan of, complete or partial liquidation of all or any part of the consent stock. Sec. 28. (b) Corporations not entitled to credit.-A corporation shall not be entitled to a consent dividends credit with respect to any taxable year Sec. 28. (b) (1) Unless, at the close of such year, all preferred dividends (for the taxable year and, if cumulative, for prior taxable years) have been paid; or Sec. 28. (b) (2) If, at any time during such year, the corporation has taken any steps in, or in pursuance of a plan of, complete or partial liquidation of all or any part of the consent stock. Sec. 28. (c) Allowance of credit. Sec. 28. (c) Allowance of credit. -There shall be allowed to the There shall be allowed to the corporation, as a part of its basic corporation, as a part of its basic surtax credit for the taxable year, surtax credit for the taxable year, a consent dividends credit equal to a consent dividends credit equal to such portion of the total sum agreed such portion of the total sum agreed to be included in the gross income to be included in the gross income of shareholders by their consents of shareholders by their consents filed under subsection (d) as it filed under subsection (d) as it would have been entitled to include would have been entitled to include in computing its basic surtax credit if actual distribution of an amount equal to such total sum had been made in cash and each shareholder making such a consent had received, on the consent dividends day, the amount specified in the consent. Taxable Years tual distribution, payable during the last month of the taxable year of the corporation, as constitutes a distribution on the whole or any part of the consent stock (as defined in paragraph (1)), which part of the distribution, if considered by itself and not in connection with a consent distribution (as defined in paragraph (4)), would be a preferential distribution, as defined in paragraph (6). Sec. 28. (a) (6) Preferential distribution. The term "preferential distribution" means a distribution which is not pro rata, or which is with preference to any share of stock as compared with other shares of the same class, or to any class of consent stock as compared with any other class of consent stock. Sec. 28. (b) Corporations not entitled to credit.-A corporation shall not be entitled to a consent dividends credit with respect to any taxable year Sec. 28. (b) (1) Unless, at the close of such year, all preferred dividends (for the taxable year and, if cumulative, for prior taxable years) have been paid; or Sec. 28. (b) (2) If, at any time during such year, the corporation has taken any steps in, or in pursuance of a plan of, complete or partial liquidation of all or any part of the consent stock. Sec. 28. (c) Allowance of credit. There shall be allowed to the corporation, as a part of its basic surtax credit for the taxable year, a consent dividends credit equal to such portion of the total sum agreed to be included in the gross income of shareholders by their consents filed under subsection (d) as it would have been entitled to include in computing its basic surtax credit if actual distribution of an amount equal to such total sum had been made in cash and each shareholder making such a consent had received, on the consent dividends day, the amount specified in the consent. in computing its basic surtax credit if actual distribution of an amount equal to such total sum had been made in cash and each shareholder making such a consent had received, on the consent dividends day, the amount specified in the consent. Sec. 28. (d) Shareholders' con- Sec. 28. (d) Shareholders' con- Sec. 28. (d) Shareholders' consents. The corporation shall not sents.-The corporation shall not sents.-The corporation shall not be entitled to a consent dividends be entitled to a consent dividends be entitled to a consent dividends credit with respect to any taxable credit with respect to any taxable credit with respect to any taxable year year year tual distribution, payable during tual distribution, payable during the Sec. 28. (a) (6) Preferential Sec. 28. (a) (6) Preferential Sec. 28. (b) Corporations not entitled to credit.-A corporation shall not be entitled to a consent dividends credit with respect to any taxable year— Sec. 28. (b) (1) Unless, at the close of such year, all preferred dividends (for the taxable year and, if cumulative, for prior taxable years) have been paid; or Sec. 28. (b) (2) If, at any time during such year, the corporation has taken any steps in, or in pursuance of a plan of, complete or partial liquidation of all or any part of the consent stock. other shares of the same class, or Sec. 28. (b) Corporations not Sec. 28. (b) (1) Unless, at the close of such year, all preferred dividends (for the taxable year and, if cumulative, for prior taxable years) have been paid; or Sec. 28. (b) (2) If, at any time. during such year, the corporation has taken any steps in, or in pursuance of a plan of, complete or partial liquidation of all or any part of the consent stock. Sec. 28. (c) Allowance of credit. Sec. 28. (c) Allowance