[Code of Federal Regulations]
[Title 26, Volume 11]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.1247-2]

[Page 372]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.1247-2  Computation and distribution of taxable income.

    (a) In general. Taxable income of a foreign investment company means 
taxable income as defined in section 63(a), computed without regard to 
subchapter N, chapter 1 of the Code, and in accordance with the 
following rules:
    (1) There shall be excluded the excess, if any, of the company's net 
long-term capital gain over the net short-term capital loss. See Sec. 
1.1247-3 for the manner of computing such excess.
    (2) The deduction provided in section 172 (relating to net operating 
losses) shall not be allowed.
    (3) Except for the deduction provided in section 248 (relating to 
organizational expenditures), the special deductions provided for 
corporations in part VIII (sections 241 and following), subchapter B, 
chapter 1 of the Code shall not be allowed.
    (4) In computing the amount of the deduction allowed under section 
164 there shall be included taxes paid or accrued during the taxable 
year which are imposed by the United States or by the country under the 
laws of which the company is created or organized. See, however, Sec. 
1.1247-4.
    (b) Election to distribute taxable income after close of taxable 
year. A company may elect under section 1247(a)(2)(B), in respect of 
taxable income for a taxable year, to treat a distribution made not 
later than 2 months and 15 days after the close of such taxable year as 
a distribution made during such taxable year of such taxable income. The 
company shall make the election by attaching to the information return 
required by paragraph (c)(1) of Sec. 1.1247-5 for such taxable year a 
statement setting forth the amount of each distribution (or portion 
thereof) to which the election applies and the date of each such 
distribution. The election shall be irrevocable after the expiration of 
the time for filing such information return. The distribution (or 
portion thereof) to which the election applies shall be considered as 
paid out of the earnings and profits of the taxable year for which such 
election is made, and not out of the earnings and profits of the taxable 
year in which the distribution is actually made. A distribution to which 
this paragraph applies shall be includible in the gross income of a 
shareholder of the foreign investment company for his taxable year in 
which received or accrued.

[T.D. 6798, 30 FR 1175, Feb. 4, 1965]

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