[Code of Federal Regulations]
[Title 26, Volume 7]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.563-2]

[Page 302]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.563-2  Personal holding company tax.

    In the case of a personal holding company subject to the provisions 
of section 541, dividends paid after the close of the taxable year and 
before the 15th day of the third month thereafter shall be included in 
the computation of the dividends paid deduction for the taxable year 
only if the taxpayer so elects in its return for such taxable year. The 
election shall be made by including such dividends in computing its 
dividends paid deduction. The amount of such dividends which may be 
included in computing the dividends paid deduction for the taxable year 
shall not exceed either:
    (a) The undistributed personal holding company income of the 
corporation for the taxable year, computed without regard to this 
section, or
    (b) In the case of a taxable year beginning after December 31, 1969, 
20 percent (10 percent, in the case of a taxable year beginning before 
Jan. 1, 1970) of the sum of the dividends paid during the taxable year 
(not including consent dividends), computed without regard to this 
section.

In computing the amount of the dividends paid deduction allowable for 
any taxable year, the amount allowed by reason of section 563(b) for any 
preceding taxable year is considered a dividend paid in such preceding 
taxable year and not in the year of actual distribution. Thus, a double 
deduction is not allowable.

[T.D. 7079, 35 FR 18587, Dec. 8, 1970]