of credit. -There shall be allowed to the -There shall be allowed to the corporation, as a part of its basic corporation, as a part of its basic surtax credit for the taxable year, surtax credit for the taxable year, a a consent dividends credit equal to consent dividends credit equal to such portion of the total sum agreed such portion of the total sum agreed to be included in the gross income to be included in the gross income of shareholders by their consents of shareholders by their consents filed under subsection (d) as it filed under subsection (d) as it would have been entitled to include would have been entitled to include in computing its basic surtax credit if actual distribution of an amount equal to such total sum had been made in cash and each shareholder making such a consent had received, on the consent dividends day, the amount specified in the consent. in computing its basic surtax credit Sec. 28. (d) Shareholders' con- Sec. 28. (d) Shareholders' consents. The corporation shall not sents. The corporation shall not be entitled to a consent dividends be entitled to a consent dividends credit with respect to any taxable credit with respect to any taxable year | year Taxable Years Beginning before 1939 Sec. 28. (a) (6) Preferential distribution. See p. 82, Eighth Edition. Sec. 28. (b) Corporations not entitled to credit. See p. 82, Eighth Edition. Sec. 28. (c) Allowance of credit. Sec. 28. (d) Shareholders' consents. See p. 83, Eighth Edition. Taxable Years Sec. 28. (d) (1) Unless it files (in accordance with regulations prescribed by the Commissioner with the approval of the Secretary) with its return for such year, or within one year after the date of enactment of the Revenue Act of 1942, in the case of a corporation which is a personal holding company for the taxable year with respect to which it claims the benefits of this section, signed consents made under oath by persons who were shareholders, on the last day of the taxable year of the corporation, of any class of consent stock; and Sec. 28 (d) (1), I. R. C., supra, amended by Sec. 186 (e) (1), R. A. of 1942, to read as above. Sec. 186 (f) of said Act makes amendment effective as of the date of the enactment of the I. R. C. on Feb. 10, 1939. For Sec. 28 (d), I. R. C., before amendment, see 1942 column. Sec. 28. (d) (1) Unless it files Sec. 28. (d) (1) Unless it files with its return for such year (in with its return for such year (in accordance with regulations pre- accordance with regulations prescribed by the Commissioner with scribed by the Commissioner with the approval of the Secretary) the approval of the Secretary) with its return for such year, or with its return for such year, or within one year after the date of within one year after the date of enactment of the Revenue Act enactment of the Revenue Art of 1942, in the case of a corpora- of 1942, in the case of a corporation which is a personal holding tion which is a personal holding company for the taxable year with company for the taxable year with respect to which it claims the bene- respect to which it claims the benefits of this section, signed consents fits of this section, signed consents made under oath by persons who made under oath by persons who were shareholders, on the last day were shareholders, on the last day of the taxable year of the corpora- of the taxable year of the corporation, of any class of consent stock; tion, of any class of consent stock: and and a taxable Sec. 28. (d) (2) Unless in each Sec. 28. (d) (2) Unless in each Sec. 28. (d) (2) Unless in each such consent the shareholder agrees such consent the shareholder agrees such consent the shareholder agrees that he will include as a taxable that he will include as a taxable that he will include as dividend, in his return for the tax-dividend, in his return for the tax-dividend, in his return for the taxable year in which or with which able year in which or with which able year in which or with which the taxable year of the corporation the taxable year of the corporation the taxable year of the corporation ends, a specific amount; and ends, a specific amount; and ends, a specific amount; and Sec. 28. (d) (3) Unless the consents filed are made by such of the Sec. 28. (d) (3) Unless the consents filed are made by such of the Sec. 28. (d) (3) Unless the consents filed are made by such of the shareholders and the amount spec- shareholders and the amount spec- shareholders and the amount spec ified in each consent is such, that the consent distribution would not have been a preferential distribution (A) If there was no partial distribution during the last month of the taxable year of the corporation, or (B) If there was such a partial distribution, then when considered in connection with such partial distribution; and ified in each consent is such, that (A) If there was no partial dis- or (B) If there was such a partial distribution, then when considered in connection with such partial distribution; and ified in each consent is such, that the consent distribution would not have been a preferential distribution (A) If there was no partial distribution during the last month of the taxable year of the corporation, or (B) If there was such a partial distribution, then when considered in connection with such partial distribution; and Sec. 28. (d) (4) Unless in each consent made by a shareholder who is taxable with respect to a dividend only if received from sources within the United States, such within the United States, such within the United States, such Sec. 28. (d) (4) Unless in each Sec. 28. (d) (4) Unless in each consent made by a shareholder who consent made by a shareholder who is taxable with respect to a divi- is taxable with respect to a dividend only if received from sources dend only if received from sources 7 Sec. 186 (e) and (f), R. A. of 1942, read as follows: Sec. 186. (e) Consent dividends.— (1) Section 28 (d) (1) of the Internal Revenue Code and section 28 (d) (1) of the Revenue Act of 1938 are amended to read as follows: "(1) Unless it files (in accordance with regulations prescribed by the Commissioner with the approval of the Secretary) with its return for such year, or within one year after the date of enactment of the Revenue Act of 1942, in the case of a corporation which is a personal holding company for the taxable year with respect to which it claims the benefits of this section, signed consents made under oath by persons who were shareholders, Taxable Years Sec. 28. (d) (1) Unless it files Taxable Years turn for such year, or within one Sec. 28. (d) (1) Unless it files with its return for such year (in with its return for such year (in acaccordance with regulations pre-cordance with regulations prescribed scribed by the Commissioner with by the Commissioner with the apthe approval of the Secretary) proval of the Secretary) with its rewith its return for such year, or within one year after the date of enactment of the Revenue Act of 1942, in the case of a corporation which is a personal holding personal holding company for the company for the taxable year with respect to which it claims the benefits of this section, signed consents made under oath by persons who were shareholders, on the last day of the taxable year of the corporation, of any class of consent stock; and taxable year with respect to which Sec. 28 (d) (1), I. R. C., supra, amended by Sec. 186 (e) (1), R. A. of 1942, by omitting language in stricken through type and adding language in italics. Sec. 186 (f) of said Act makes amendment effective as of the date of the enactment of the I. R. C. on Feb. 10, 1939. Sec. 28. (d) (2) Unless in each Sec. 28. (d) (2) Unless in each such consent the shareholder agrees such consent the shareholder agrees that he will include as a taxable that he will include as a taxable dividend, in his return for the tax-dividend, in his return for the taxable year in which or with which able year in which or with which the taxable year of the corporation the taxable year of the corporation ends, a specific amount; and ends, a specific amount; and Sec. 28. (d) (3) Unless the con- Sec. 28. (d) (3) Unless the consents filed are made by such of the sents filed are made by such of the shareholders and the amount spec- shareholders and the amount specified in each consent is such, that ified in each consent is such, that the consent distribution would not the consent distribution would not have been a preferential distribu- have been a preferential distributiontion (A) If there was no partial dis- (A) If there was no partial distribution during the last month of tribution during the last month of the taxable year of the corpora- the taxable year of the corporation, or tion, or (B) If there was such a partial distribution, then when considered in connection with such partial distribution; and (B) If there was such a partial distribution, then when considered in connection with such partial distribution; and Sec. 28. (d) (4) Unless in each Sec. 28. (d) (4) Unless in each consent made by a shareholder who consent made by a shareholder who is taxable with respect to a divi- is taxable with respect to a dividend only if received from sources dend only if received from sources within the United States, such within the United States, such Taxable Years Beginning before 1939 Retroactivity See fn. 7 for retroactive amendment of Sec. 28 (d) (1), R. A. of 1938, by Sec. 186 (e), R. A. of 1942. on the last day of the taxable year, of the corporation, its shareholders. Such section 28 shall be applied as of any class of consent stock; and". (2) For the purposes of this section, section 28 of the Revenue Act of 1938, as amended by this subsection, shall be applicable with respect to a corporation for any taxable year beginning after December 31, 1936, and before January 1, 1938, for which it was, under the applicable law, a personal holding company, and to though the phrase "basic surtax credit" in subsection (c) thereof were "dividends paid credit". Sec. 186. (f) Effective date of amendments.-The amendments made by subsections (a) to (e), inclusive, shall be effective as of the date of enactment of the laws amended thereby. |